They Have Learned Nothing

New Jersey Democrats tried, and failed, to pass freelance-busting legislation in 2019-20. They're at it again now with bureaucratic rule-making.

This must be how a kindergarten teacher feels when a recalcitrant 5-year-old keeps eating the paste and making himself sick.

I can’t think of any other way to describe my reaction when I saw this news from Democratic Party leadership in my home state of New Jersey this week:

It appears that Governor Phil Murphy is preparing to follow in the politically disastrous footsteps of President Joe Biden, with predictably awful results that could hurt Democrats who will be on the ballot all across New Jersey in this fall’s statewide elections.

President Biden strongly backed a bill in Congress that threatened the livelihoods of millions of independent contractors, in a deeply misguided effort to turn us into unionizable employees. This bill was a gift to unionist campaign supporters, and a direct attack against people who choose to be our own bosses—targeting self-employed people who are protected by law from union organizers, and who contribute more than $1 trillion each year to the U.S. economy.

After that freelance-busting bill failed because a few reasonable, moderate Democrats joined with Republicans in the U.S. Senate to stop it, Biden then tried to use the U.S. Labor Department to threaten self-employed people’s livelihoods through bureaucratic rule-making.

The result was independent contractors from multiple industries—including freelance writers like me from New Jersey—suing the federal government, testifying before Congress about the need to protect our livelihoods, and working now with Republicans in control of the White House and Congress to pass the Modern Worker Empowerment Act so these kinds of attacks against our income and careers can’t ever happen again at the federal level.

To any rational person, this situation is clear-cut. Attacking independent contractors is a losing proposition. It’s horrible for the economy. It ignores the will of the people. It has only added to the Democratic Party’s all-time favorability lows.

And yet, here in New Jersey, the Democrats demonstrated this week that they have learned nothing. It’s as if the people who ran into a wall and knocked themselves unconscious in Washington, D.C., have gotten up, stumbled dizzily back into the Garden State, and decided it’s a good idea to try ramming their heads at full force into the wall again.

Just as Democrats in Washington, D.C., tried and failed to pass a freelance-busting bill, Democrats in Trenton tried and failed too, back in 2019-20. And just as we saw at the federal level, the result in New Jersey was also widespread outrage. Op-eds blanketed the statewide, regional and national press. There was a standing-room only hearing that went on for more than four hours at the New Jersey Statehouse—almost entirely composed of angry voters telling Democrats to stop.

The New Jersey bill ultimately failed to pass because, just as had happened in Washington, a handful of reasonable, moderate Democrats in Trenton joined with Republicans to protect self-employed people and the economy.

After that, just as Democrats got walloped in the recent federal election, the New Jersey bill’s primary sponsor, Steve Sweeney—the state’s highest-ranking graduate of the New Jersey AFL-CIO Labor Candidates School—got walloped at the ballot box too. He lost his job as state Senate president when voters disgusted about this and other issues replaced him with a truck driver from the furniture store Raymour & Flanigan.

This week’s announcement from Trenton signals that the Democrats, having tried and failed to attack independent contractors with legislation, now intend to use the New Jersey Department of Labor the same way President Biden tried to use the U.S. Department of Labor—as a bureaucratic workaround to threaten our livelihoods all over again.

Yes, this failure to learn from past mistakes is astonishing.

But even more astonishing is that Democrats in Trenton are positioning themselves to wreck the income and careers of self-employed New Jerseyans in a statewide election year. When an increasing number of people already fear a recession. When the electorate across the Garden State is already leaning more toward Republicans. And when the top Republican contender for governor, Jack Ciattarelli, is already a strong supporter of independent contractors. He made Freedom to Freelance part of his campaign the last time around, and he can easily do so again now.

Do the unbelievably simple math:

• Number of independent earners in the state of New Jersey? Nearly 1.7 million, according to a 2023 report by the American Action Forum.

• Number of votes that Ciattarelli lost the gubernatorial election by in 2021? Less than 85,000, according to Politico.

The freedom to choose self-employment is an issue that crosses all ages and demographics—and that especially affects women and minorities. Want to talk about the youth vote in particular? Almost 70% of Gen Z is actively freelancing or plans to do so in the future.

This week’s article states that we’ll all get a look at the New Jersey Department of Labor’s proposed rule on May 5. So to be fair, none of us have seen the official language yet.

But given the characterization of the proposed rule in the article, as well as the comments in that article by state Labor Commissioner Robert Asaro-Angelo, the Democrats are positioning themselves once again to unleash a grenade of policy and political suicide.

Here’s a detailed explanation of why, based on what we’ve seen and learned about this kind of freelance busting in the years since Democrats in Trenton tried to attack independent contractors back in 2019-20.

The Policy Specifics

The independent-contractor policy that Democrats keep trying to ram through nationwide is the California version of regulatory language known as the ABC Test. It’s a test that regulators can use to determine who is a unionizable employee, and who is an independent contractor. This determination can affect all kinds of things, such as eligibility for unemployment insurance and the freedom to choose when and where you work.

New Jersey currently has a different version of this ABC Test on the books. The California version is edited in a way that weaponizes it to destroy the livelihoods of legitimate—and often thriving—independent contractors.

That’s why so many of us fought to stop the California version from becoming New Jersey law back in 2019-20, and why we urged lawmakers to switch our state to a more reasonable test altogether, so the current version in New Jersey could not be weaponized against us.

Even some of the most progressive Democrats in the country know that this California ABC Test is disastrous for legitimately self-employed people. Back in 2021, Markos Moulitsas, co-founder of the progressive site Daily Kos, raised his voice loudly alongside mine, trying to warn the party about the damage it was going to cause by pushing this regulatory language.

Moulitsas wrote:

“[T]he harm is real. I’ve written before (here and here) about how the same type of legislation in California decimated the state’s freelancers, artists, theater troupes, musicians, video producers, and many other industries that rely on gig workers—the traditional kind.

“I invited Kim Kavin, a freelancer-rights activist well-versed in the issue, to talk about why the current ‘ABC’ test is so deadly to freelancers, and how simply switching to the IRS test would resolve that community’s concerns.”

In the years since California’s ABC Test law went into effect in 2020 and Moulitsas wrote those words in 2021, these are just some of the things that have happened:

• Independent contractors in California identified more than 600 affected professions, as wide-ranging as 3D animators, animal trainers, court reporters, forensic nurses, IT techs, physical therapists and yoga instructors. The sheer quantity of professions that freelance busting harms is truly staggering. Listen as Congressman Kevin Kiley, R-Calif., reads it on the floor of the U.S. House of Representatives:

• The California Legislature had to go back and pass a cleanup bill, ultimately exempting more than 100 professions from its ABC Test law less than a year after it went into effect, just so people could continue to earn a living.

• California’s voters, also within a year of the freelance-busting bill taking effect, rebuked lawmakers at the ballot box by a nearly 60-40 margin, passing a proposition that exempted yet another occupation: rideshare and delivery drivers.

• Former California Assembly speaker Willie Brown—a prominent Democrat—got into a public row with Governor Gavin Newsom after the freelance-busting law almost cost Brown his column at the San Francisco Chronicle. Politico reported Brown saying this about the freelance-busting law: “If there was a place to picket organized labor, I’d do it today. If there was a place to picket a legislator, I’d do it.”

• Economists at the Mercatus Center released a report showing that the freelance-busting law was, well, a job killer. Their findings showed that self-employment decreased by 10.5% for affected occupations after California’s ABC Test law went into effect and overall employment decreased by 4.4%.

• In direct contradiction to what Governor Newsom claimed when he signed California’s ABC Test into law—that the law would be a step toward “creating pathways for more workers to join a union”—union membership as a percentage of all employed people actually went down in California after the law took effect.

• California state-level Republican lawmakers introduced the Freedom to Work Act, specifically to try and reverse “the negative impacts” of the ABC Test law.

• California Congressman Kiley led the charge—and is still leading it—in the U.S. House of Representatives to try and make sure this kind of policy madness doesn’t spread from California into the federal government.

• Congress invited California freelance advocate Karen Anderson, along with me from New Jersey, to testify about how horrible this kind of policymaking is.

• A state-level California Republican called for a U.S. Justice Department investigation into what he calls “discrimination” that the ABC Test law caused, stating: “Every Californian who believes in justice and equality under the law should be outraged by the unfair treatment of Vietnamese-Americans working in the beauty industry. We cannot wait for politicians in Sacramento to fix this issue. That’s why I’ve called on the U.S. Justice Department to intervene.”

• Organizations representing truckers sued the state of California, and are still fighting in the courts today on behalf of owner-operator drivers, trying to make sure these drivers can operate legally in California as a critical part of the supply chain.

• Members of the California Advisory Committee to the U.S. Commission on Civil Rights released a report about testimony the committee heard regarding the ABC Test law’s impact on marginalized communities. That report ends by warning other states to “avoid some of the pitfalls that California fell into, including rushing into the adoption of the ABC test.”

Despite all of this evidence about the real-world harm that this kind of ABC Test policymaking causes to legitimately self-employed people, the announcement this week from New Jersey’s Labor Department is that it plans to codify its interpretation of the ABC Test for independent contractor status under the state’s unemployment, wage and hour, wage payment and other laws.

Based on what the article states, this interpretation likely would affect all kinds of professions—including thriving, six-figure independent contractors all across the Garden State.

The article makes no mention of any of the exemptions that California ultimately ended up with, to at least partially protect independent contractors who work as marketers, travel agents, graphic designers, grant writers, photographers, videographers, appraisers, home inspectors…

What’s Really Happening

Here’s how state Labor Commissioner Robert Asaro-Angelo tried to sell this announcement about the ABC Test in the New Jersey media this week:

“The work being done in New Jersey to combat worker misclassification is a testament to our state’s commitment to justice. This rule proposal is a critical step in providing clear, reliable guidance to employers to help them comply with the law and prevent the illegal misclassification of employees. Not only would these new rules protect workers’ rights, but they would also ensure that bona fide independent contractors understand what makes them independent contractors, rather than employees, so that they can continue to operate with autonomy.”

All the evidence from California shows that Asaro-Angelo’s claim is an outright lie.

Which really should be no surprise, given that Asaro-Angelo has previously used his position as New Jersey’s labor commissioner to push false unionist talking points against independent contractors.

“Bona fide independent contractors” are not confused about what’s really happening here. We’ve written U.S. Supreme Court and other briefs about it. We’ve testified before Congress and numerous state legislatures about it.

Nobody—in all the years that this freelance-busting war has been waged nationwide—has ever said it’s OK for people who are rightful employees to be misclassified as independent contractors. Everybody agrees that misclassification is wrong. If you should be getting benefits as an employee and a company calls you an independent contractor, then the company should be held accountable.

What we are saying—and what Democrats like Governor Murphy keep ignoring—is that it’s equally wrong to weaponize classification tests in ways that misclassify legitimate independent contractors as employees.

Here’s a clip of me saying exactly that, directly to the top-ranking Democrat in the hearing room, during my 2023 testimony on Capitol Hill:

Countless bona fide independent contractors lost their income and careers in California because of this ABC Test. What happened was precisely what California’s nonpartisan Legislative Analyst’s Office predicted would occur. This very real threat to people’s livelihoods is why, in New Jersey, ever since the attempts to copy the California law began in 2019, we’ve seen everyone from real-estate agents to golf caddies trying to get New Jersey’s laws changed to protect them from further attempts to strip away their independent contractor status.

What the New Jersey Department of Labor announced this week isn’t about protecting our rights. It’s about trying to take away our right to be our own bosses.

It’s also not about stopping the misclassification of people who should rightfully be employees. The U.S. Labor Department, under President Biden’s direction, actually revealed that the Democratic Party has been making wildly exaggerated claims about the prevalence of misclassification. Governor Murphy’s own task force misclassification report here in New Jersey outright lied about the prevalence of misclassification from the very start back in 2019, in its first two sentences:

“Misclassification is the practice of illegally and improperly classifying workers as independent contractors, rather than employees. This practice has increased by approximately 40% in the last ten years, and is a growing problem in New Jersey (and other states).”

The footnote at the end of those first two sentences cites this article, whose author actually wrote this:

“The use of independent contracting has grown dramatically over the past decade, with one estimate suggesting it has increased by almost 40%…”

Yeah. Really.

The actual problem that Murphy and Asaro-Angelo are trying to solve—and that the Democratic Party nationwide is trying to solve—is that while unions overwhelmingly support Democratic candidates, the number of union members who pay dues to help fund those political campaigns is at an all-time low. And most employees who are already eligible to join unions do not want any part of them:

We are supposed to have government of, by and for the people. All the people. Not government of, by and for the union organizers.

The will that independent contractors have to keep our legal status is strong. Some 80% of independent contractors tell the U.S. Bureau of Labor Statistics that we prefer to earn a living this way. Only 10% of freelancers say they want to return to traditional employment.

Having the ability to be our own bosses isn’t just about how we earn a living. It’s about our nation’s promise of liberty and the pursuit of happiness. It’s about who we are as Americans in our bones.

Many, many of us have been fighting to defeat this kind of freelance busting all across the country for years now. We will fight to defeat it again in New Jersey too.

Our message remains simple: We all have the freedom to earn a living in the way that works best for us.

Nobody should be able to take that freedom away.