MCViewPoint

Opinion from a Libertarian ViewPoint

The ABC’s of PRO | The Libertarian Institute

Posted by M. C. on June 22, 2021

California’s bill to regulate the gig economy of freelance contractors… regulate out of existence. Unless, your freelance job is protected by a powerful, well-funded Union, like the truckers union, who have received exemptions. A judge has ruled that truck drivers in California are not subject to Assembly Bill 5 (AB 5), a new gig economy law that seeks to reclassify many contractors as employees. 

https://libertarianinstitute.org/articles/the-abcs-of-pro/

by Bob Fiedler

Just when you thought our wise overlords in government couldn’t make our economic situation any worse, Joe Biden dares to dream the impossible dream, and endorses legislation to stick it to freelance contractors called: The PRO Act. This is nearly identical to the legislation California’s democratic super-majority pushed through on a State level.

I covered that bill’s causes and effects in both an article and podcast episode called “California Reaming.”

That may be helpful to watch or re-watch, to compare California’s Assembly Bill 5 (or AB5) with Biden’s current PRO act legislation.

As we all know, there’s nothing Democrats care more about than looking out for “the little guy.” It’s precisely that selfless compassion that makes them a better person than the rest of us. But their genuine belief that the important thing is to do something to feel like you are helping, instead of judging their success by a real-world assessment of this kind of legislation’s effects has already proved ruinous to California businesses. There is no reason to expect any difference on a national level, should the PRO Act pass.

In this article, I want to discuss what is known as the ABC test that has been used to apply to judicial scrutiny in places like CA where this law is in effect and is a central feature of the PRO Act as well. This will be followed by a deep dive into the Constitution’s “Contracts Clause” to discuss what this clause means and the myriad ways it relates to modern legislation like AB5 or Pro Act.

California’s bill to regulate the gig economy of freelance contractors… regulate out of existence. Unless, your freelance job is protected by a powerful, well-funded Union, like the truckers union, who have received exemptions. A judge has ruled that truck drivers in California are not subject to Assembly Bill 5 (AB 5), a new gig economy law that seeks to reclassify many contractors as employees. 

The regulations, which went into effect January 1 of 2020, were drafted in response to the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles. Filed by Los Angeles City Attorney Mike Feuer, the landmark court case established a three-pronged “ABC test” to determine if an individual is properly labeled as an employee versus a contractor.

What Is ABC Test

The PRO Act uses an identical ABC test to delineate employers and contractors and is crucial to understand. So precisely what does it entail and how does it function

  1. A contractor must control their workload,
  2. Not perform work within the business’s primary scope of operations,
  3. And be “customarily engaged” in the occupation.

This test constitutes the level of judicial scrutiny applied when a law is challenged. In this case it is done so as a matter of rational basis review. Rational basis review seeks to determine whether a law is “rationally related” to a “legitimate” government interest, whether real or hypothetical.

Companies are trying their level best to circumvent that standard, which would unravel large portions of the gig economy. 

See the rest here

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