Empowering the Freelance Economy

US freelancers may have no choice but to vote for Trump due to Biden-imposed federal rule

Margaret Littman (left) and Jennifer Chesak (right) are two freelancers who are taking a new federal worker classification rule to court. Photo source: Beacon Center of Tennessee
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A lawsuit filed in the US state of Tennessee against a new Biden administration-imposed rule regarding worker classification has raised concerns for freelancers on both sides of the Atlantic

The Beacon Center of Tennessee, a free-market nonprofit, filed the lawsuit on behalf of two freelance journalists challenging the Biden administration’s rule to tighten the criteria for classifying workers as independent contractors or employees. The Department of Labor (DOL)’s Independent Contractor Rule is set to take effect on March 11th, 2024, has been met with mixed reactions, with supporters arguing it will prevent worker misclassification and ensure proper compensation, while critics, including the Beacon Center, claim it will limit flexibility and harm freelancers.

The lawsuit argues that the new rule “will force freelancers to enter undesirable employment relationships or to refrain from working at all,” raising concerns that similar regulations might be implemented in the UK, potentially impacting the growing freelance workforce.

This rule, according to an AP news report, reverses a previous standard from the Trump era that made it easier for companies to do so. Previously classified contractors typically miss out on minimum wage, benefits like health insurance, and paid sick leave.

As of 2024, estimates suggest there are roughly 76.4 million freelancers in the United States. This number has been steadily increasing over the past few years and is projected to continue growing. Can any Presidential candidate running afford to put the livelihoods of so many people in jeopardy?

On Super Tuesday (5 March 2024) 600 delegates of an available 865 pledged for Mr Trump to be the Republican running candidate, sweeping victories in states such as California and Texas (The Telegraph). Republican candidates must secure a total of 1,215 delegates to secure the party’s Presidential nomination. A likely decision could be made in just two weeks, says The Telegraph.

Why should UK freelancers keep tabs on the case?

While the UK government currently uses a different framework for worker classification, there have been ongoing discussions about potential reforms to address the issue of worker misclassification and ensure fair treatment of all workers, including freelancers.

Both sides of the debate are closely watching the outcome of the lawsuit in Tennessee, as it could have significant implications for the future of freelance work not only in the US but also in other countries like the UK, where similar discussions are taking place.

However, Richard Reibstein, a New York Partner in Locke Lord’s Labour and Employment Practice and co-head of the Firm’s Independent Contractor Compliance and Misclassification Practice, told The Freelance Informer in a comment to this article that there is little cause for concern for contractors or the companies that have hired them or wish to in future. However, he suggests in a blog he authors for his firm that workers running small businesses should carry out the following, which is no simple process, requires legal knowledge and looks like it will cost them:

“Businesses should consider a two-step approach to minimize any legal challenge to their independent contractor relationships: (1) enhancing their compliance with federal and applicable state independent contractor laws to maximize independent contractor compliance in the event a state or federal workforce or tax agency conducts an audit; and (2) minimizing the likelihood of class actions alleging independent contractor misclassification by including in their IC agreements a state-of-the-art arbitration provision with a class and collective action waiver or upgrading their existing arbitration agreement in view of the many recent developments in this area of the law.”

Richard Reibstein, Esq.

Who are the freelance journalists filed in the lawsuit?

Their bios according to the Beacon Center:

Margaret Littman is a freelance journalist, Vanderbilt alumna, and Nashville resident. For over 30 years, Margaret has written about travel, business, health, and many more topics as a freelance writer. Her favourite topic is writing about overlooked people and places. As she puts it, she wants Tennesseans to know about all the amazing things that are (figuratively) in their backyard.   

Jennifer Chesak is a freelance journalist, editor, fact checker, and adjunct professor (Belmont). Her writing, which focuses on science and medicines, has appeared in the Washington Post, Healthline, and Runner’s World. Jennifer began to do freelance work in 2010. Jennifer felt that her previous employer didn’t pay her what she was worth and proved it by making twice the money as a freelance writer.”

For more on this story check out:

AP News: https://apnews.com/article/gig-workers-biden-labor-rules-independent-contractors-be59b8ff0f2484eb5375191f89ffd4ad

The Beacon Center of Tennessee: Littman v. Department of Labor: Fighting for Freelance Freedom (beacontn.org)

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2 Comments
  1. Richard Reibstein, Esquire says

    The Biden Rule on independent contractors will have no legal significance, in much the same way that its predecessor rule issued by the Trump Labor Department had no legal significance, as explained in our blog post. See https://www.independentcontractorcompliance.com/2024/01/09/legally-nil-but-will-look-a-lot-like-a-score-labor-department-issues-its-final-rule-on-independent-contractor-status/. There is no need for any freelancers to be the least bit concerned about their legal position based on the issuance of the new rule. Of course, the media oftentimes creates newsworthy topics, even when there is little consequence to a particular legal development; freelancers and other independent contractors should not worry. If any business that once used a freelancer’s or IC’s services is concerned, they can share the above blog post with them.

    1. Katherine Steiner-Dicks says

      Thank you, Mr. Reibstein for your comment and link to your authored article. However, despite your call for calm, US freelancers/contractors are not off the hook and cannot just sit back. Your article suggests there is little “legal development” however you also note that contractors must be knowledgeable about individual state laws and ever-changing regulations as they pertain to contractors and worker status tests. Freelancers unlike corporations do not have savings built up to fund legal cases. Is it not more likely under a Biden administration, if a case goes to court, rulings will lean more towards employee status rulings? Therefore, have cause for concern? Much like the UK, US contractors do not have a straight forward way of working, which in the end hurts the economy, the treasury’s purse, livelihoods and the businesses who require flexible and experienced talent for growth.

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