The Biden Administration wants to adopt a terrible California anti-freelancer law

In 2019, California passed Assembly Bill 5 (AB5) — a law that limited businesses’ ability to classify workers as independent contractors. This was in an effort to ensure that workers classified as contractors could access the same benefits usually designated for workers classified as employees.

However, as soon as the law took effect, numerous gig workers saw their gigs dry up. Vox Media — which championed the law as a victory for workers — cut off hundreds of jobs for freelancers in anticipation of the law.

In fact, the law was so unpopular that numerous gig workers asked the state for exemptions from the law. Uber and Lyft almost shut down their operations in the state. And as of October 2020, about 75 occupations were exempt from the anti-freelancer law.

Unfortunately, it appears that this was not a lesson enough for policymakers. on Tuesday, the Department of Labor proposed a similar law, to be enacted at a federal level.

The Biden administration is proposing a rule that could result in more “gig” workers being considered full-time employees, a potentially major shift in the nation’s labor laws that could disrupt ride-sharing, delivery, construction and other companies that employ independent contractors.

The draft rule, to be formally published on Thursday, is a test that the Department of Labor uses when it determines if employers broke wage and hour laws. It formally directs the agency to consider six factors when determining if a worker is an employee — and therefore entitled to minimum wage, overtime and the right to unionize — or an independent contractor, which is essentially a self-employed individual in business for themselves.

“We continue in our enforcement work to identify workers who are not properly classified, in construction, health care, even in restaurants, where we found that dishwashers were improperly classified as independent contractors to avoid paying them overtime,” Jessica Looman, principal deputy wage and hour administrator with the Labor Department, told reporters on Tuesday.

While the proposal does not necessarily require businesses to classify contractors as workers, it would restrict the ability of some businesses to hire independent contractors — much like the California law. Advocates claim that this will help stop the exploitation of workers — however way that is defined.

But if such a law was indeed beneficial, gig workers in California would not have asked to be exempt in the first place. The fact of the matter is that the gig industry brings with it numerous advantages to workers, chief among them being flexibility.

Students, for example, are able to work for companies like Uber and Lyft at flexible schedules that fit their academic needs. And in this period of high inflation, where workers are taking on multiple jobs just to stay afloat, gig work offers an especially good opportunity for flexible part-time work. It’s hard to imagine that any of these workers would benefit from a rule that makes it hard for them to make a living.

Evidence from California shows that anti-freelancer laws are terrible. The Biden Administration should not expect the results to be any different at the federal level.