The issue of “worker misclassification” is becoming key to the Democratic Party’s campaign plans this election year, both at the federal and state levels. Presidential candidates Joe Biden, Pete Buttigieg, Elizabeth Warren and Bernie Sanders all have voiced support for a federal version of California’s recently enacted AB5, which would make everyone an employee until proven otherwise.
The candidates all say the idea is to protect workers against exploitation in the form of misclassification, which happens when a company wrongly calls someone an independent contractor to weasel out of paying the salary and benefits that W2 employees receive.
But empowering misclassified workers is not what laws like California’s AB5 actually do once they’re freed from think tanks and union lobbyists to be set loose in the real world. Since AB5 went into effect on January 1, companies haven’t magically reclassified thousands of workers as full- and part-time W2 employees. Instead, previously happy and thriving independent contractors have been losing their clients and, in some cases, their entire livelihoods overnight.
The reason things aren’t working out the way proponents of the California law planned is the language at its heart—the same language now also in a proposed federal law called the PRO Act. This problematic language is known as the ABC test.