R Street Vote Alert: Vote NO on H.R. 842, the PRO Act of 2021
R Street’s Competition Policy Program identifies policies that accelerate the growth and success of businesses and protect the public interest, which includes labor issues surrounding independent contractors. The PRO Act would adversely affect independent contractors and businesses across the country because it would codify the disastrous California ABC test in federal law. This law will be bad in practice for several reasons:
- The test would make it nearly impossible for many businesses to hire contractors;
- Real estate agents, construction workers, gig economy workers and even freelance journalists are independent contractors that would fail this test;
- During this economic downturn, applying this test nationwide would be harmful since it could already cost California alone up to $6.5 billion in additional payroll expenses for businesses; and
- In California, legislators ultimately exempted over 100 professions from their worker classification law, AB5.
The PRO Act would greatly increase costs for both workers and firms that engage in their services and restrict opportunities at a time when many Americans depend on independent, flexible work to make ends meet. We hope Congress will join us in rejecting the disastrous PRO Act.
For more on this legislation and its impacts, see R Street Senior Fellow Jarrett Dieterle’s op-ed in the National Review, titled “Don’t ‘Reclassify’ Contractors as Employees”.
