Dear Senator Scott and Congresswoman Stefanik:
On behalf of the Coalition to Promote Independent Entrepreneurs, a national coalition of organizations, companies, and independent entrepreneurs that support an individual’s right to work as an independent entrepreneur, we are writing to express our strong support for the Modern Worker Empowerment Act.
The modern economy has introduced technological innovations that enable individuals with merely an idea and a computer or smartphone to start a business. Thus, one might expect the number of self-employed individuals to have skyrocketed over the past decade. Surprisingly, that did not occur. Instead, Bureau of Labor Statistics (“BLS”) data reveal virtually no net increase in the number of self-employed workers over the past ten years. The following graph depicts the BLS data.
How could this possibly have occurred? One factor contributing to this distressing reality is our nation’s outdated and inconsistent labor laws. At this time, more than ten different tests define the term “employee” for purposes of federal and state statutes. This patchwork of different definitions for the same term created significant uncertainty for independent entrepreneurs.
and–most importantly–for their potential clients. to be sure, for potential clients, this regulatory uncertainty, together with the draconian consequences of an erroneous worker classification, operate as a powerful disincentive against doing business with independent entrepreneurs. These conditions impede the growth (if not survival) of independent entrepreneurship while stifling economic growth generally.
The Modern Worker Empowerment Act represents a significant action toward reducing this regulatory uncertainty and thereby revitalizing independent entrepreneurship. It would confirm the definition of the term “employee” for purposes of the Fair Labor Standards Act (“FLSA”) to other federal statutes, including the other New Deal statutes that also once applied an “economic realities” test until that test was jettisoned in favor of a more predictable common-law definition for the term.
A harmonized common-law definition of “employee” for purposes of all federal statutes would be beneficial of all stakeholders. It would provide much needed certainty and predictability to independent entrepreneurs and their clients, while also enabling government agencies to more efficiently ensure proper worker classification.
We thank you for your leadership on this important issue by introducing the Modern Worker Empowerment Act.
American Bakers Association
American Society of Travel Adivisors
American Trucking Associations
Americans for tax Reform
Competitive Enterprise Institute
Direct Selling Association
Financial Services Institute
Forest Resources Association
Heritage Action for America
Independent Bakers Association
International Franchise Association
National Association of Home Builders
Open Competition Center
Private care Association
Rio Grande Foundation
Small Business & Entrepreneurship Council