California's AB5 Goes National With the Independent Contractor Rule: Why You Need to Pay Attention
While you were distracted by all things Iowa, Hunter Biden, and Trump throwing Vivek Ramaswamy under the bus, the Biden administration is eroding small businesses and snatching away the livelihoods of independent contractors through bureaucratic fiat. The Acting Secretary of Labor, Julie Su, quietly dropped a revised Independent Contractor Rule on January 9, and it's as bad as expected. California Rep. Kevin Kiley (R), who has been at the forefront of this war against independent professionals since his time as an Assemblyman, rendered the bad news ahead of the Department of Labor announcement.
From the Tweet
Here are some of the reviews AB 5 received in California:
-Newsom’s own former deputy chief of staff Yoshar Ali called it "one of the most destructive pieces of legislation in the past 20 years," adding, "It’s truly horrific how many people are negatively impacted by it."
-Former State Assembly Speaker and San Francisco Mayor Willie Brown said the law made him want to "picket" against the "bastards" at the Capitol and the special interests that "took advantage" of them.
-Andrew Cuomo rejected a similar law in New York, saying he didn’t want to "make the same mistake" as California.
-The Daily Kos warned other states, "Don’t make the mistake California’s Gavin Newsom did," with the site’s founder calling the law "disastrous" and "asinine" and its supporters "shameful."
-The head of the California NAACP assailed AB 5 as a "terrible law" and a "gut punch to our community."
-The CEO of the Black Chamber of Commerce called it a "catastrophe" responsible for "enabling, defending, and propagating systemic racism."
-Two hundred Ph.D. economists reported the law is "doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them."
Yet Biden campaigned on a promise of imposing a new federal standard "modeled" on California's AB 5. He has now done just that, and has even elevated the architect of AB 5, Julie Su, to carry out this attack on the right to earn a living as ruthlessly as possible.
The Independent Contractor Rule was recorded in the federal register on January 10, 2024, and is scheduled to take effect on March 10, 2024. It is 339 pages of essentially the Department of Labor justifying why independent contractors should not be allowed to exist. The rule acts from the premise that independent contractors have no right to determine whether they are independent or an employee. It is the DOL's job to do that for you.
The Biden administration has used court precedent to expand on these, creating six overarching factors in a “totality of the circumstances” which will be analyzed to determine, as a matter of economic reality, whether professionals are dependent on the potential employer for work or in business for themselves.
The term "economic reality" appears 345 times within the Rule as one of the means to deny an independent contractor their right to earn money as they choose. It's positively chilling, and if Americans refused to pay attention when California independent professionals raised the alarm on AB5, then they very well need to pay attention now. The independent contractor community, particularly the California professionals who were adversely affected by AB5, once again sounded the alarm and expressed their determination to see this rule divested.
In an attempt to quell the flow of outraged comments, Acting Secretary Julie Su issued this anemic post. But Su's attempts at gaslighting fell flat.