Americans for Prosperity joins together with Independent Contractor Coalition to Oppose New Biden Administration Rule Now in Effect

Mar 13, 2024 by AFP

Today, a new Biden Department of Labor (DOL) independent contractor rule went into effect despite significant opposition from Americans for Prosperity and numerous others who have noted the harm the rule will cause as well as questioned the authority of DOL to implement such changes.

On Friday, March 8, Americans for Prosperity sent a letter to Congress as part of an Independent Contractor coalition warning leaders of the harms this will cause and reminding them of their Congressional Review Act powers to stop implementation of harmful rules.

The coalition of 31 organizations, including Americans for Prosperity, Institute for the American Worker (I4AW), and Independent Women’s Forum (IWF), highlighted in its press release: “As a Congressional Review Act is being considered to rescind the Department of Labor’s (DOL) Independent Contractor rule which goes into effect today, 31 policy organizations sent a coalition letter to the U.S. Congress last week raising concerns with how the new rule would have a disastrous impact on entrepreneurs by improperly classifying many independent workers as employees against their will.”

Austen Bannan further noted that “tens of millions of Americans choose self-employment careers to meet the needs of their families and grow their communities as small business entrepreneurs. This new independent contractor rule inexplicably seeks to destroy these productive career paths that many Americans want and need,” said Austen Bannan, Employment Policy Fellow at Americans for Prosperity.

AFP and the coalition highlight that the new rule is problematic by, among other things:

  • De-emphasizing a focus on the core factors of the “nature and degree of control over the work” and the “worker’s opportunity for profit and loss,” instead claiming to equally consider six factors, many of which have subjective definitions and emphasis points that have never previously been used.
  • Emphasizing strong consideration of not just evidence of direct control but even reserved or theoretical control, imposing a chilling effect on businesses and workers who are fully committed to compliance but unable to navigate unpredictable DOL regulatory oversight.
  • Diminishing the value of certain types of earnings, initiative, and investment when considering the independent status of a worker in order to give DOL greater ability to restrict contracting.

The coalition further warned: “It is well documented that President Biden and Acting Secretary Su are strong supporters of destructive “ABC tests” such as the one Acting Secretary Su helped implement in California while serving as the state’s Secretary of Labor. Recent research from the Mercatus Center now indicates that the Assembly Bill 5 law in California that instituted an ABC test is now associated with an over 10.5% drop in self-employment and an overall 4.4% drop in employment in affected industries, foreshadowing the type of harm this new rule may impose on employment across America.”

Moving forward, AFP will continue to push back against this harmful regulation and instead promote flexible work policies that advance worker choice in America. This includes supporting the Congressional Review Act authority of Congress to rescind this rule. U.S. Senator Bill Cassidey (LA) has now introduced S.J. Res 63, and U.S. Representative Kevin Kiley (CA) has introduced H.J. Res 116, to repeal this rule.

Previous work from AFP and sister organization Americans for Prosperity Foundation (AFPF) includes:

An AFP led coalition letter in June 2022 sent to DOL over concerns about a potential rule being proposed: