A Democratic plan to wipe out independent contractors
S E E D E D C O N T E N T
As Washington turns its attention to a massive $3.5 trillion reconciliation bill, every household across America should be on high alert because some Democrats want to take away the right to work.
Senate Finance Chairman Ron Wyden (D-Ore.) is championing a bill to radically overhaul America's unemployment system. The legislation would model our federal system on a California law that is so unpopular and so poorly written that emergency action was required to avoid severely disrupting the state's economy.
The Wyden Plan would federalize California's failed economic experiment. Under his Plan, a restrictive federal worker classification test (the ABC Test) is used to determine unemployment eligibility. And if states refuse to use the federal test, unemployment taxes for businesses in those states become punitive, rising to 5.4 percent per employee. The goal of this plan is ultimately to force independent contractors in all 50 states to become employees for federal unemployment tax purposes.
Wyden views his bill as a "top priority," yet thus far it has avoided public scrutiny. By failing to hold any hearings on the issue, the bill's supporters have not had to answer basic questions, such as why they are reducing opportunities for working families, raising their taxes and interfering with an individual's right to choose how they earn a living.
Today, millions of American workers operate as independent contractors instead of employees. This allows them to operate their own small businesses with the freedom and flexibility to serve their clients as they choose. The Wyden Plan directly threatens this choice.
If the plan becomes law, countless businesses would be forced to pay new taxes to continue to use independent contractors. These higher taxes would needlessly disrupt economic activity and violate Democrats' pledge not to raise taxes on small businesses.
California Democrats certainly know better. Their state adopted the restrictive ABC Test in 2019 to convert millions of independent contractors into employees. Unfortunately, the results of the California law have been a disaster. Instead of businesses treating independent contractors as employees after the law was enacted, tens of thousands of contractors lost work.
To repair the economic damage done by this ill-conceived policy, California's lawmakers issued more than 50 emergency exemptions to the law. You would think any law requiring that many exemptions would be viewed as a policy failure that should not be repeated. But you would be wrong. In Washington, it appears imposing that kind of fiasco is a good idea.
The Wyden Plan doubles down on California's flawed policy. But if the plan yields the same results across the country as it did in California, it will cause nationwide economic damage.
To avoid this, the Wyden Plan must embrace one simple fact: Independent workers in all corners of our economy are satisfied with their choice to be independent. They do not want higher taxes, less choice or more economic uncertainty.
The Bureau of Labor Statistics has found that 79 percent of independent contractors prefer their current arrangement to being an employee. A similar survey of insurance and financial professionals by NAIFA found that 95 percent of these workers who operate as independent contractors want to remain so.
Given these overwhelming preferences, Washington would be wise not to ignore the will of these workers. Washington's policies should improve life for America's working families and the small businesses, who are the backbone of our local communities, not take their jobs away or tax them out of existence.
Christopher A. Iacovella is the chief executive officer of the American Securities Association.
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Good. Business to independent contractors to lessen their employment liabilities and costs. They should be elimiated.
My statement stands.
No good reason to eliminate independent contractors or to punish businesses for dealing with them.
I believe that people should have their choice on whether to work for themselves or a company, and whether to join a union or not.
exactly. corporate america exploiting loopholes at the expense of everyone but themselves. newsflash republicans, it's quickly going to become very expensive to be a robber baron scumbag. I've been an independent contractor for most of my adult life. the business owners this will cost the most are those that pay substandard prices and/or utilize undocumented workers.
face it republicans, the 1% gravy train is pulling into the station, and the price of your ticket out has gone way up. get used to it. there's another train coming, it's the pent up demand in the economy train. please feel free to try and stop it by standing on the tracks. survival of the fittest applies in business too.
Why do so many Democrats want to hurt workers and take away their choices?
More Republican hysteria.
Calling news hysteria is a juvenile argument.
If the system is so great, why did California have to issue so many exemptions?
You haven't provided any news.
Claiming that Democrats plan to wipe out independent contractors is an infantile argument.
But it's true.
bullshit.
Nice way to avoid answering.