Keep the “Independent” in Independent Contractor
Most independent contractors wish to stay that way. Some may believe that incorporating their businesses or forming LLCs protects them from legislation like the PRO Act, but recent actions in California and New Jersey indicate that’s likely not true. Any independent contractor who cannot pass the vague and antiquated ABC test, created in 1937 for factory workers of the Great Depression, is subject to the Department of Labor’s interpretation of the law.
The PRO Act and similar legislation across the country assumes you are an employee until proven otherwise. That means your clients must pay you full- or part-time on a W2 and afford you all the related protections, such as sick days and unemployment.
So, if you’re an independent contractor with four clients, all four clients are now your employers. Who will be responsible for your worker’s comp claim if you develop carpal tunnel syndrome while working? Which “employer” will provide your healthcare coverage? Will you get a 401(k) from four “employers” even if you only work for each one a single week per month?
By and large, independent contractors do not want to be employees:
• 75 percent say they prefer freelancing over a full-time job.
• 87 percent say they do not trust lawmakers to represent their best interests.
According to the 2019 “Freelancing in America” survey:
• 57 million people, or 35 percent of the U.S. workforce, are freelancers, up from around 53 million in 2014.
• Freelance income currently makes up almost 5 percent of the country’s GDP, or close to $1 trillion.
• 46 percent of freelancers can’t take full-time, traditional jobs for personal reasons, such as health issues and caregiving for sick or aging family members or young children.
We are FIGHT FOR FREELANCERS USA, a non-partisan, grassroots coalition of independent contractors who oppose the PROAct. Join us.