Protecting Independent Contractors During COVID-19
WASHINGTON, D.C., April 10, 2020
While Congress has taken important action to provide relief to millions of American workers and businesses, independent contractors and the sharing economy still face unique challenges.
Businesses currently have no way to provide certain forms of pay and benefits to independent contractors without potentially triggering an employer-employee relationship under federal law. Under current law, if businesses want to provide relief or resources to independent contractors in the form of paid leave and other benefits, they could face additional costs and legal liability for doing so, and independent contractors could be deprived the flexibility and entrepreneurial opportunity they enjoy today.
Education and Labor Committee Republicans encourage Congress to adopt protections for companies so they can provide health and safety-related benefits to independent contractors without causing an employer-employee relationship.
Businesses should be allowed to assist independent contractors without risking the independent status that the vast majority of these workers prefer. Doing so would protect businesses from additional legal and regulatory burdens at a time they can least afford it, while preserving workers’ flexibility and earning opportunities when they need it most.
This clarification would help protect the health and safety of workers and the public while allowing an important and growing component of the economy to continue operating during the COVID-19 crisis.
WHAT IS INDEPENDENT CONTRACTING
Independent contracting allows businesses of all sizes to focus their limited budgets, staff, time, and resources on their core business functions by hiring workers who are not employees of the company to do certain tasks. In turn, independent contract workers are given significant opportunities to become entrepreneurs and have flexibility to work multiple jobs around a schedule that meets their needs.
Independent contracting, most notably through innovations like the sharing economy, has provided an important source of income and opportunity to millions of Americans while delivering convenient services—like catching a ride or ordering food—to tens of millions of consumers. This business model is now more important than ever during the COVID-19 crisis.
Congressional Democrats claim the best way to assist workers is to reclassify independent contractors as employees. Democrats wrongly argue that there is a widespread problem of businesses misclassifying workers willfully and intentionally to avoid paying additional wages and benefits.
Democrats’ ultimate goal is the elimination of independent-contractor status so they can subject more workers to unionization. In fact, earlier this year 219 Democrats voted for radical legislation that imposes an inappropriate and confusing legal standard for determining “employee” status, which will deprive millions of Americans the opportunity to work as independent contractors.
The Democrats’ biased agenda flies directly in the face of the desires of independent contract workers themselves—the vast majority of whom prefer independent contractor status to employee status and prefer to represent themselves rather than be forced to join and pay hundreds of dollars per year to a labor union.
As we continue to combat the coronavirus, we may see substantial growth in independent contract work as businesses struggle to remain solvent while workers seek the flexibility to earn an income on their own terms. Congress should enact a statutory safe harbor to ensure that providing health and safety-related benefits will not be used as evidence of an employer-employee relationship.
Committee Republicans believe that job creators should be able to take common sense steps to protect independent contract workers without facing new costs and legal liability or undermining workers’ entrepreneurial opportunity.