An article in the Washington Examiner announced that a new bill was recently introduced in the New Jersey state legislature. Similar to another law in California which will take effect January 2020, this NJ law would redefine many independent contractors as employees.
NFIB’s State Director in New Jersey, Laurie Ehlbeck, highlights the dangers of this law:
“This bill isn’t about just Uber and Lyft. This dangerous legislation ties the hands of every aspiring entrepreneur in the state who owns their own company, including subcontractors with employees who sell their services to another business… if a contractor has his or her own employees, their own equipment, they actively marketed their services, and the business hiring them has no control over their work, they could still be considered an employee if it so happens the work they are doing is within the scope of what the hiring business normally does.”
As the gig economy has boomed, bringing opportunities to entrepreneurial Americans everywhere, laws such as this pose a grave threat to the livelihoods and futures of many Americans. By broadening the scope of the definition for an employee, the bill “would leave a lot of people out of work and without income.”
It’s telling that while the bill is presented as protecting independent contractors, these contractors are not the individuals pushing for the new legislation. Such individuals recognize that their ability to work would be severely limited by the proposed legislation.
For example, the California legislation “outlines limits for contract work, including freelance writers and cartoonists who would only be allowed to submit 35 separate pieces per outlet in a calendar without having to be an employee.” While freelance writers often submit work to different publications, limiting their submissions to only 35 per year is an outrageous limitation. It’s not that the publications will suddenly give them employee benefits, the contract workers will simply be left without work.
Or take Uber and Lyft—these companies have received a lot of attention because they have built their business model on contract work. Both companies provide the opportunity for workers to choose their hours, often adding on to another job in order to have a little more take-home pay or make ends meet.
Laws such as the Californian one and now New Jersey one threaten the work opportunities for countless Americans across the country. Independent contracting provides the opportunity to make a livelihood and limiting independent contractors’ ability to work will severely affect their career and financial prospects. We should celebrate the American entrepreneurial spirit, not prevent it from flourishing.