AB5 Goes National: Independent Contractor Rule Alerts Nationwide Attention

By
Conservative Research Group
-

The Biden administration, while you were distracted with all things Iowa, Hunter Biden, and Trump throwing Vivek RAMASWAMY under the bus, is decimating small businesses and stealing the livelihoods from independent contractors by bureaucratic fiat. Julie Su, the Acting Secretary for Labor, quietly released a revised Independent Contractor Rule in January. It’s just as bad as predicted. Kevin Kiley, a Republican California Representative who was at the forefront of the war against independent professionals when he served as an Assemblyman in California, delivered the bad news before the Department of Labor announced the rule.

It’s official. Biden and Julie Su have just taken Gavin Newsom’s war against workers to the national level. They announced an “Independent Contractors” rule based on California’s notorious AB 5 Law. This will force millions of Americans to lose their jobs.

This is a conservative estimate. Since 2022 there have been 57.3 million Americans that consider themselves to be freelancers or independent contractors. Legacy media tends to group all these categories under the “gig economy” to make it seem like technology or rideshare. But these are dental hygienists, soccer coaches, fabricators, and farriers as well as home health care providers. This DOL IC Rule will affect over 600 professions.

Kiley then went on to discuss the wreckage AB5 had left behind. Four years after the wreckage was created, it is still not fully quantified. If this rule is implemented, Americans can expect to see the same level of damage across the country.

Here are some reviews AB 5 has received in California.

Yoshar Ali, Newsom’s former deputy chief-of-staff, called it “one the most destructive pieces legislation in the last 20 years” and added that “it’s truly horrifying how many people it negatively impacts.”

Willie Brown, former State Assembly Speaker and Mayor of San Francisco, said that the law made it difficult for him to not “picket”, against “bastards”, at the Capitol as well as the special interest groups who “took advantage” from them.

Andrew Cuomo, the governor of New York, rejected a law similar to California’s. He said he did not want to make “the same mistake” in New York.

The Daily Kos, a website that warns other states not to make the same mistake as California’s Gavin Newsom, called the California law “disastrous”, “asinine”, and its supporters “shameful”.

-The California NAACP head blasted AB 5 as a ‘terrible law’ and a ‘gut punch to our communities.

The CEO of the Black Chamber of Commerce described it as a “catastrophe,” responsible for “enabling racism, defending racism, and propagating racism.”

Two hundred Ph.D. economics have reported that the law “does substantial harm, and is avoidable to those who are now the poorest and have the least alternatives available.”

Biden ran on a campaign promise to impose a federal standard “modeled on” California’s AB 5 Now he has done exactly that and even promoted the architect of AB 5 Julie Su to attack the right to earn a living in the most ruthless way possible.

The Independent Contractor Rule has been recorded in the Federal Register since January 10, 2024, and will take effect on 10 March 2024. The Department of Labor explains in 339 pages why independent contractors shouldn’t exist. The rule is based on the assumption that independent contractors do not have a right to decide whether they are independent contractors or employees. The DOL is responsible for determining this.

The Biden administration used court precedents to expand on this, creating six factors that will be considered in the “totality of circumstances”. This analysis will determine whether the professionals are dependent upon the potential employer or working for themselves.

The phrase “economic reality”, which appears 345 times in the Rule, is one way to deny independent contractors their right to make money how they want. This is positively chilling. If Americans didn’t pay attention to independent professionals in California who raised the alarm about AB5, they should now. Independent contractors, and in particular California professionals adversely affected by AB5, have once again raised the alarm. They are determined to see the rule withdrawn.

Julie Su, the Acting Secretary of State, issued this pathetic post to stop the torrent of angry comments. Su’s attempt to gaslight the public failed.

Georgia Rep. Rick Allen issued this statement in which he strongly objected to the independent contractor rule.

The final rule released today by the DOL of President Biden would remove the flexibility that independent contractors provide to millions. The Congressional Democrats’ radical PRO Act would have significantly narrowed the definition of independent contractors. President Biden has now done their bidding by using the DOL as a weapon to circumvent the legislative processes.

As I have visited small business owners in Georgia’s 12th District I have heard that the most pressing issue is the lack of workforce. It is impossible to eliminate a model of employment that has given millions of Americans the flexibility they require and helped countless people achieve the American Dream.

“My Employee Right Act, which I introduced last year would create a clearly defined definition across federal law to protect independent workers, as well as provide essential protections of workers’ freedoms, rights, and choices in the 21st century economy. Our government should encourage the entrepreneurial spirit of today’s workforce, rather than crush it with bureaucracy. “Today is a stark reminder to Congress that they must pass this legislation quickly.”

This is one of many attacks by the Department of Labor on small businesses and independent professionals. In late October, the National Labor Relations Board published its Joint Employer Status Rule. This rule essentially limits franchisors’ and franchisees’ earning potential and autonomy. Chambers of Commerce, small business associations, and franchisors have been lobbying Congress to stop the rule from taking effect on February 26, causing a growing outrage. Congress took action on Friday to stop it. The Congressional Review Act gives Congress the power to overturn overreaching regulations. A resolution was therefore submitted to have the Joint Employer Status Rule rescinded.

The American Hotel & Lodging Association applauded this move.

“Today’s House votes is a win for common sense. Chip Rogers, AHLA’s President & Chief Executive Officer, said that neither companies nor employees wanted this job-killing rule. It would destroy the franchise model which supports millions of jobs in small businesses. The bipartisan nature underscores the damage this misguided Biden Administration regulation would do to our fragile economic system. We thank Speaker Johnson, Rep. James, and Dr. Foxx for making this an urgent priority. We urge the Senate, to pass this resolution and stand up for America’s workers as soon as possible.

Independent Women’s Voice, a women’s advocacy group, also approved.

Independent Women’s Voice sent a letter to support H.J. Res. 98 pointing out the negative effects of the NLRB’s final joint-employer rule on small businesses and franchises.

Patrice Onwuka is the director of Independent Women’s Voice’s Center for Economic Opportunity. She has issued the following statement.

“Passing the CRA is good news for America’s small businesses and franchises. The Biden administration is imposing costly, time-consuming, and growth-limiting regulations on the economic and labor engines of our country. About 30.6% are women-owned franchisees. IWV was very concerned that the NLRB joint employer rule could undo all the success women entrepreneurs had enjoyed in the past two decades. It would shrink the market, increase liability costs, and make it harder for them to run their businesses. We applaud members of the House who have righted an egregious injustice, and encourage the Senate to do the same.”

Who is the beneficiary of these Department of Labor and NRLB Rule Changes? Labor Unions who invested millions in the Biden 2020 campaign and are expecting a return. The AFL-CIO – the largest union in the country – was furious at Congress’s move.

Rep. Kevin Kiley plans to also use the Congressional Review Act and the role he holds as the chair of the Employment and Workforce Protection Committee to end the Independent Contractor Rule.

We will use every tool at our disposal to prevent the Biden-Su rule on “Independent Contractors” from destroying the lives of millions of Americans.

I will first introduce legislation under the Congressional Review Act to annul it. This is an expedited procedure to overturn an executive agency.

Second, I have secured language in the Labor Appropriations Bill that states no funds can be used to enforce this rule. It is now a dead letter.

Thirdly, I have teamed up with Rep. Elise Stefanik to create the Modern Worker Empowerment Act. This act establishes a legal standard that protects independent workers.

Fourth, I have introduced the Department of Labor Succession Act which has already been approved by the committee to prevent Julie Su – the architect of AB 5 – from clinging on to power despite her nomination being rejected by the Senate.

Fifth, I anticipate that there will be legal challenges to the new rules, both because of the questionable legality of Su’s continued office and also due to its overly expansive nature.

As Chair of the House Subcommittee on Workforce Protections, I will continue to oversee the Department of Labor with rigor and do all that I can to protect workers from the overreaching policies of this Administration.

SCOTUS also will hear the case of Relentless, Inc. v. Department of Commerce, in which, Ward Clark wrote that:

Has the potential to change dramatically the way federal regulations are issued. […]

Law is the only source of regulation. Any new law comes from Congress. Every regulation that is issued by any government agency must be authorized by a statute, voted upon, and approved by Congress. In recent years federal agencies have overstepped their regulatory authority. We can only hope that the Supreme Court will slam shut the door on the worst of these violations.

We can only hope and pray for the Relentless ruling and for Congress to take action to nullify the Department of Labor’s overreach. This will neutralize both the Independent Contractor Rule as well as the NRLB Standard for determining joint-employer status Rule before they cause permanent harm to the independent professionals of our country and the economy. We are in an election season, just in case you didn’t know. Americans from every state can petition their state legislators, senators, and representatives to express their opposition against the bureaucratic and economic nightmares of the Department of Labor, National Labor Relations Board, and other state agencies.