Everything Freelancers Need to Know About the PRO ActBy Jordan Teicher March 11th, 2021
This week, the House of Representatives passed the PRO Act, a landmark labor rights bill that could transform the way U.S. businesses classify workers, particularly independent contractors and freelancers.
The bill slid under the public radar last month while the government focused on the vaccine rollout and the COVID-19 stimulus package, but it’s about to take center stage as it heads to the Senate. Like most political issues, the PRO Act has a lot of nuances that don’t split evenly down party lines.
Here’s what freelancers need to know.
What is the PRO Act?
The PRO Act is short for the Protecting the Right to Organize Act. It’s a labor rights bill sponsored by Rep. Bobby Scott (D-VA-3) that was originally introduced to the U.S. House of Representatives in May 2019. Last year, Democrats shelved the bill after it stalled in the Senate. But once the Senate flipped and President Biden was inaugurated, lawmakers reintroduced it in February 2021.
The PRO Act fuses together two major labor issues:
- What classifies workers as employees versus independent contractors
- The ability for workers to organize unions, strike, and receive benefits
Because of its broad mandate, the policy has potential to impact the livelihoods of millions of professionals from freelance creatives to construction workers to small business owners and many more.
The PRO Act has become controversial, especially in the freelance community, because of the ABC test, which provides legal guidelines for how businesses determine if someone is a traditional employee or independent contractor. According to the bill, a person must satisfy all of the following criteria to qualify as an independent contractor:
- 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.
- The service is performed outside the usual course of the business of the employer.
- 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.
The ABC test dates back to 1935, when Maine introduced it to help determine who deserved unemployment benefits. Today, about half of the U.S. uses the ABC test in some capacity, but how it’s adopted and enforced varies from state to state.
Recently, California put the ABC test under the spotlight as part of its AB5 law. AB5 was designed to provide more rights and protections to drivers for rideshare companies like Uber and Lyft, but that led to a lot of collateral damage for other types of freelancers. (More on this in the next section.)
If passed as currently written, the PRO Act would codify the ABC test under labor law across the country, upending the gig economy as we know it.
How could the PRO Act affect freelance creatives?
If the Senate passes the PRO Act, it could be extremely difficult for freelancers to secure work regardless of where they live.
The key problem comes down to part “B” of the ABC test: The service is performed outside the usual course of the business of the employer.
The language suggests the freelancer should somehow not perform work central to the employer. Many freelancers get work precisely because they help companies with their core business.
Write a freelance blog post for a media company? You fail the test. Design an infographic for a creative brand? Same thing. The narrow constraints only seem to allow someone like a freelance accountant or plumber to sell their services.
To be clear, I believe all workers should be free to unionize—if that’s what they want. In the media world, employees and contractors from high-profile outlets like The New Yorker, Wired, and Wirecutter have been negotiating more rights with their respective employers. The PRO Act could help on that front by ensuring there’s a mediation process, preventing companies from replacing workers on strike, and making it illegal for companies to force employees to attend anti-union meetings.
Lawmakers appear to have good intentions about helping workers and trying to increase wages, but the bill is patched together in a way that could make the cure worse than the disease. It seems misguided to group so many different occupations under the same plan. Bloggers and copywriters are like apples and oranges. But putting writers and Uber drivers together is like comparing apples and frying pans.
So why not detach the ABC test from the PRO Act with an amendment so freelance creatives can control their careers?
We just saw this play out in California. Even before AB5 became law on Jan. 1, 2020, companies like Vox laid off freelance workers to get ahead of the new policy. But protests and complaints intensified right away. At first, California gave companies (and freelancers) a year grace period to get accustomed to the changes. Then, in September, the state passed AB2257, which exempted a long list of jobs including writers, videographers, and illustrators. The revised law also eliminated a rule that freelance journalists could only contribute up to 35 projects per year for a single client.
In 2020, Contently surveyed 573 U.S. freelancers about AB5, and respondents overwhelmingly opposed it:
- 90 percent thought AB5’s limits would negatively affect their lives
- 82 percent oppose a cap on freelance work of any kind
- 75 percent prefer freelancing to full-time work
The last stat hits home. The year before I joined Contently, I worked entirely as a freelance writer, which gave me the freedom to pursue projects that interested me. It was a path I chose to take, and frankly, I wouldn’t be in my position today without freelance experience.
Freelance creatives have always been an essential part of content marketing. They provide skills and abilities that companies don’t always have internally. Freelancers have also raised the creative bar for hundreds of brands that work with Contently, empowering them to create stories in just about every format imaginable. Without that flexibility, both companies and creatives would be worse off.
Now that the PRO Act has made it through the House, it’s on its way to the Senate, where it’s unlikely to receive the 60 votes needed to pass. There’s still time for debate and revisions, and removing the ABC test from the bill could be one way to increase bipartisan support.
It’s worth noting that in our AB5 research, 87 percent of respondents felt lawmakers didn’t understand freelancing enough to regulate it. Only time will tell if they’re able to learn from what happened in California over the last few years and protect the freelance community.Image by denis_pc