Employee Rights Act Would Protect Hardworking Latinos & Expand Freedom for All American Workers
Like everyone else, the Latino community is suffering under waves of economic hardship brought about by the continuing effects of the COVID-pandemic, supply chain disruption, and rising inflation.
Compared to a year ago, the consumer price index is up 8.5 percent, food prices are up 8.8 percent, and gasoline prices have soared through the roof. According to the Bureau of Labor Statistics, the Latino unemployment rate is 4.2 percent. In contrast, the national rate is at 3.6 percent.
It’s obvious that we’re going through some rough times right now. And it’s evident we need to reform the rules and regulations that are restricting workers’ abilities to take care of their families.
The economy has been evolving rapidly, with numerous jobs and careers that didn’t exist even ten years ago now employing tens of thousands of people. The economic disruption brought about by COVID has only accelerated this trend. It is essential that workers and businesses alike are flexible enough to adjust to rapidly changing technological and social trends.
Millions of Americans have found this flexibility by working as independent contractors in numerous fields, ranging from sharing-economy gigs, such as ride-sharing and short-term rentals, to freelance graphic design. But as is often the case, government rules and regulations are lagging far behind market developments, which potentially threatens to derail millions of people’s livelihoods.
Fortunately, the recently introduced Employee Rights Act (ERA) works to update the federal code and ensure that workers and their independence are protected from both the grinding wheels of confused bureaucracy and the machinations of organized labor that seeks to curtail this freedom in order to classify freelancers as employees, railroad them into unions, and then fund their political operations through legislation like the Protecting the Right to Organize Act.
Currently, there are differing definitions of what exactly an employee is across the federal regulatory bureaucracy. Rather than complicating things for businesses that hire contractors, the ERA simplifies the process by having the entire federal government adopt the “common law” test that is currently used by the Internal Revenue Service.
The ERA also clarifies that the federal government’s joint employer standards allow businesses to utilize the franchising and vending model, protecting the livelihood of hundreds of thousands of workers from attempts to blow up these business models.
These concerns about protecting independent contractors and small businesses are especially acute for Latinos around the country. Contract workers are 22 percent more likely to be Latino, and nearly a third of all construction workers, whose employers themselves are usually classified as independent contractors, are Latino as well.
What’s more, a full quarter of all business in America are owned by Latinos and are obviously quite bound up in regulations concerning the use of contractors.
Unfortunately, just as the need for the flexibility is becoming all the more clear, there are efforts underway to try and corral these workers back into traditional employer-employee relations, even when both parties would rather continue the relationship as it is. The precursor to the federal PRO Act was California Assembly Bill 5. This legislation wreaked havoc among freelancers in California by putting onerous restrictions on who was classified as a freelancer or an employee. While this legislation, in-part, stemmed from a good-willed attempt to provide freelancers with the same benefits as employees, its results were disastrous.
California free-lancers were literally black-listed around the country as firms decided that the onerous regulations made it too risky to hire them. Rather than receiving health care benefits, many freelancers simply found themselves without any clients and out of work.
Equally concerning, economist Peter St. Onge reports that the job losses from mandatory benefit schemes inevitably fall hardest on low-income workers.
The PRO Act, would radically transform labor law by eliminating right-to-work legislation and making it easier for workers, freelance and otherwise, to be cajoled and intimidated into unions. In contrast, the ERA provides more protections to workers everywhere by protecting worker privacy, ensuring secret ballots, and giving workers the ability to control whether their dues are used for political purposes. Were the PRO Act to become law, the results would be catastrophic for independent workers everywhere, but especially to Latinos. The LIBRE Initiative supports the ERA and its efforts at protecting American workers from anti-choice legislation like the PRO Act and ensuring that they have the flexibility to succeed in today’s rapidly evolving economy.
Daniel Garza is president of The LIBRE Initiative.
