White House Signals Veto Intentions After PRO Act Passes House
On February 6, the House of Representatives passed H.R. 2474, the Protecting the Right to Organize (PRO) Act. The legislation, which PPB Newslink reported on in January, would effectively ban independent contractor classifications under federal labor law. The bill now goes to the Senate, where movement is unlikely, but the White House has already signaled it would be vetoed if it reaches the president’s desk.
H.R. 2474 amends the National Labor Relations Act to establish a new definition of employees that expressly eliminates independent contractors in the U.S. The new legislation makes a broad presumption that all workers in the U.S. are employees unless each requirement of a newly established "ABC" test can be met. The proposed federal legislation is very similar to California’s Assembly Bill 5, which addresses employee classification and became law in the state on January 1. Under that law, workers are considered employees unless they can meet all three conditions that would classify them as independent contractors.
The White House’s statement in opposition to the bill identifies several issues with the legislation. Notably among them is the provision replacing the current “common-law” test used to determine whether an individual is an employee or independent contractor, for purposes of the National Labor Relations Act, with an “ABC” test similar to the one now in effect in California.
Under California’s law, workers are presumed to be employees unless the company proves that they are: (a) free from the control and direction of the company in performing work, both practically and in the contractual agreement between the parties; (b) performs work that is outside the usual course of the company’s business; and (c) is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the company.
Follow PPB Newslink for more on this bill as updates become available.