Congress Bill HR2474 is innocuously labeled Protecting the Rights to Organize Act of 2019. In fact, it appears to be so harmless that you might be tempted to ignore it. The truth is that this bill is a national version of AB-5 that is causing real financial harm to independent contractors in California. The goal of this bill is to “amend the National Labor Relations Act, the Labor Management Relations Act, 1947, and the Labor-Management Reporting and Disclosure Act of 1959, and for other purposes.” It was sponsored and introduced into congress by Rep. Scott, Robert C. "Bobby" [D-VA-3] on 05/02.2019, and placed on the Union calender on 12/16/2019. So far, this bill has only been introduced. In order to become law, it must pass the House (It passed the House on 2/6/2020), pass the Senate, be brought to the attention of the President and signed into law.
Protecting the Rights to Organize Act of 2019 (H.R.2474)
While everyone has been hyper-focused on AB-5, which affects independent contractors in CA and independent contractors that do business with companies in California on a contracted basis, this bill has been quietly sitting in Congress. The bottom line is that if this monster gets passed, moving out of California won’t save your freelancing business.
The Concerning Definitions in HR2474
HR2474 starts off with highly concerning definitions, including definitions for Joint Employer and Employee. The below text is taken straight from Sec. 2. AMENDMENTS TO THE NATIONAL LABOR RELATIONS ACT.
(1) JOINT EMPLOYER.—Section 2(2) of the National Labor Relations Act (29 U.S.C. 152(2)) is amended by adding at the end the following: “Two or more persons shall be employers with respect to an employee if each such person codetermines or shares control over the employee’s essential terms and conditions of employment. In determining whether such control exists, the Board or a court of competent jurisdiction shall consider as relevant direct control and indirect control over such terms and conditions, reserved authority to control such terms and conditions, and control over such terms and conditions exercised by a person in fact: Provided, That nothing herein precludes a finding that indirect or reserved control standing alone can be sufficient given specific facts and circumstances.”.
(2) EMPLOYEE.—Section 2(3) of the National Labor Relations Act (29 U.S.C. 152(3)) is amended by adding at the end the following: “An individual performing any service shall be considered an employee (except as provided in the previous sentence) and not an independent contractor…
The A,B,C Test in HR 2474
(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact;
(B) the service is performed outside the usual course of the business of the employer; and
(C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”.
If the ABC test in HR2474 looks familiar, that’s because it is. It’s almost a direct copy from the ABC test in AB5, which states:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Are There any Exclusions in HR2474?
Not that I found, which makes this bill potentially far more dangerous than the bill that was passed in CA. CA’s AB-5 allows freelancers and independent contractors to perform 35 jobs before they must be hired on as (part time) employees or essentially fired by the client. The AB-5 language states: “Services provided by a still photographer or photojournalist who do not license content submissions to the putative employer more than 35 times per year. “ and “Services provided by a freelance writer, editor, or newspaper cartoonist who does not provide content submissions to the putative employer more than 35 times per year. Items of content produced on a recurring basis related to a general topic shall be considered separate submissions for purposes of calculating the 35 times per year. For purposes of this clause, a “submission” is one or more items or forms of content by a freelance journalist that: (I) pertains to a specific event or topic; (II) is provided for in a contract that defines the scope of the work; (III) is accepted by the publication or company and published or posted for sale.” There’s more to the AB-5 exclusions and limitations, but it’s the 35 piece limit that is causing an uproar and threatening to destroy independent contractor’s livelihoods. Since the limitations and exclusions aren't present in HR2474, defiing how much work can be done is impossible to determine, which is what makes this so dangerous to livelihoods. It could be 0 or unlimited. The application of this law once it is passed is simply up in the air.
HR2474 goes on to explain and adjust union relations, strikes, contracts, litigations and mediations and adjustments to the Prevention of Unfair labor Practices, which were all already on the books, and those laws, regulations, etc are referenced in HR2474.
If you think AB-5 is bad, imagine not being able to work and losing your business the minute this thing potentially passes Congress and is signed into law. Is it possible? I would think so. However, one could also argue that this is a draft version and will be ammended and adjusted as it moves through the House and Senate.
What's the Working Theory for the Reason for This Bill and Other Bills Like it?
Due to the language in HR2474, it's led many to believe that this bill is being covertly sponsored by unions. This is unsubstantiated hearsay and speculation. No one has come out and said - yes my union is for this, or yes, I've been handed a huge kickback by a union to support this bill. Not that I would expect anyone to come out and say such things. With that in mind, you may be wondering why unions would support such a bill. Well, if all these independent contractors got hired on by companies that have unions, these independent contractors would be forced to join th eunion, abide by the union laws and bylaws and pay dues. Essentially, the theory is that this is a money grab and power-play by unions.