09.24.20

Murray, Brown, DeLauro Introduce Landmark Bill Expanding Labor Laws to Protect Workers

(Washington, D.C.) –  Today, U.S. Senator Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Senator Sherrod Brown (D-OH) and Congresswoman Rosa DeLauro (CT-03), Chair of the House Appropriations Subcommittee responsible for funding the Department of Labor, introduced the Worker Flexibility and Small Business Protection Act, a landmark bill that will expand labor laws to protect workers classified as independent contractors and workers at sub-contractors, temporary (temp) agencies, and corporate franchises. Additionally, this legislation will help protect small businesses by putting larger corporations and their CEOs and top shareholders on the hook for worker’s rights violations so that small businesses are not forced to compete with fly-by-night operations that violate workers’ rights to undercut them for business.

 

“If a corporation is profiting off of the labor of a worker, that worker deserves the same protections as any other employee—plain and simple. But as corporations continue to find new ways to evade labor laws, it’s clear we need to update the rules. This legislation will close the loopholes that have allowed corporations to skirt their responsibility to ensure basic workplace rights, and hold them accountable for violating the law,” said Senator Murray. “Especially as the economic impact of this pandemic continues to take a disproportionate toll on workers, particularly workers of color, we must ensure that corporations cannot squeeze workers and steamroll small businesses while raking in record profits. I’m proud to introduce this bill with Senator Brown and Congresswoman DeLauro to help ensure every worker is afforded fundamental rights, protections, and opportunities in the workplace.”

 

“Hard work doesn’t pay off like it should—wages and benefits have declined or stagnated for decades while corporate profits soar because employers increasingly use independent contractor status, temp staffing agencies, franchises, and subcontracting to increase profits and shed responsibility to their workers. These anti-worker policies disproportionately affect Black and brown workers—especially women—and are part of the legacy of systemic discrimination that has exacerbated the racial wealth gap in this country. This legislation will end that race-to-the-bottom business model, protect workers’ rights, and hold employers accountable,” said Senator Brown.

 

“In today’s economy, alternative work arrangements like independent contracting and hiring temporary workers have become common place across several industry sectors, including education, health care, and manufacturing  leaving these workers unprotected and routinely misclassified.  These gig workers are not entitled to minimum wage, sick days, overtime pay, safety protections, unemployment or health insurance, a pension plan, or disability pay.  It is precarious, unstable, unprotected work,” said Representative DeLauro. “This important legislation aims to change that and establish ground rules to stop corporations from abusing and dictating workers’ economic conditions while denying them basic workplace protections. It provides a safety net that can fully and swiftly catch workers in the 21st century economy. I am delighted to join Senators Murray and Brown in introducing this critical bill.”

 

Currently, employees at businesses in the U.S. are protected by labor laws that afford them basic workers’ rights—including the federal minimum wage, the right to organize, workplace health and safety protections, and more—and employers are held legally liable if they violate these laws. However, it has become increasingly common for corporations to restructure their businesses in order to avoid having a legally recognized employment relationship with their workers in order to skirt these responsibilities, thereby ensuring they are not held responsible when they profit from workers’ rights violations. Corporations do this by contracting out essential jobs through subcontractors; temporary (temp) agencies; franchising; or simply classifying their workers as independent contractors.

 

This restructuring of the American workplace touches almost every facet of our economy—from janitors, to security guards, truck drivers, warehouse workers, food workers, housekeepers, and so many more. As workers continue bearing the brunt of the economic impact of this pandemic—and as the Trump Administration continues to release rules eroding protections for workers—it’s clear our labor laws must be updated to better protect them. Senators Murray and Brown, and Congresswoman DeLauro’s bill will finally protect workers against corporate abuses and ensure they get the rights and protections they deserve.   

 

Specifically, this bill will:

  • Strengthen the definition of “employee.” The bill will create a new standard where workers are always presumed to be employees. The bill will also create a strong “ABC” test, ensuring that workers will only be considered independent contractors if: (A) the individual is free from control and direction; (B) the labor is performed outside the usual course of business; and (C) the individual is engaged in an independently established business.
  • Create the right to flexibility at work. The bill gives workers who are currently treated by their employers as independent contractors the right to maintain their scheduling flexibility and gives all employees greater scheduling flexibility.
  • Ensure corporations are held accountable when they misclassify workers as independent contractors and deny them rights. This bill will make it a violation to wrongly classify an employee as an independent contractor and mandate companies reclassify workers if they are found in violation.
  • Protect “temp” workers. The bill will create a host of new protections for the millions of “temp” workers across the country to ensure they are not paid less than direct employees, have the right to transition to full direct employees after one year, and have access to unemployment insurance and workers’ compensation.
  • Protect small businesses by making big businesses jointly responsible for worker protections. In addition to forcing large corporations to share responsibility for respecting labor laws so that small businesses are not forced to compete with scofflaws companies that violate workers’ rights, the bill will protect small franchises of large corporations by finally holding their parent corporations responsible for corporate-driven violations of workers’ rights. The bill also puts CEOs and top shareholders on the hook for workers’ right violations and requires large employers to create plans to address workers’ rights violations throughout their supply chains.
  • Expand public transparency. The bill will require companies to post notices of their compliance with labor laws so that consumers can choose to support good businesses over ones that violate workers’ rights.
  • Establish broad and increasing worker protections that will end the continuing erosion of workers’ rights. This bill requires workers’ rights to be interpreted broadly and exceptions to be interpreted narrowly, increases the time period that workers have to sue to vindicate their rights, and prohibits agencies from weakening worker protections. This will ensure a safe and secure future for workers.

 

The bill has been endorsed by: the National Employment Law Project (NELP), the AFL-CIO, the Service Employees International Union (SEIU), and the Economic Policy Institute (EPI).

 

“Misclassification is a widespread problem affecting a large swath of workers across the country. This legislation would make it more difficult for employers to misclassify their workers and requires all employers to play by the same set of rules,” said Heidi Shierholz, Director of Policy at the Economic Policy Institute. “Particularly as our economy recovers from the recession caused by the COVID-19 pandemic, workers will need all of the protections they are entitled to such as minimum wage, overtime pay, safe workplaces, and paid sick time.  This legislation helps ensure that workers who are entitled to those protections actually receive them.”

 

“NELP applauds Senator Patty Murray for the introduction today of the Worker Flexibility and Small Business Protection Act, which reestablishes baseline labor rights to ensure that corporations live up to their responsibilities to the workers who make their businesses possible. This is how we build thriving families and communities and a just and inclusive economy. Senator Murray’s bill responds to harmful corporate practices of structuring their relationships with workers in a way that shifts risk onto labor intermediaries like subcontractors or temp/staffing agencies, or onto workers themselves, while diverting wealth to investors and CEOs. These corporate practices force people to work without the basic rights they need and deserve from a job: minimum wage; overtime; and protection from job loss, work-related injury and illness, and discrimination. Far from dismantling the structural racism that has plagued our nation since its founding, these pernicious practices find new ways to uphold it,” said Rebecca Dixon, Executive Director at NELP.

 

"Working people who are putting their lives on the line to keep our nation running during a pandemic need protections--and this bill does just that," said Mary Kay Henry, President of SEIU. "By ensuring that people who are employees are rightly treated as such, it gives working people the rights and protections they deserve. The bill also stops irresponsible corporations from shirking their responsibilities to the people who work for them."

 

"This bill tackles head-on some of the biggest drivers of inequality and bad jobs in recent decades—the many strategies that businesses use to avoid their responsibilities to the people who make them profitable,” said AFL-CIO President Richard Trumka. “These strategies include the misclassification of employees as independent contractors, subcontracting, franchising, and the use of permatemps, labor contractors, and staffing agencies. We have to level the playing field so companies that treat their workers right are not put at a competitive disadvantage by competitors that want to wash their hands of any responsibility to provide decent work for their workers. If we care about the future of work and, most importantly, the future of workers, we have to discourage low road strategies, not turn a blind eye or encourage them. These are policy choices, and this bill is proof that there is something we can do to make employers responsible for good jobs and treating their workers right."

 

A summary of the bill can be found HERE and the bill text can be found HERE.

 

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