In Joe Biden's America, Say Goodbye to Freelancing or Gig Work

AP Photo/Patrick Semansky

(The author is a conservative who has worked in all aspects of California politics for decades, who wishes to remain anonymous for professional reasons.)

Those who enjoy the convenience and flexibility of being an independent contractor should think very carefully about how they will be voting today. If elected, Joe Biden and the Democrats in Congress intend to make the ABC worker classification test (made famous by the California Supreme Court in Dynamex Operations West v. Superior Court and California’s AB 5) the default standard under federal law. Adopting the ABC Test at the federal level would have drastic consequences for a large number of industries and professions, and would likely result in hundreds of thousands, if not millions, of job losses across the nation for those employed as independent contractors. This is what happened once California passed AB 5 because that was what the legislation was specifically designed to do. Biden and the Democrats believe that their long-term future depends upon eliminating independent contractors and increasing workforce unionization, which is why they are wholly committed to making the ABC Test the law of the land. Biden will have several options available to him for accomplishing this goal if he becomes president, and there would be very little in the way to stop him.

The PRO Act

The first way that Biden and the Democrats could impose the ABC Test would be to enact H.R. 2474, the Protecting the Right to Organize Act of 2019 (PRO Act). This legislation would make the ABC test permanent under federal labor law and immune to almost any legal challenge. The PRO Act has already passed the House, and it has been strongly endorsed by Biden and almost all of the Democrats in Congress. Should the Democrats recapture the Senate and eliminate or curtail the use of the legislative filibuster as they have discussed, this legislation will be on Biden’s desk in very short order.
A closer look at this legislation shows exactly why the democrats are so keen on adopting it, along with the ABC Test. According to the House committee report, the underlying purpose of the PRO Act is:

“[T]o strengthen the National Labor Relations Act (NLRA) to safeguard workers full freedom of association and to remedy longstanding weaknesses that fail to protect workers’ rights to organize and collectively bargain. These weaknesses have contributed to a decline of union membership, which in turn has contributed to wage stagnation and greater income inequality.” (H.R. Rep. No. 116-347 at 8-9 (2019).)

The committee report further states:

“Congress must update the NLRA to protect workers rights to organize, advocate, and collectively bargain, particularly in the face of a fissuring workplace where employment relationships are ‘broken into pieces [and] often shifted to subcontractors, third party companies, or….to individuals who are treated as independent contractors.” (Id., at 9.)

In order to combat the trend towards a “fissuring workplace,” the PRO Act adopts the same basic version of the ABC Test set forth in the Dynamex decision and AB 5 for determining whether a worker is classified as an employee or independent contractor. In particular, the PRO Act would modify federal law so that:

“[A]n individual performing any service shall be considered an employee (except as provided in the previous sentence) and not an independent contractor, unless – (A): the individual is free from the control and direction of in connection with the performance of the service, both under the contract for the performance of service and in fact; (B) the service is performed outside the usual course of business for the employer; and (c) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.” (H.R. 2474, sec 2, “employee”, pgs. 2-3.)

AB 5, which was passed by the California Legislature in order to not simply codify but to expand the application of the Dynamex holding, adopted this same basic test as well, though it created a large number of exemptions for certain industries and professions, making them subject to the prior standard rejected by Dynamex. In 2020, the California Legislature passed AB 2257, which added fine artists, freelance writers, photographers, copy editors, various musicians, and others, to the list of professions exempt from the ABC test.

Democrats believe that by adopting the ABC test nationwide, they can reduce the use of independent contractors in key sectors, thus forcing employers to reclassify these workers as employees. Once that occurs, these workers will then be forced to join a union and pay dues. (The PRO Act also eliminates right-to-work laws, so all employees will be required to join and pay union dues if it is enacted. See H.R. 2474, sec 2 (k) “Fair Share Agreements Permitted”, pgs 28-29.)

Assemblywoman Lorena Gonzalez, who authored California’s AB 5, identified the direct connection between the ABC test and increased unionization as well, tweeting that, “It means we get AB5 – then we organize workers into a union.” The Democrats fully hope that by eliminating a large number of independent contractors, the PRO Act will cause a steep increase in union membership, which will subsequently increase their own political power. Unions overwhelmingly contribute their money, manpower, and political influence to the Democrats and their affiliated causes, so it is plain that in pursuing this legislation and the ABC Test, Biden and the Democrats are in large part simply pursuing their own self-interest.

It is also no secret that the Democrats are desperate to reverse the nationwide decline in union membership, especially in light of the Supreme Court decision Janus v. AFSCME, which held that public sector workers could not be forced to join a union and pay dues. Declining union membership will undoubtedly hurt the Democrats long-term if left unabated, so there should be no doubt as to how serious the Democrats are about changing federal law to reverse this trend.

Other Options

But should Congress fail to pass the PRO Act or similar legislation, Biden could still impose it on the nation through other means. The first way would be to simply issue an executive order that would direct all relevant federal agencies such as the Department of Labor, the Internal Revenue Service, and the Social Security Administration, to adopt the ABC test as the standard for determining whether or not a worker should be classified as an independent contractor.

Since the President has a duty to “supervise and guide Executive officers in their construction of the statutes under which they act in order to secure that unitary and uniform execution of the laws” (Myers v. United States 272 U.S. 52, 135 (1926)) Biden would be well within his rights to issue an executive order directing federal agencies to adopt the ABC Test for determining a worker’s classification, especially since there are no federal statutes which provide a definition of who qualifies as an employee versus an independent contractor.

Biden could also initiate the rulemaking process and have the ABC Test formally adopted as a federal regulation. This process would be more time-consuming and complex, but it would still prove useful to the Democrats, insofar as it would make the test relatively permanent as an established federal rule. Adopting the ABC Test as an official rule would also entitle it deferential treatment by the courts as a situation where an agency was interpreting its own operating statutes in the absence of Congressional guidance.

The Department of Labor in fact recently proposed a new rule to determine who qualifies as an independent contractor, and they proposed adoption of the economic reality test, which is entirely different and much more accommodating towards independent contractors than the ABC Test. If Biden is elected, however, it is likely that this proposed rule will be withdrawn and either held pending passage of the PRO Act or resubmitted as a proposal to adopt the ABC Test.

Lastly, Biden and the Democrats could bring about the adoption of the ABC Test nationwide through the selection of federal judges who are more inclined to the claimed merits of the ABC test. The question of who constitutes an employee versus an independent contractor is one that the Supreme Court has taken up before, so it is not implausible that it could come to them again, especially if one or more lower circuits adopt the ABC Test. California Supreme Court Justice Leondra Kruger, who voted to adopt the ABC Test in Dynamex, has already been identified as a leading candidate for the United States Supreme Court in light of Biden’s promise to nominate an African-American woman. Her colleague Goodwin Liu, who also voted in favor of adopting the ABC Test in Dynamex, has also previously been nominated for appointment to the federal bench.

There are likely numerous other state and federal judges and lawyers who are inclined towards this test, so Biden would have no trouble finding candidates who would rule in favor of adopting this standard when the time comes to fill a vacancy on the Supreme Court. Since the federal government’s current standard for determining who qualifies as an independent contractor is the product of federal case law, a simple change in the makeup of the Supreme Court and the rest of the federal judiciary will be more than sufficient to have the ABC Test imposed upon the rest of the nation, including in any and all relevant contexts, such as tax, labor, and employment law.

CONCLUSION

In conclusion, a Biden win in November all but guarantees that many independent contractors across the nation will soon see their livelihood seriously curtailed, if not eliminated. As with Obamacare, Biden and the Democrats have made the adoption of the ABC Test a categorical imperative, meaning that adopting it take priority over almost all other important objectives, irrespective of the extensive collateral damage it will cause for thousands upon thousands of working individuals who work as independent contractors. Biden and the Democrats are quite confident that imposing the ABC Test will make their political power increase well beyond the size of any concerted blowback, and that the ABC test, along with other aspects of the PRO Act will put their political power base on a sizable upward trajectory. Hence, there is no realistic scenario in which they will not pursue imposing this test under a Biden presidency. The only real question that remains is exactly how they ultimately decide to do it.