Republicans on the House Subcommittee on Workforce Protections held a hearing on April 19 in which they criticized the Biden administration’s policies on independent contractors. The hearing added to the ongoing debate on Julie Su, President Biden’s nominee to take over the Department of Labor from the departed Marty Walsh, as Ms. Su was involved with California’s strict AB 5 independent contractor law.
The hearing, “Examining Biden’s War on Independent Contractors,” focused on the Biden administration’s policies on independent contractors, including a proposed rule that would restrict the classification, and the nomination of Julie Su to head the Department of Labor. Rep. Kevin Kiley (R-CA) identified “three distinct fronts” in President Biden’s “war on workers,” including the PRO Act, which would codify the ABC classification test into law, the DOL’s Proposed Rule on independent contractor status, and the nomination of Ms. Su.
From California law into federal policy? House Republicans and their witnesses decried California’s approach to independent contractors and warned the Biden administration was attempting to do the same on a national level. “AB 5 represents a scorched-earth approach to policymaking,” said Karen Anderson, a California freelancer and one of the hearing witnesses. Dr. Liya Palagashvili, Senior Research Fellow, Mercatus Center at George Mason University, warned that the DOL’s current independent contractor rulemaking could function the same as the infamous California law, but without the ability to create exemptions after the fact (as has been the case with AB 5).
Julie Su, President Biden’s much-embattled nominee for Secretary of Labor, who was involved with AB 5 enforcement during her time as California Labor Secretary, was also a centerpiece of the debate. Republicans warned that her tenure as Secretary could bring similar approaches on a national level. “It is a direct and literal transfer of California failures to Washington,” said Rep. Kiley. At a Senate Health, Education Labor and Pensions Committee confirmation hearing, Ms. Su indicated that she would note enforce a Labor Department rule similar to AB 5. Ms. Su is likely to face a Senate committee vote on her nomination next week.
Meanwhile, FTC Commissioner Alvaro Bedoya (D) stated last week that antitrust law does not bar independent contractors from collective organization. “Congress has made it clear that worker organizing and collective bargaining are not violations of the antitrust laws,” said Bedoya. Such remarks are a departure from previous FTC policy; in 2017, the Commission fought against a Seattle ordinance that would have allowed platform drivers to collectively bargain. While the FTC’s new stance by itself does not change any law or regulation, it could empower or encourage legislative attempts similar to the Seattle ordinance going forward.
Outlook: One of the “three fronts” of the Biden administration’s approach to independent contractors, the PRO Act, stands virtually no chance of becoming law in the current Congress. Meanwhile, the DOL’s final rule on independent contractor status is scheduled for release later this year. Ms. Su’s nomination has been hotly contested in the Senate and by the business community at large. However, even if she fails to garner enough votes to secure confirmation, Ms. Su could continue to serve through the rest of the administration as Secretary in an acting capacity.