President Joe Biden is creating a task force to help promote and strengthen union membership through an executive order today.
According to the White House, the task force – which will be chaired by Vice President Kamala Harris, with Labor Secretary Marty Walsh serving as vice chair – will focus on helping to bolster union membership and worker organizing and bargaining.
“Since 1935, when the National Labor Relations Act was enacted, the policy of the federal government has been to encourage worker organizing and collective bargaining, not to merely allow or tolerate them,” the White House release said. “In the 86 years since the Act was passed, the federal government has never fully implemented this policy.”
The main focuses of the task force include setting up the federal government as a “model employer,” helping to bolster worker organizing – especially by increasing power for marginalized workers, and those in industries where organizing is difficult – as well as generally upping the number of workers in unions.
Union membership has fallen
A report from the Economic Policy Institute (EPI), a left-leaning think tank, found that the number of workers who are represented by a union declined by 444,000 from 2019 to 2020.
However, the rate of unionization – the share of workers represented by one – actually increased in 2020, to 12.1% from 11.6%. The report attributes that to the power that unions give their workers, potentially resulting in those unionized workers having more of a say in how their workplaces functioned during the pandemic and its economic impact. And industries that are less unionized – the report cites leisure and hospitality – also saw the most job losses.
On the whole, according to EPI, the unionization rate is highest for Black workers, coming in at 13.9%. Throughout the pandemic, both that rate and the number of Black workers represented by a union increased.
Data from the Bureau of Labor Statistics also found that “Nonunion workers had median weekly earnings that were 84 percent of earnings for workers who were union members ($958 versus $1,144).”
However, in a historical context, unionization rates are still very low. EPI said 2020’s rate is still below half of what it was 40 years ago. Amazon workers had a recent high-profile union loss, as workers in a Bessemer, Alabama warehouse voted against forming a union. That unit would’ve been the first union for the company.
“Amazon didn’t win – our employees made the choice to vote against joining a union,” the company said in a statement after the vote, over which the Retail, Wholesale and Department Store Union (RWDSU) has filed official objections.
But with Biden’s task force, union membership could see a boost. The president has also backed a labor-rights bill called the PRO Act.
“As America works to recover from the devastating challenges of deadly pandemic, an economic crisis, and reckoning on race that reveals deep disparities, we need to summon a new wave of worker power to create an economy that works for everyone,” Biden said in a March statement on the bill.
Back in 2019, I predicted that California Assembly Bill 5 (AB5), which upset the independent contractor world by reclassifying freelancers in hundreds of occupations as employees unless they could prove they’re not, would be seen by other lawmakers as a road map, rather than a cautionary tale. And here we are: a new bill working its way through Congress, the Protecting the Right to Organize Act of 2021 – or PRO Act – should give independent contractors across the country reason to worry, though not necessarily because of the intent of the legislation.
The ABC test
What made AB5 so problematic was its reliance on the ABC employment test to classify workers. ABC says a freelancer should be an employee, unless:
“A) The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
B) The worker performs work that is outside the usual course of the hiring entity’s business; and
C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”
The worker must meet all three. Part B is where many independent contractors went through the buzzsaw: If you’re in the same business as a client, you must be an employee, and, presumably the company would hire you, even if you’ve only been putting in a few hours a week for them. Yet, instead, most employers are just not working with California freelancers anymore.
ABC is also the basis for reclassification in the PRO Act, which passed the House of Representatives earlier this month with bipartisan support. However, there’s one big difference: While AB5 reclassified employment status for workers in California, the PRO Act reclassifies freelancers nationally, but only for the purpose of collective bargaining rights. That’s all – or so it states. Supporters say it “levels the playing field” for unions, to give more people the right to vote in union elections.
I spoke with Professor Michael LeRoy, an expert in labor law and labor relations at the University of Illinois Urbana-Champaign, to find out whether freelancers should worry about the PRO Act. He said there’s been some hyperbole and misunderstanding about it.
“Does [the PRO Act] force you to be in a union? No. If 10 million [freelancers] are classified as employees, a certain amount will want to form one or join one, but they could also vote no,” he told me.
I’d be okay with more people being able to collectively bargain if they want. Freelancers I spoke with aren’t apoplectic about theoretical pressure to join a union, either. What does concern us greatly is the ABC test being used to reclassify independent contractors for any reason. Almost everyone I spoke with feared the ABC test would be misapplied by companies who read the reclassification part of the law, but miss the part about unions. Freelancers also worry that the ABC test will set a precedent for future legislation. It already has: Several states used AB5 as a model when proposing new “gig worker protection laws.”
Fred Topel, a Los Angeles-based entertainment journalist and co-leader of California Freelance Writers United (CAFWU), implored national lawmakers to not use the ABC test. “If you take out the ABC test, I think a majority of [CAFWU] members would support it. We’ve seen no evidence that AB5 worked as lawmakers intended, but plenty of evidence of unintended negative consequences from the ABC test,” he said.
Robert Sette, a freelance translator in Denver, predicted that any big change to labor laws using the ABC test would make hiring companies think twice about using independent contractors. “Many won’t see [the PRO Act] as only for labor organizing. They’ll see this as a risk management issue. To avoid possibly running afoul of the law, they’ll cut loose freelancers.”
That did happen in California. The Facebook group Freelancers Against AB5 has been compiling personal stories of independent contractors in California who lost work and income directly as a result of that law, well before the COVID-19 crisis. Based on dozens of “no Californians need apply” notices citing AB5 as the reason, it appears that many companies were so bewildered by the law and scared of fines for possibly violating it, they simply gave up on California independent contractors.
The road to career hell was paved with good intentions
After AB5 passed, I joined CAFWU and other advocates in California to petition state representatives to amend the law. We succeeded in getting exemptions for some professions.
Through the process, we learned that most lawmakers had no clue about the scope of the independent contractor world, and assumed most people deriving an income were either employers, employees, or exploited would-be employees. The bill’s biggest proponents said, in so many words: Don’t worry if you lose work because all your clients will hire you full time, with benefits! We explained that’s not how it works, emphasizing that most independent contractors are thriving professionals.
I recognize that some independent contractors do want full-time work, and that many other workers are truly misclassified and exploited. There should be protections from misclassification, except – there already are laws covering that. Any worker can sue for misclassification right now – albeit with difficulty.
We don’t need new laws that help some, but also legislate hundreds of thousands of successful careers out of existence. LeRoy agreed the ABC test is a blunt tool that “oversimplifies” the labor force and would need “significant refinements” and exemptions if kept in place. A potential solution could be a multi-factor balancing framework to determine who’s an employee, one like the IRS uses.
In order to prevent the ABC test from wreaking havoc on more independent contractors’ lives, constituents must start conversations with their representatives, starting with the Senate subcommittee members that will be discussing it. They could point to surveys showing that 30% of the US workforce is either self-employed or hired by the self-employed and estimates that freelance income is nearly 5% of GDP.
Stripping the ABC test from the PRO Act could prevent lawmakers from proposing more damaging bills, like the one written last year by Democratic Senators Patty Murray of Washington and Sherrod Brown of Ohio. Their bill gives some benefits to temp and gig workers, but, like AB5, it uses the ABC test to sweep all professions into its net.
This shouldn’t be a partisan issue, but sadly it is. Many Republicans insist any labor protections will hurt business and therefore can never be considered. Based on comments from AB5’s proponents, many Democrats assume what’s good for unions surely benefits everyone. Labor classifications must be more nuanced than that because today’s labor market is complicated.
Pro-labor lawmakers need to understand that freelancers are not necessarily suffering gig workers, or getting by until they land a “real job.” They should either toughen enforcement of existing laws or make sure new laws explicitly help workers who need protections, but not hinder independent contractors’ ability to earn a living. Labor law shouldn’t be a zero sum game.
Professionally, I’ve never been happier since becoming a freelancer. Sure, there are the occasional stresses of chasing down payments and the ongoing uncertainty of not knowing exactly how much I’ll earn, but as someone who thrives when I’m learning and being challenged, the pros outweigh the cons.
As a freelancer, I earn about three times more per hour than when I had a full-time six-figure job.
I’m not alone. A new survey from the freelancing platform Upwork found that most freelancers (75%) earn the same as or more than what they took home from their former full-time jobs.
Freelancing has been life-changing for my family, but now all of that is potentially on the line for me and millions of other freelancers because of a new bill the House of Representatives just passed called the Protecting the Right to Organize Act of 2021, or PRO Act for short.
But there’s a fear that the PRO Act could potentially sideline the self-employed careers of individuals like me who do not want to be classified as employees and would prefer to retain our independence.
“An individual performing any service shall be considered an employee (except as provided in the previous sentence) and not an independent contractor, unless-
“(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact;
“(B) the service is performed outside the usual course of the business of the employer; and
“(C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”.
Self-employed contractors may “fail” to qualify as independent for any one of these reasons. For the publications I write for, publishing articles will likely be considered part of the “usual course of business” for the company. The same goes for the social media strategy, copywriting, editing, and content marketing support I’ve provided to marketing agencies.
If the PRO Act passes in the Senate without any changes to its language and the ABC test becomes the standard used to classify employees, the fallout for my career and family could be considerable.
I know because I’ve already once had to make major life changes due to the ABC test.
Already three of the companies I’ve worked for in a marketing capacity have worked with me through third-party companies that set up contracts with me directly to absorb the risk of working with self-employed individuals like me. Contracting freelancers through third parties is something major companies may be able to do, but that’s not likely for smaller companies.
If enough of my clients can no longer work with me as a freelancer as a result of this new law, I’ll most likely have to get a full-time job, take a pay cut, work longer hours than my current 25 hours a week, lose my flexible schedule and autonomy, and miss out on being a primary caregiver to my child.
And, unless I can find something that’s remote, I’ll likely have to move again.
This time, I’d have to go to a major city where there are more openings for writers and marketers like me. That means a higher cost of living, and, unless one or both of us can find something truly flexible, we’ll either have to start paying for childcare (which costs about $9,000 a year in Los Angeles, for instance) or one of us will have to take a break from being part of the workforce, something more parents and, moms especially, have already had to do during the pandemic.
As I write this article at night as my child sleeps, I’ve just spent the morning at the beach with my family.I choose when I work and when I’m off the clock. Over the past two years, I’ve had the chance to work with over 30 different brands and publications, and during that time no single company I’ve worked with has made up more than about one-fourth of my income, let alone 100% of it.
I’m certainly not a misclassified employee. I’m happily self employed, and that’s how I hope things can stay.
I’m in favor of advancing workers’ rights, and hope the PRO Act can be updated to ensure freelancers who want to remain autonomous can do so.