Legislation’s impact could be most keenly felt by freelancers, temporary workers and independent contractors
By Melinda Rizzo
BridgeTower Media Newswires
Can a pandemic-savaged economy withstand more storms?
The PRO Act, a prospective legislative move currently under consideration in the U.S. Senate Committee on Health, Education, Labor and Pensions, as proposed would ban state right-to-work laws, require employers to provide personal employee information to unions, such as cell phone numbers and addresses, and make it harder for companies to legally hire gig workers.
“Now the pendulum is swinging the opposite direction and employers won’t have control or the ability to control what happens within their companies,” said the Hon. Rebecca Warren (Ret.), a member and attorney at Norris McLaughlin in Allentown.
Warren said the proposed Protecting the Right to Organize (PRO) Act is the most sweeping labor law overhaul since the National Labor Relations Act (NLRA) of 1935.
On March 9, the U.S. House of Representatives voted 225 to 206 in favor of the act, now referred to as H.R. 842.
Its impact could be most keenly felt by more than the 57 million Americans currently working as freelancers, independent contractors and temporary workers. The sector contributes an estimated $1 trillion annually to the U.S. economy, according to a December article published on the Forbes website. And by 2023 more than 50 percent of all workers are estimated to be part of the gig economy, the Forbes report said.
Beyond Uber, Lyft, Fiverr or Upwork, the gig economy traces its roots to the early 1900s, when jazz musicians referred to the work they did in clubs and bars as “gigs.”
The gig economy has proven to be an economic powerhouse with exponential growth during the coronavirus pandemic.
“I think, ironically, this is taking away a lot of the individual freedoms to being employed in the way [independent contractors] wish to be employed,” Warren said.
Supporters, such as U.S. Sen. Joe Manchin, D-W. Virginia, say it will level the playing field for unions trying to organize workers.
“The PRO Act would protect and empower workers to exercise our freedom to organize a bargain,” Richard Trumka, the president of the AFL-CIO, told NPR in a recent interview. “It’s a game changer. If you really want to correct inequality in this country — wages and wealth inequality, opportunity and inequality of power — passing the PRO Act is absolutely essential to doing that.”
Efforts to reach the Teamsters Local 776 in Harrisburg, the Pennsylvania AFL CIO in Harrisburg were unsuccessful.
From photographers to truck drivers, hairdressers, journalists, musicians, web designers and block-chain architects, an estimated 35% of the current workforce is made up of gig workers.
“If we make them employees, somebody has to employ them,” said Vincent Caniello, an attorney member at Cozen O’Connor in Harrisburg.
Reducing or devastating incomes for some independent contractors without their ability to find full-time jobs could become an unexpected consequence of the PRO Act.
According to the American Society of Journalists and Authors website, the Internal Revenue Service recognizes two types of workers: W2 employees and self employed or independent contract workers. The PRO Act, as written, uses the ABC test to determine if a worker is eligible to be an independent contractor rather than the IRS test, which is used by independent contractors for tax purposes.
The PRO Act could create “more stringent [job] definitions with the purpose of excluding workers from those categories,” Warren said. “We’re still in the middle of a pandemic and it seems like a crippling blow may be landed” to businesses.
Lars H. Anderson, an attorney shareholder at Hourigan, Kluger & Quinn, P.C. in Kingston, Luzerne County, who represents labor unions and employers, said the pandemic has beleaguered employers for more than a year. From dealing with the pandemic, implementing health and safety protocols, managing employees and working with government agencies like the Occupational Safety and Health Administration, many companies had to drastically change how they do business.
“A lot’s been thrown at employers. Adding more changes could have a big impact. “Is this the right time?” Anderson said.
From a legal standpoint, he said, the PRO Act as written would definitely impact independent workers, their classification and how employers can treat and hire them.
“Essentially it says if you can’t hire somebody full time with full benefits, there is no job at all,” said David N. Taylor, president and CEO of the Pennsylvania Manufacturers’ Association in Harrisburg.
States would lose their ability to regulate labor practices because the PRO Act bans companies from hiring worker replacements during union strikes.
“It would overturn right-to-work laws in states that have them,” Taylor said.
Right to work laws prohibit “union security agreements,” or forcing non-union employees to join or share the cost of unions in the workplace.
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Impact on Right-to-Work
There are 27 states with right-to-work laws on the books. West Virginia’s right to work status is currently suspended due to litigation, the Workplace Fairness website said.
Taylor said labor laws currently allow states to set their own policy on labor relations. “The PRO Act would eliminate that, and every state would be under compulsory union [requirements],” he said.
An “open shop” does not require employees to join or pay dues to a union. A “closed” or union shop means workers must be part of a union to remain employed, and must contribute to the union by paying dues.
“The PRO Act says if you are not a part of the union it’s fine, but you must pay a fair-share fee to the union because you will benefit from it,” Warren said.
Taylor said other features of the PRO Act would:
• Eliminate the secret ballot in union elections.
• Create “Ambush Elections” so employers would not have timely notice about an election, preventing them from fully presenting their side of an argument to employees.
• Destroy the gig economy.
Under the proposed legislation unions could attempt to secure a pro-union vote at a company without providing a rebuttal forum for employers, Warren said.
For some independent contractors the shift to full-time employment could be a benefit, Anderson said.
Addressing worker inequities outside a heavy manufacturing and industrial factory era “harkens back to the 1930s, not how business is done now,” said Ahmed S. Rahman, associate professor of economics at Lehigh University in Bethlehem.
“I think it [the PRO Act] lacks imagination,” he said.
He said while the PRO Act is a “robust and muscular approach” to labor law, what is needed moving out of the pandemic is a more flexible workforce approach.
Trying to define an evolving workforce by 19th or 20th century industrial rules no longer applies.
If the workforce is at a crossroads, Rahman and Taylor said there should be opportunities to reinvent labor unions to keep them relevant for today’s workforce needs.
Taylor said labor unions could take this opportunity to become “keepers of the flame” or become guilds to train apprentices and build out the workforce in new and different ways.
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A square peg in a round hole
Calling the PRO Act a “structural long-term proposition,” Rahman said it launches the country into an area of labor and macro economics, “that will be with us for a very long time.”
A robust post-pandemic recovery should create an environment where the economy works for everyone.
“People can make a living in the manner that is best suited to them, their talents, personal lives and lifestyles. This is like trying to force a square peg into a round hole,” he said.
