“If you’re a bad-apple contractor, we’re either going to bring you into compliance, or we’re going to put you out of business.” – Gov. Phil Murphy
New Jersey Gov. Phil Murphy and Pennsylvania Gov. Josh Shapiro have joined together with a new interstate task force to address worker misclassification. While they aim to protect workers and ensure accurate tax collection, they must recognize the danger of limiting genuine independent contractors’ rights or flexibility. Misclassification can have negative consequences, but an overzealous crackdown may unintentionally hurt those who thrive as self-employed professionals.
Meanwhile in Michigan, a 16-bill package aiming to redefine independent contractors using the restrictive “ABC” test, increase wage transparency, and limit the use of non-compete clauses is being considered by the House Labor Committee. The “ABC” test restricts opportunities for individuals who choose and rely on the flexible work arrangement independent work allows. The delivery industry thrives on the benefits and autonomy provided by independent contractors, and overregulation will hinder growth and innovation.
These bills and legislative pursuits narrow workers choice to operate independently and stem from a false narrative that independent contractors are victims. Tom Lutz with the Michigan Regional Council of Carpenters and Millwrights refers to “legitimate independent contractors” as none other than a code word for an “exploited employee”. What restrictive legislatures fail to realize is, the supposed “bad-apple contractors” going to be “put out of business” are the millions of hard-working contractors pursuing their own goals with their independent business.