Small Business Owners Say Independent Contractor Restrictions in “PRO Act” Would Devastate Their Industries

Date: August 04, 2021

Small business owners, NFIB fight the “PRO Act” and its independent contractor job restrictions

The Protecting the Right to Organize (PRO) Act of 2021 is a dangerous piece of legislation in Congress that would dramatically upend long-standing employment laws in favor of labor unions at the expense of small businesses and employees. The PRO Act was passed by the U.S. House earlier this year and recently received a hearing in the Health, Education, Labor and Pensions Committee of the U.S. Senate.

NFIB Vice President of Federal Government Relations Kevin Kuhlman said of the PRO Act, “This legislation is filled with destructive employment law changes that will be damaging to Main Street’s fragile economic recovery and create an additional burden for small business owners. Small business owners can’t afford more labor costs and regulations at a time when they are struggling to survive, reopen, and hire.”

Recent NFIB member ballots show that business owners are strongly opposed to the PRO Act, as its many components would be devastating to small businesses. NFIB members spoke out against the legislation in recent meetings with members of Congress during NFIB’s largest annual advocacy event, the 2021 Virtual Fly-In.

“I oppose the PRO Act for a variety of reasons but the worst is its handling of independent contractors like me,” said NFIB member Eric Peterson, owner of a financial advisor practice in Missouri. “Our team is committed to our clients’ best interests and the fiduciary responsibility we have to our clients works best when we’re independent contractors. If we were forced to become W-2 employees it would hurt our clients and our ability to support their best interests without the influence of an employer that dictates sales, products and quotas.”

Ninety-five percent of NFIB members believe small businesses should be able to hire independent contractors to perform tasks essential to their business – something the PRO Act would stop. The PRO Act would apply what’s known as an “ABC Test” to determine if staff should be an independent contractor or employee. The ABC Test questions whether staff are employed in the “usual course of business.” If it becomes law, the PRO Act would upend independent contractor positions like financial advisors, hair stylists, live venue staff, freelancers, and many others who prioritize the freedom and flexibility of “1099” or contract-based work. When California recently implemented a new law including an ABC Test, California lawmakers were immediately forced to carve out dozens of exceptions to preserve businesses and jobs. The PRO Act has no such exceptions.

You can learn more about the PRO Act here, and use our simple Take Action tool to tell your U.S. Senators and Representative your concerns about the PRO Act.

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