Opinion: Preserve freedom for Virginia’s independent workforce – The Virginian-Pilot – The Virginian-Pilot

Gabriella Hoffman, an Alexandria resident, is a visiting fellow with Independent Women’s Forum and the host of the District of Conservation podcast. (HANDOUT)

Virginia’s business-friendly policies encourage workers to chart their own entrepreneurial course. But new federal rulemaking aimed at addressing misclassification could undermine the commonwealth’s burgeoning freelance workforce.

Last month, the U.S. Department of Labor announced proposed changes to the Fair Labor Standards Act to place barriers to workers desiring to operate as independent contractors. The rule, if adopted, would impose strict criteria on independent workers to prove they aren’t employees in the form of a new economic realities test. This is a major departure from the Trump-era rule that favored a flexible worker model.

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As a full-time Virginia freelancer, I would be penalized for honestly living out the freelance lifestyle under these obtuse worker guidelines.

The DOL argues this revision would curb perceived misclassification in the workplace. By reclassifying most workers as employees, however, it’ll make them candidates for union jobs — a shrinking sector that only comprises 10.3% of the workforce. Virginia workers who survived the pandemic with independent work don’t want bureaucrats to erase their livelihoods.

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Federal rulemaking aimed at discouraging independent contracting would be costly to Virginia’s economy.

According to the American Action Forum, the commonwealth boasts 557,643 independent workers. That’s roughly 15% of our total non-unionized, private sector workforce — or 3,445,000 private sector workers.

If 50% of the freelance workforce is converted to traditional employees, for example, the cost would be $1.28 billion. Contrasting this projection of displacement against the alleged cost of misclassification in Virginia — purportedly $28 million in “lost revenue” — reclassification poses a greater threat to worker freedom.

That’s why a majority of Virginia’s freelancers, like their counterparts in 49 other states, are content with their status and not being tied down to a single employer.

When polling Virginians on restricting independent contracting under the guise of fighting misclassification, they see through the deceptive language and overwhelmingly oppose changes to existing law.

In June 2021, the Northern Virginia Chamber of Commerce polled Virginians — Republicans, Democrats and independents — and found 69% of respondents worry about limitations potentially being placed on individuals to operate as independent contractors.

That matches national polling revealing greater acceptance of flexible jobs and non-traditional work.

A Forbes-Tate poll found 70% of voters are concerned about changes to labor law that create obstacles to contract work.

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Virginia labor law is imperfect and not as independent-worker friendly as it was pre-2020 — thanks to changes enacted by former Gov. Ralph Northam. However, the Virginia Employment Commission says it heavily leans on the IRS 20-factor test for determining a worker’s status.

Pro-worker — not to be conflated with pro-labor — reforms are needed in the General Assembly to attract more freelance talent here. Why? Virginia is the 30th friendliest state for independent contracting, per Tipalti’s Freelance Index. There are 4,800 self-employed workers per 100,000 individuals. As a result, lawmakers could further strengthen independent worker protections by bolstering the independent workforce to insulate workers from misguided policy.

One possible remedy under consideration is Del. Amanda Batten’s, R-Williamsburg, House Bill 529, which addresses worker classification without imposing strident considerations for meeting criteria to operate as an independent contractor.

Gov. Glenn Youngkin similarly pledged support for the commonwealth’s independent workforce, stating, “Let me be clear, I believe in the fundamental right to work. If anyone tries to bring me a bill that creates forced unionization, it will meet the business end of my veto pen.”

Like the rest of the country, Virginia’s workforce will join the freelance economy — which is expected to grow to half of the U.S. workforce — 90.1 million — by 2028.

Virginians who desire to retain their independent contractor status should submit comments voicing their displeasure with the Biden administration’s flawed labor rule.

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Gabriella Hoffman of Alexandria is a full-time freelancer and a senior fellow with the Independent Women’s Forum. Follow her on Twitter at @Gabby_Hoffman.

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