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This House-Approved Bill Could Reclassify Independent Contractors

Government + Policy

This House-Approved Bill Could Reclassify Independent Contractors

March 23, 2021
Construction jobsite
Photo: auremar

Home builders and subcontractors go hand in hand. Independent contractors and subcontractors offer expertise and much-needed labor—workers also do not receive employee benefits, workers’ compensation coverage, or taxes on wages. The Protecting the Right to Organize (PRO) Act, which the House of Representatives approved this month, will redefine independent contractors. The PRO Act also aims to expand unionization rights and would amend the National Labor Relations Act, according to Construction Dive. To classify a worker as an employee under the PRO Act requires three main criteria regarding employer control, location of the job, and profession.

The individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact.
The service is performed outside the usual course of the business of the employer.
The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.
It's the second prong of that test that could throw a wrench into how contractors do business.

"If you think about it," said attorney Christopher Horton with Smith, Currie & Hancock, "most of the time an independent contractor's ... role is going to be within the usual course of the hiring entity's business."

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