Like wreckage following a tornado, California’s effort to eliminate gig work trailed Julie Su as she failed upward from the state’s Labor and Workforce Development Agency secretary to Washington, where she’s the acting labor secretary.
In her previous capacity, Su was a hardline supporter of California’s Assembly Bill 5, which outlaws a wide variety of independent contracting jobs. As a federal official, she’s been assigned the task of spreading the pain across the rest of the country.
AB 5 is not perfectly mirrored in the federal PRO Act. But there are similarities. The California legislation is a worker-classification law. Its purported objective was to ensure that workers are properly categorized, using the “ABC test” to determine their employment status. If workers are to qualify as independent contractors, they must be (A) “free from the control and direction of the hiring entity in connection with the performance of the work”; (B) perform work “outside the usual course of the company’s business”; and be (C) “customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”
It’s a standard that is impossible to reach. No freelance worker can meet all three conditions – unless a dog walking company pays an independent contractor to clean gutters, or a law firm pays a gig worker to cut the senior partners’ hair. And that was no mistake. AB 5 was written and passed with one goal in mind: to increase the pool of prospective union members by erasing gig work and requiring companies to hire their freelance workers. It was a trophy hunt for the hundreds of thousands of rideshare drivers, whose heads labor bosses want to hang in union halls.
It worked on one level. Even with carve-outs for politically favored occupations, gig work was battered. A paper published this year by the Mercatus Center found “self-employment and overall employment significantly decreased” after AB 5 took effect.
“Our estimates indicate that self-employment fell by 10.5 percent on average, while overall employment fell by 4.4 percent on average,” with “occupations with a greater prevalence of self-employed workers” experiencing “greater reductions in both self-employment and overall employment.” There is also “no robust evidence that traditional employment increased post AB 5.”
The PRO (Protecting the Right to Organize) Act is more sweeping. It amends the National Labor Relations Act to make union organizing easier than ever. It would also adopt the ABC test, “in order to determine whether workers are employees for the purpose of union organizing and collective bargaining.” In its current form, the NLRA has no jurisdiction over independent contractors.
The PRO Act has struggled in Congress. The House passed it in 2019 and 2020, but it died in a Senate committee in both years. Reintroduced last year in the current Congress as the Richard L. Trumka Protecting the Right to Organize Act, it still hasn’t become law. So, the White House intends to jump the legislative process and simply issue edicts from the Labor Department that will have the same effect on gig workers as the PRO Act.
It’s unlikely that Su, who was re-nominated in January to be the federal labor boss after her appointment was blocked last year by the same Senate that’s rejected the PRO Act, was chosen to run the Labor Department by accident. Her history as an “aggressive enforcer” of AB 5, her threats of “investigations and audits” of voluntary, mutually beneficial working agreements, and her eagerness to issue citations and assess wage and tax penalties made her the ideal choice to bust worker freedom across the country.
Should Su successfully take her campaign national with the proposed rule, don’t expect clarity and order to emerge. There will be “confusion and litigation chaos” in much the same way AB 5 “unleashed chaos in the state’s politics and courts.”
The final rule “creates an ambiguous and difficult-to-interpret standard for determining independent contractor status,” says the Associated Builders and Contractors.
AB 5 is one of the most loathed bills to become law in 21st-century California. Its headaches, hassles, and threats to livelihoods inspired Twitter hashtags such #RepealAB5, #AB5Stories and #FixAB5. Workers were legitimately afraid they would lose their incomes and freedom to choose their employment arrangements. And now Su is the common thread that ties those who’ve been harmed to those who face the same grim future.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.