Workers’ Freedoms Including Classification, Right-to-Work, Illinois Law and the PRO Act Come to Forefront for 2022 Elections

Written by John Lopez

Prologue:  On February 13, 2022, John Lopez called-in to the national radio talk show Beyond the Beltway with Bruce DuMont and asked a question to Dan Ronan, associate news editor for Transport Topics, concerning worker classification in the context of independent trucking.  The relevant 2 1/2 minutes clip is cued from the YouTube livestream with the context of the question being California’s Assembly Bill 5 and unintended consequence of legislation targeting Uber and other app-based companies, and the direct impact to inflation and the supply chain challenges within the trucking industry.

The “People’s Convoy” where American truckers, inspired by their counterparts in Canada’s “Freedom Convoy”, protested for an end to COVID mandates with various truck tours across the United States, aiming for the State of the Union address by President Biden on March 1.

While COVID mandates were the immediate target of the People’s Convoy, over-the-road truckers face numerous other challenges far beyond high fuel costs and inflation all face in 2022.

Truckers in general, and independent truckers in particular, are fighting for their very right to work the way they want to work, as 1099 independent contractors, with the flexibility, benefits, and risks, of being entrepreneurs.  The challenges worker classification laws the independent truckers face impact all.

Because of pro-union legislation like the Protecting the Right to Organize (PRO) Act, all 1099 independent contractors are at risk.

But significant risks to losing workers freedoms doesn’t stop with 1099 workers.

Sunday (March 20, 2022) afternoon, U.S. Senator Tim Scott’s (R, SC) op-ed was published in The Wall Street Journal (WSJ) introducing Scott and congressional Republicans plan for filing legislation, both in the U.S. House and the U.S. Senate, to present an alternative to the Biden Administration’s and Democrats assault against workplace freedom in recent years, both in California through the Assembly Bill 5 (AB5) Law, and the PRO Act.

The legislation, currently titled as the “Employee Rights Act of 2022”, presents conservatives’ alternatives to protect workplace freedoms not only for W-2 employees, but also for the nearly 60 million workers who choose to be 1099 independent contractors exercising their freedoms, and the risks that go with their freedom to market their labor the way they choose, and not the way leftist Democrats want, through a labor union.

Senator Scott, who was once an independent contractor in the insurance industry before his election to Congress, states:

“Some politicians are backing labor policies that benefit government regulators, union bosses and other special-interest groups.  It’s time to put workers back in the driver’s seat.  This week I’m introducing legislation that protects workers, supports small-business owners and encourages innovation.”

Lisa Rothstein

Reaction from freelancers who’ve been fighting AB5 in California and similar laws, including the PRO Act across the country on Sunday (3/20/22) was swift, via Twitter, like west coast freelancer Lisa Rothstein:

Thank you, Senator Tim Scott!!

“As a California freelancer who is NOT an Uber driver, I’m one of many fighting for the rights of writers, artists, instructors, consultants and more to be self-employed.

“AB5, PRO Act & any law with ABC test decimates independent contractors by CHOICE!”

A review of the PRO Act and the specific risk to 1099 independent contracting is in order for readers not familiar with the Democrats’ attempt to rob workers of freedoms in the American workplace.

Significance of the PRO Act as the Left Attempts Takeover of the American Workplace

Jim Thompson, September, 2020

The PRO Act would update the National Labor Relations Act to empower the Federal government with oversight to ensure workers who want to organize into unions can do so, without businesses imposing impediments to unionize.

Components of the PRO Act include:

  • Overturning 27 states’ right-to-work laws which prevent compelling a worker to join a union and pay union dues against their will. (Union dues are most often spent on liberal political candidates and groups such as Planned Parenthood.)
  • Provide unions with personal identifiable information (PII) of workers in a business where the union is petitioning to form a local.
  • Nationalizes the “ABC test” to determine if a worker is an employee or a 1099 independent contractor, the latter including freelancers and gig economy workers who all receive 1099 forms for tax purposes.

There are other components in the legislation, including the joint-employer rule for franchises, but the risk to most 1099 independent contractors across the country is the ABC test.

What is the ABC Test?

The ABC test, when first implemented in California in 2020 through AB5, harmed over 2 million workers from freelance writers to independent truckers vital to the supply chain challenges facing the nation today.

A significant key component of the PRO Act is the implementation of the ABC test to classify workers, which was originally developed in the 1930s for factory workers.

The modern ABC test is a three-part test that differentiates W-2 employees from 1099 independent contractors for tax status. Under a law with the ABC test, a worker is automatically considered an employee for tax status unless they meet all three of the following criteria.

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

  2. The worker performs work that is outside the usual course of the hiring entity’s business; and

  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

B is where most 1099 workers run into trouble.  This is where the left tries to force employers to reclassify their workers from 1099 independent contractors to W-2 employees, who would then likely be forced into union membership. Additionally, under the PRO Act, right-to-work laws in 27 states would be nullified.

The left’s government-knows-better mentality wants all workers to be forced into a union and pay union dues so that unions will fund leftist politicians and their causes, including Planned Parenthood.

The ABC test is currently used for tax status in two states: Massachusetts and California. The California AB5 law, effective January 1, 2020, implemented the ABC test for tax status.

Illinois uses the ABC test for workers and unemployment compensation, but NOT for tax status.  The “common law,” or “IRS test,” is used for tax status in Illinois which favors workers determining for themselves how to be classified.

Biden Administration Suffers Setback in Federal Court and Ordered to Reinstate Trump-era policy on Independent Contractor Status

Timing is everything in politics, and Senator Scott introducing the legislation for workers rights happening within a week of a Federal Court ruling in the Eastern District of Texas cannot be a coincidence.

Last week (March 14, 2022), in litigation known as Coalition for Workforce Innovation v. Walsh, E.D. Tex., No. 1:21-cv-00130, 3/14/22 ruled the Biden Administration, in attempt to overturn the Trump Labor Department policy favoring independent contractor status under current law, lost a round in Court.

The ruling strikes a blow against the unions’ demands independent contracting definition is to change under the Fair Labor Standards Act (FLSA) to apply the ABC test without congressional action.

The PRO Act passed the U.S. House in early March of 2021, and the Biden Administration, anticipating the U.S. Senate and its new, though slim, Democratic majority, would quickly pass the PRO Act in the Senate, permanently suspended the Trump Administration’s rule for independent contractor status under FLSA at the same time the House passed the PRO Act.

Senate passage of the PRO Act did not happen, and not due to the U.S. Senate filibuster or U.S. Senator Joe Manchin’s (D-WV) objection.

Three Democratic Senators refuse to co-sponsor the PRO Act in the U.S. Senate, and U.S. Senate Majority Leader Chuck Schumer (D-NY) said in late March of last year, he would not move the legislation to the U.S. Senate floor for a vote until at least 50 Senators co-sponsored the bill.

The Democratic holdouts are:

  • Mark Kelly (AZ)
  • Kyrsten Sinema (AZ)
  • Mark Warner (VA)

In U.S. Senator Scott’s op-ed, he specifically points out Democrats’ strategy:

“It [PRO Act] doesn’t make sense — unless you understand that the codependent relationship between labor bosses and liberal elected officials requires a radical agenda that prioritizes their power at the expense of American workers.”

The “codependent relationship” and “radical agenda” manifests itself in Illinois, and well before Amendment One, Illinois constitutional amendment prohibiting Illinois being a right-to-work state appears on the ballot in November.

Illinois Democrats and Labor groups prepare for new ABC test law

Cristina Castro

In May of 2020, state Senator Cristina Castro (D-Elgin) introduced Senate Resolution 1158 (SR 1158) during the height of the COVID pandemic and the resolution included the following:

“Urges the Department of Employment Security to collect data, where practicable, regarding incidents of employer misclassification and regarding applicants who are found by the Department to qualify for Pandemic Unemployment Assistance as self-employed, independent contractors, and sole proprietors.”

Source: Illinois General Assembly

But reading the full verbiage of the resolution it expands greatly beyond the “Pandemic Unemployment Assistance” scope, is this definition of “employer misclassification”:

'Employer misclassification' in this paragraph shall mean a
case in which a worker is classified by his or her employer as
an independent contractor and paid 1099 wages but is later
deemed by IDES to qualify as an employee, based upon the legal
standard applicable to State of Illinois unemployment law;"

From full text of S.R. 1158, Illinois General Assembly (ILGA.GOV)
Emphasis added

The phrase “legal standard applicable” jumps out, because the crux of the controversy of the California AB5 law is the change in state law to apply the “ABC test” as the “legal standard” to define a worker as an employee or an independent contractor for tax status.

As explained above concerning the ABC test, Illinois uses ABC test for unemployment compensation, but not for tax status.  Illinois currently uses the “common law test” or “IRS test” which is a progression of questions which favors self-classification for a worker to be classified as a 1099 independent contractor, opposed to a W-2 employee.

What does this have to do with unionization?  Everything, since under current Federal law which the PRO Act would change if it passes, only W-2 employees can organize into a labor union.  Current law prevents independent contractors from unionizing, and survey after survey proves 1099 workers want to stay independent.

But what workers want is irrelevant to Democrats.  It’s about union bosses’ wish, as Senator Scott’s op-ed points out, of a radical agenda to force unionization on workers who do not want or need to be in a union.

On the eve of Joe Biden’s Inauguration as president of the United States, the left, pro-labor Illinois Economic Policy Institute with academicians through the University of Illinois Labor and Employment Relations Project for Middle Class Renewal issued its findings of research on “transportation network providers” (TNP) pay, as another component of the paper trail to bring a California AB5 law into Illinois.

Included in its questionable findings is the following:

“This analysis suggests that the treatment of TNP drivers as ‘independent contractors’ suppresses their earnings, shifting income from the workers to the executives and shareholders of TNP companies. Two potential policy alternatives could be pursued to improve outcomes for TNP drivers in the City of Chicago.”

The policy alternative recommended by the joint study from early 2021 which the Illinois General Assembly could approve into law, with Governor JB Pritzker’s signature is:

State lawmakers could classify TNP drivers as employees, granting them full employment rights and access to basic labor protections, including minimum wage laws, overtime pay laws, workers’ compensation coverage, unemployment insurance benefits, and the ability to collectively bargain.”

Where has the above been heard before?  Yes, in the Prologue to this article about Uber, one of many TNPs including GrubHub, Uber Eats, Doordash, Lyft and many others.

The left’s wide net to capture the workplace for a Democrat funding farm through unions more reason for mainstream voters to be vigilant throughout this election year.

John Lopez has written about policy and elections through the McHenry County Blog since 2019. He is now semi-retired, and does freelance work with analytics, as well as political candidates, emphasizing policy as the means to advance the conservative message, by engaging through policy “dog fighting”, applying discernment for winning and advancing God’s Kingdom agenda.

John’s known for getting past the talking points, the narratives, the abstracts, the platitudes and the bromides in order to discuss policy and apply Scripture to overcome unholy divisions in the local community, our state, and nation.

John has been married for over 16 years.