Protecting Jobs and
The concept of working as an independent contractor has been around for centuries. In recent years, new technology has given millions of Americans the opportunity to earn money, work flexible hours and be their own boss through independent contracting. Military spouses, transitioning service members, stay at home parents, and people just looking to earn a few extra dollars have all benefited from this type of work—not to mention the millions of consumers who are able to purchase all manner of services right from their phone.
More traditional businesses like insurance, transportation, logistics, technology, and journalism also use the independent contractor model to one degree or another. The fact is that the “traditional” employment model, where your employer tells you where, when, and how to work just doesn’t fit every worker, or every business.
Unfortunately, some states are looking to pass new restrictions on independent contracting. Through laws like AB-5 in California, legislators are threatening to close off the opportunities offered by independent contracting, and smother new business models that benefit workers and consumers.
The U.S. Chamber of Commerce is committed to protecting the opportunities offered by flexible employment models. Lean more about our work on this issue below.
In 2019, the California legislature passed A.B. 5, a bill that dramatically curtails the use of independent contractors in the state. A.B. 5 establishes a three-factor “ABC” test to determine whether someone is an employee, or an independent contractor. Predictably, the law has upended many successful business models and cost some workers their jobs.
California’s AB 5 has taken another life: The new law has now killed off the 40-year old Lake Tahoe Music Festival.
This legislative session, the Virginia State Legislature has taken up numerous pieces of legislation dealing with worker classification, in other words, when a worker should be considered an employee or an independent contractor.