Doctor's Orders

U.S. Senator Bill Cassidy, who chairs the committee that handles independent-contractor legislation, just laid out his policy vision.

Last week, U.S. Senator Bill Cassidy, R-Louisiana, released a white paper that lays out his thinking about independent-contractor policy going forward.

The fact that Cassidy spoke out in such a detailed way is significant because he is chairman of the Health, Education, Labor & Pensions Committee. That’s the committee in the U.S. Senate where action on independent-contractor policy typically takes place.

Now, if you had only read the title of Cassidy’s white paper—and if you know his background of working as a physician prior to becoming a lawmaker—then you might think this document was specific to legislation that could give independent contractors better access to benefits:

Read on, because there’s very much more here.

Cassidy has long been a defender and protector of independent contractors, so much so that in 2024, he led the effort in the U.S. Senate to try and overturn the Biden-Harris administration’s independent-contractor rule. Cassidy was trying to protect millions of self-employed Americans from the possibility of being reclassified as unionizable employees.

Cassidy was as clear as day in explaining his thinking about independent contractors in 2024, too:

“Independent contractors, or freelancers, are shielded from forced or coerced unionization that would strip their flexibility away. This has made eliminating freelancing a top priority for large labor unions who want more workers paying forced union dues. This is yet another example of the Biden administration prioritizing unions over Americans who choose to earn a living without participating in a union.”

In his new white paper, Cassidy discusses the current policy mess with independent-contractor classification. He points out that, according to the Government Accountability Office, at least seven federal agencies use “varied terms” to describe independent workers.

Cassidy also writes about the use of “several complex multi-factor tests” to determine independent-contractor status—a situation that a former head of the U.S. Department of Labor’s Wage and Hour Division said was contributing to “madness,” during testimony last month before the U.S. House Subcommittee on Workforce Protections.

And, in his white paper, Cassidy specifically calls out the ABC Test that all kinds of independent contractors have decried ever since California instituted a version of it as Assembly Bill 5 in 2019. Cassidy cites research from early this year by economist Liya Palagashvili that showed “in nine states where [the ABC Test] has been implemented, self-employment fell by 6.43 percent, W-2 employment decreased 4.73 percent, and overall employment fell 4.79 percent.”

Cassidy goes on to write that during the Biden-Harris administration, both the U.S. Labor Department and National Labor Relations Board “sought to imitate the ABC test’s practical effect: DOL through rulemaking, and the NLRB through its decision in Atlanta Opera, Inc. Each standard is sufficiently vague to necessitate guesswork in determining worker status, leaving workers and employers uncertain as to where they stand.”

The current state of play, as Senator Cassidy lays it out, is at odds with this basic truth: “People are entitled to know the legal rules before they act.”

He writes:

“Not only do workers and companies have the right to know what the law is, such certainty would encourage companies to provide independent workers benefits by taking the guesswork out of determining when a worker is an employee or independent worker. Yet recent independent contractor tests promulgated by executive agencies allow different courts to look at the same facts and come to separate conclusions about employment status. The impetus for such vague tests is often the presumption that all workers desire to be employees. This is simply not true. Other proponents of these tests view employee status as superior to independent work and would like to reclassify independent workers as employees, regardless of what workers themselves want.”

He’s right about that. Less than six months ago, the U.S. Bureau of Labor Statistics yet again released research showing that 80% of independent contractors “overwhelmingly preferred their work arrangement.”

Cassidy is also right about this:

Cassidy writes:

“Workers and firms would benefit from a single statutorily-defined test determining employment status. Such a test may be based on the common-law test, which is frequently used by courts to determine employment status. Implementing a common-law test would also improve stability and consistency across federal and state jurisdictions. Alternatively, Congress may consider an approach similar to the Trump administration’s 2021 rule. The two-factor test likewise encourages consistency in its application, aligns with well-established legal principles and, unlike the Biden rule, does not run afoul of companies’ safety, health, and tax obligations.”

This is precisely what many independent contractors in the movement to stop freelance busting—including me—have been saying for years now. It’s exactly what we’ve been asking the government to do, to protect our freedom to earn income as our own bosses.

And it is, thankfully, what the U.S. House of Representatives just started working toward achieving, with Cassidy standing ready to serve as their legislative partner in the U.S. Senate.

The Modern Worker Empowerment Act

Back in February, Congressman Kevin Kiley, R-California, introduced the Modern Worker Empowerment Act in the House of Representatives. This bill, known as H.R. 1319, would amend current federal laws to establish a clear and predictable test for determining whether a worker is classified as an independent contractor or an employee.

Simultaneously, Kiley introduced the Modern Worker Security Act, which would do the other thing that Cassidy writes about in his white paper: establish a federal safe harbor that allows companies to voluntarily provide portable benefits to independent contractors without the risk of federal agencies reclassifying those workers as employees.

When he introduced these bills in the House, Kiley wrote:

“California’s disastrous AB 5 law wreaked havoc on independent workers, stripping them of their ability to work on their own terms and forcing businesses to cut off contractor relationships. Shifting federal regulations threaten to impose similar uncertainty nationwide, putting millions of workers at risk. By codifying both these protections into law, we prevent future administrations from undermining independent workers and provide businesses with the confidence to fully engage with a modern, flexible workforce.”

Cassidy’s newly released white paper is as clear a signal as possible that the leaders on independent-contractor policy in the U.S. Senate and House are completely aligned about what needs to happen next.

And, this white paper follows action from the Trump administration signaling that it, too, is preparing to take steps in this same direction, to protect independent contractors nationwide.

I continue to urge everyone who wishes to preserve the choice of self-employment for all Americans to help these people in Washington who are trying to help us.

Contact your two U.S. senators and your member of the House of Representatives. Ask them to co-sponsor the Modern Worker Empowerment Act and get it signed into law. Make sure they understand that since the day the United States was founded, we have all had the freedom to hang out a shingle and go into business for ourselves—a freedom that must be protected against continuing threats.

And, yes, we can all now also tell them that there’s yet another reason they should establish this protection as quickly as possible.

It’s officially doctor’s orders.