The Biden Administration’s Push to Take One of California’s Worst Ideas Nationwide

T he Biden administration has effectively declared war on gig work, with its Department of Labor proposing a new federal regulation inspired by California’s controversial AB 5 law that would limit people’s ability to be classified as independent contractors and work as they choose.

As Bloomberg Law reports, “The US Labor Department’s new proposed worker classification test has parallels to California’s ‘ABC test’ [a provision of AB 5], which presumes workers are employees instead of independent contractors under the law.”

This proposal, if successful, would cruelly upset millions of lives. At least 57 million Americans are currently involved in gig work, a number expected to grow to more than 86 million within the next five years.

AB 5, which essentially bans independent contract and freelance work, was one of the most hated bills to emerge from the Sacramento sausage-making process in recent memory.

Using the aforementioned “ABC test” developed by the California Supreme Court, the law establishes who can legally work on a contractual basis and who must be a hired employee. The classification bar set by the test is so high that few freelancers can clear it. Consequently, almost every independent contractor has to become a hired employee, form their own business, or lose their job.

This is no accident: The aim of AB 5 was to force employers to put their gig workers on the payroll, along with all the costs — unaffordable for many businesses and organizations — that are associated with doing so.

In his public statements about the newly proposed regulation, Secretary of Labor Marty Walsh has resorted to the same duplicity that California lawmakers used first in passing, and then in defending, the indefensible AB5. In a recent press release, for example, Walsh said the rule is needed to safeguard “our nation’s most vulnerable workers,” ensuring that they are not deprived of “their federal labor protections.”

Under the rule, the Labor Department would be free to “determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act,” according to the press release. The release further “encourages interested parties to submit comments on this proposal” by November 28, but it would be naive to trust the process in this case. The comments are a mere formality required by law; they won’t change the outcome.

There was no grassroots movement pushing Sacramento to make AB 5 law. Neither has there been a national groundswell of workers demanding that the federal government kill off independent contracting. Both are political gifts to unions, whose bosses want to organize as many gig workers as possible and then extract membership fees from them. Given the tens of millions of Americans working in the gig economy, the windfall for unions would be substantial.

The rule won’t do anything to help the workers themselves, though.

The overlooked truth is that gig workers are protective of their independence. As of May 2017, the Bureau of Labor Statistics said that independent contractors “overwhelmingly” favored their “alternative employment arrangement (79 percent) to a traditional one (9 percent).” And why wouldn’t they? Their independent-contractor status leaves them free to choose their own hours, decide which companies they partner with, try new fields of work, and avoid rotten bosses. They have the option to work only when it’s necessary or when they wish to. They can earn part-time money when financial emergencies hit, put away dollars for down payments on large purchases, and pay cash for Christmas presents rather than running up credit-card debt.

Despite the benefits of gig work and the stated desires of independent contractors to remain free, the Biden administration wants to end such jobs, and, worse, hopes to do so despite the fact that, as Newsweek reports, “the number of young adults ages 18 to 24 who are neither in school nor working surged by about 1 million from 2019 to 2021.” Is the Labor Department expecting these young Americans who are well-suited for gig work to become unionized employees in 2023? Or does it want the “surge” to grow?

California lawmakers and voters carved out exemptions from AB 5 for a few jobs (largely held by the politically connected), but the law is still in effect and harming millions of Californians. These victims know, and could tell Washington, just how difficult AB 5 has made their lives. But one suspects that Washington doesn’t want to hear their pleas. Of course, that’s no reason why these hard-working Americans shouldn’t make their voices heard before the comments period ends on November 28. They — and the millions of gig workers across the rest of the country — deserve better, and they won’t get it by staying silent.