Lawmakers and unions wage war on self-employed workers: Part 1
State lawmakers are working overtime this legislative session to fill organized labor’s wish list. From bills that would make it harder for public workers to learn about and exercise their Janus right to quit paying their government union, to bills that would bring more of those public workers into the government union fold, legislators are asking “how high” when the state’s union executives tell them to jump.
But it isn’t just Christmas in February for government unions. Private sector unions are also getting in on the action.
You may have seen some of the media coverage over the legislative proposal to end the independent contractor business model in our state. The over 1,000 angry hair stylists who swarmed the Capitol and hammered Senator Karen Keiser during a hearing on her bill that would have ended the traditional business model of stylists working for themselves and forced them to become employees was nightly news gold and the headline story in most media outlets.
After a bruising two hours of brutally frank and impassioned testimony against the bill, Senator Keiser announced she was shelving her bill.
Old-fashioned grassroots action won that battle. But an all out war is being waged agains self-employed entrepreneurs like hair stylists via other bills that are getting less grassroots and media attention, but are much more insidious.
Instead of targeting hair stylists, these bills seek to squash the entrepreneurial spirit of small business owners across myriad industries. Labor unions stand to gain in a big way.
First, a little background. Workers can be classified as either employees or independent contractors. Independent contractors are not employees of a company, but instead are separate business owners (usually sole proprietors) who contract out their services to other businesses. In other words, they are freelancers who have services to offer and want the freedom and flexibility to be their own boss. They pay their own taxes and knowingly cannot rely on benefits such as unemployment insurance (after all, business owners can’t very well fire themselves).
In addition to hair stylists, doctors, dentists, veterinarians, lawyers, and builders, are just some examples of independent contractors who sell their services to the public.
The federal National Labor Relations Act (NLRA) does not apply to independent contractors, which means that unlike employees they do not have the right to unionize and collectively bargain; a fact that has long vexed labor unions. Even more aggravating for unions is last week’s NLRB decision scuttling Obama era regulations that made it more difficult for workers to be classified as independent contractors (which means fewer potential workers for unions to organize).
Facing a persistent decline in union membership over the past two decades, compounded by the U.S. Supreme Court’s recent Janus ruling and the increasing number of states adopting right-to-work laws that prohibit forced unionism, labor executives are calling in chits with state lawmakers to broaden their net in a bid to increase their membership.
The bills significantly change the current definition of who is considered an employee versus an independent contractor, and businesses would be required to “establish by a preponderance of the evidence that the individual is an independent contractor or is otherwise not an employee” and failure to do so would result in hefty penalties. The language of the bills would make it nearly impossible for businesses to defend themselves, all but ensuring they err on the side of classifying workers as employees instead of independent contractors.
It would create a whole new membership and dues universe for unions—workers classified as employees instead of independent contractors are fair game for unionization.
But this is just the tip of the iceberg. Read Part 2 of this blog series to learn just how far some lawmakers are willing to go to appease their powerful union benefactors at the expense of small, independent business owners.