New coalition is focused on fighting new Labor Department independent contractor rule

On March 11, a new rule from the Department of Labor goes into effect. Detractors say it will wreak havoc on independent business owners and freelancers throughout the country.

The rule creates new requirements for defining who is and isn’t an independent worker. As a result, countless independent workers will be redefined as employees overnight — even if it’s not what these workers want.

“Save Independent Work,” a coalition of independent workers and advocacy groups, announced its new campaign to overturn the rule that would reclassify hundreds of thousands of independent workers, including independent business owners and freelancers, as employees.

The campaign launch comes just as Sen. Bill Cassidy, R-La., and Rep. Kevin Kiley R-Calif., introduced a joint resolution under the Congressional Review Act (CRA) that seeks to stop the implementation of the Department of Labor’s new rule targeted at independent workers.

The law was so unpopular that people from dozens of industries—including real-estate appraisers, photographers, translators and recording artists—  pushed for amendments that would allow them to operate outside of the law, maintaining their independent worker status.

The coalition, which includes the California Business and Industrial Alliance (CABIA), Freelancers Against AB5 and the Commonwealth Foundation, aims to highlight the damaging impact that this new rule would have on independent workers and small businesses.

Key arguments are detailed on SaveIndependentWork.org. The organization has produced an animated explainer video, begun a letter-writing campaign to key members of Congress and solicited testimonials from independent business owners across the nation.

The coalition says it is working to emphasize that reclassifying independent workers against their will has already backfired in California. That’s because of California Assembly Bill 5 (AB5), which threatened to make it essentially impossible to operate as an independent business owner or freelancer in California.

There have been ramifications for large trucking fleets that operate in the Golden State. Some have stopped using owner-operators altogether. Others have insisted their owner-operators be domiciled elsewhere, typically Nevada.

“More than 350,000 truckers choose to work as independent contractors because of the economic opportunity it creates and the flexibility it provides, enabling them to run their own business and choose their own hours and routes,” American Trucking Associations (ATA) President and CEO Chris Spear said in a statement. 

“The Biden Administration’s IC rule eliminates this freedom and intentionally undermines the livelihoods of truckers and their families across the country by replacing a clear, straight-forward standard with a tangled mess that will weaken our supply chain,” Spear added.

The trucking industry has relied on independent contractors since the inception of interstate trucking. Court decisions over the last nine decades have continually reaffirmed the legitimate role independent contractors play in the economy. That freedom of choice has been an enormous source of empowerment for women, minorities and immigrants pursuing the American Dream.

In 2021, DOL issued a rule supported by ATA clarifying the definition of employee under the Fair Labor Standards Act as it relates to independent contractors. The department’s new rule, which ATA has sharply criticized, replaces the 2021 standard with an opaque and deliberately confusing standard designed to fuel frivolous litigation and deny self-employed individuals the freedom of choice to work as independent contractors. 

This week, ATA joined a broad coalition of organizations in filing a lawsuit challenging the rule.

The rule was crafted under the leadership of Acting Secretary of Labor Julie Su, who has repeatedly failed to recognize the importance of independent contractors and implemented California’s disastrous AB5. The ATA remains staunchly opposed to Su’s nomination to serve as secretary of labor.

“Had Julie Su actually spoken with drivers—not just big labor bosses—she would know this firsthand,” Spear said. “The ATA stands firmly behind Representative Kiley and Senator Cassidy's effort to defeat this ill-advised rule, and we will continue to work alongside them and other members of Congress to protect Americans’ right to earn a living in the way that they choose.”

“AB5 destroyed the careers of hundreds of thousands of independent contractors in California in more than 600 categories of professions, from therapists and pharmacists to tutors and translators,” Karen Anderson, founder of Freelancers Against AB5, said in a statement.

“Now, the DOL seeks to force the same horrible consequences on independent professionals across the nation — reclassifying them against their will. Our coalition will do everything possible to protect self-employed Americans from this threat to their livelihoods,” Anderson added.

Tom Manzo, President and Founder of the California Business and Industrial Alliance (CABIA), underscored the impact that this rule would have on small businesses.

“The American Dream is rooted in the ability to choose your own path and profession. This new rule seeks to rob freelancers and independent workers of that choice, forcing them to operate as employees,” Manzo said in a statement.

“This also places an undue burden on small business owners who may not be able to accommodate the costs of additional full-time staff. Thanks to this rule, everyone stands to suffer,” Manzo added.