Senior Vice President, Employment Policy Division, U.S. Chamber of Commerce
On April 19, the House Education and Labor’s subcommittee on Workforce Protections held a hearing titled: “Examining Biden’s War on Independent Contractors.” The hearing focused on the harmful economic impact of California’s AB-5 law and the U.S. Department of Labor’s (DOL) pending rule defining independent contractors (IC) under the Fair Labor Standards Act (FLSA).
Witnesses at the hearing testified about how AB-5 had cost California workers jobs and income, bred endless confusion, and led to litigation. They also noted that DOL’s pending regulation would impose a vague and open-ended IC test that in some ways mirrors AB-5.
As this blog has noted in the past, AB-5 imposed a strict version of the so-called “ABC” test. Under AB-5, a worker has to demonstrate that they meet three specific factors or lose their independent contractor status. The bill was targeted at the “gig” economy, but as its supporters soon found it was a rather blunt instrument. As witnesses at the hearing highlighted, entire categories of independent workers found their livelihoods taken away, forcing the legislature to pass more than 100 exemptions to the law. Those exemptions themselves are now the subject of litigation in California related to whether they constitute a violation of the Constitution’s equal protection clause. AB-5 also resulted in the successful passage of Prop 22, a ballot initiative that exempted gig...
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