Comment from Karen Kroll

I’m writing to support the use of the Department of Labor’s proposed Economic Reality Test to distinguish between employees and independent contractors.

Over the past 27 years, I’ve built a business as a self-employed freelance writer, providing writing services to companies and publications. Because I’m self-employed, I’ve been able to control the hours I work, which allowed me more flexibility when my children were growing. I can accept assignments when they fit my time frame and other terms. This is one reason that nearly 80 percent of independent contractors, per BLS data, prefer being self-employed to traditional employment.

In addition to having control over my work hours and assignments, I’ve been able to contribute about 40 percent of my family’s income and save for retirement. And just as in investing, diversification—in my case, writing for multiple clients—provides protection. Even during the 2007-2008 recession, when unemployment reached 10 percent, I had steady work and an income. While my business from some clients dropped, it continued with others. As a result, my income was more stable than that of many traditional employees.

In addition, I have other benefits not afforded traditional employees, and particularly those employed part-time. To start, I can keep the copyright to the work I produce. If I was an employee, the copyright would go to my employer.

I’m able to save for retirement through a SEP IRA or individual 401(k), and currently can contribute up to $57,000 annually. Most part-time workers aren’t eligible for company retirement plans. They can open IRAs but are currently limited to contributing up to $6,000 annually, or $7,000 if they’re age 50 or older.

Many employers require employees to sign do-not-compete clauses. As an independent contractor, if a potential client asks me not to write for specific publications, I can decide whether or not to accept the request.

In summary: I’m not exploited. I’ve built a small business that I enjoy and that provides a stable income. I’d like to remain an independent contractor.

The clients for whom I work benefit, as well. They’re able to hire me for specific projects, when my skills match their needs, without hiring me on a long-term basis.

Laws like PROAct and the Senate’s Worker Flexibility and Small Business Protection Act, which purport to protect independent contractors by classifying many as employees, assume all independent contractors are exploited and would prefer to be employees. I, and the majority of independent contractors, disagree.

These laws contain the ABC test, which was developed in the 1930s and could outlaw almost all independent contracting. The results of Assembly Bill 5 (AB5) in California, which contains the same ABC test, shows the harm this could do. AB5 damaged or destroyed the ability of thousands of self-employed individuals, including interpreters, filmmakers, writers, photographers, court reporters, and others, to continue in their fields as independent contractors.

The ABC test, if implemented in federal legislation, would harm millions of self-employed and independent contractors. I support the Economic Reality test proposed by the US Department of Labor to distinguish between employees and independent contractors.

Thank you for considering this.

Comment ID: WHD-2020-0007-0188 | 20-Oct-20

Categorized under Independence

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