E&W Blog

“The way people do work in America is changing,” said Workforce Protections Subcommittee Chairman Ryan Mackenzie (R-PA) when he opened today’s hearing that discussed legislative solutions to protect independent contractors’ status and allow them to pursue certain benefits if they so choose.

Subcommittee Chairman Ryan Mackenzie (R-PA), in his opening statement, highlighted recently enacted state laws and regulations that reclassify independent contractors as employees, in addition to the disastrous 2024 Biden-Harris Department of Labor rule.

“Not only is this policy bad for independent contractors, but it is also bad for the entire American economy. In fact, studies estimate a total national cost of $17 billion if just 15 percent of independent contractors are reclassified as employees and $57 billion if 50 percent are reclassified,” he said.

Witnesses echoed the importance of protecting workers' ability to choose how, when, and where they work.

“The independent contractor [IC] model allows them to match their work to their individual circumstances and needs. Choosing the days, hours, routes, and other aspects of their work is part of the advantage that comes from being an IC,” said Mr. Nathan Mehrens, Vice President of Workforce Policy at American Trucking Associations. “Credible surveys and data overwhelmingly demonstrate that ICs choose this model because it’s what they prefer.”

In a somber moment, Ms. Kim Kavin, Freelance Writer and Editor, explained to Committee Chairman Tim Walberg (R-MI) how being a freelancer gave her the flexibility she needed after being physically attacked several years ago. “One of the things that helped me recover from PTSD was being able to be my own boss because when you’re your own boss you can control your entire work environment. No one is going to come up to you in an office and tap you on the shoulder to ask you a question and startle you. Little things like that would be very difficult for me,” she said

Rep. Mark Messmer (R-IN) disputed the myth that independent contractors are replacing traditional jobs. “The data shows that there is a steady coexistence with both [traditional and freelance jobs]...Most independent workers have full W-2 jobs and they are using independent work as an opportunity to make extra income as a side gig,” said Dr. Liya Palagashvili, Senior Research Fellow with the Mercatus Center at George Mason University. 

In an exchange with Rep. Mary Miller (R-IL), Mr. Mehrens explained how regulations changing from administration to administration have negatively impacted his industry. “This is what we refer to as regulatory whiplash…Businesses extend all kinds of capital to pay for lawyers, accountants, and alike to try and figure out where the rules are now, where they are going to be in the future, and to do contingency planning. Some individuals have that capability and some don’t, it’s just much harder on the individual so it puts them at a disadvantage and makes it much more difficult for them to be an IC,” he said.

Rep. Glenn Grothman (R-WI) asked about states who utilize a portable benefits pilot program. “One of the takeaways we are seeing from the programs is that workers are using them mainly for time off and emergency savings. This makes sense given the data that most app-based workers are full time W-2 employees, so they don’t use it to buy health insurance and so forth,” said Dr. Palagashvili. “In a survey it asks participants if they would prefer to be an independent contractor with these benefits or if they would prefer to be an employee [and the full benefits that come with it], 91 percent of the program participants said that they would want to be [an] independent [contractor].”
  

Rep. Kevin Kiley (R-CA) highlighted how his bill, the Modern Worker Empowerment Act, will help stop attacks on freelancers. “When you look at federal legislation like the PRO Act, what’s going on with regulatory rulemaking in New Jersey right now, there are no exemptions. So all these awful effects we’ve seen in California are with over 100 professions getting partial or full exemptions…This is going to be horrific if this keeps going on. We really, really need Congress to pass the Modern Worker Empowerment Act,” Ms. Kavin concluded.

Bottom Line: Republicans are committed to empowering, not attacking, workers who choose when, where, and how they work.