The Republican Study Committee (RSC), which includes nearly 150 members of Congress, just released a new report from their American Worker Task Force. Included in the report are several thoughtful policy recommendations that demonstrate the RSC and its members are thinking carefully about how Congress can best pave the way for a smooth transition to the future of American work.
The economic and social disruptions caused by the COVID-19 pandemic have upended the lives of most Americans, and it’s clear the virus is going to change the ways in which we live and work - in some cases, on a permanent basis. The pandemic may also hasten some of the changes that were already underway for American workers, such as the dawn of the gig economy and the rise in remote work.
As members of Congress consider the future of American work, in both the COVID era and in a post-COVID world, it is critical that they avoid putting up artificial barriers to entry for workers and small businesses. Too often, the urge to over-regulate interstate commerce prevents countless Americans from accessing opportunities and financial stability in new markets. Fortunately, several of the RSC recommendations would inspire confidence and growth in the American economy, rather than stifling it with a ‘government-knows-best’ attitude.
Below are just a few of the recommendations from the RSC’s new report that we find particularly promising. You can read the full report here.
The New GIG Act: The RSC takes a positive approach to independent contractors earning money on platforms like Uber or Lyft, rejecting the harmful “ABC test” instituted by California under Assembly Bill 5 (AB5). (More on that from NTU here.) The New GIG Act from Rep. Tom Rice (R-SC) would establish a new three-part test to determine whether a worker is an employee or an independent contractor: “(1) the worker is treated as an independent contractor and not an employee; (2) the customer is not treated as the employer; and, (3) if a third party facilitates payments and transactions, the third party is not treated as the employer.” While lawmakers should certainly proceed with caution on a federal standard for worker classification, this is a far better direction for workers and companies than making the California “ABC test” the national standard. If Congress reaches a day where it must weigh in on worker classification, they would be much better off adopting the New GIG Act than a national AB5.
Protecting Remote Workers from Double Taxation: For months, NTU Foundation has warned that the huge new wave of remote work forced by COVID-19 has potentially significant implications for state taxpayers. NTU Foundation has recommended that lawmakers introduce legislation to “specify that, for the 2020 fiscal year and the length of the national emergency, employees working remotely due to the pandemic should be considered to be working from their primary worksite for tax purposes.” The RSC Task Force similarly recommends the “status quo for taxation of employers and employees during the public health emergency.”
Tackling Occupational Licensing Restrictions: The RSC is right to call out the onerous nature of occupational licensing requirements at the state level, which can lead to absurd scenarios where, as the Task Force points out, cosmetologists require more than 10 times the amount of training to receive a license as emergency medical technicians (EMTs). Though Congress is limited in how it can address state-based laws, one strong Task Force recommendation is the Portable Certification for Spouses (PCS) Act. This bipartisan bill would allow the Department of Defense to use existing tax dollars to enter into interstate compacts that would “alleviate the burden associated with relicensing” for spouses of military servicemembers who permanently change their duty station to another state.
Ending the Davis-Bacon Act: The RSC recommends repealing the Davis-Bacon Act, a recommendation NTU has also made many times before. As we wrote earlier this year, “[t]he 1931 Davis-Bacon Act is an expensive mandate requiring contractors for federal construction projects to pay prevailing union wages for non-union labor. On average, taxpayers are forced to pay wages that are 22 percent higher than market rates. The result, according to the Heritage Foundation, is more than $100 billion worth of additional costs over the next decade and fewer job opportunities on each project. DBA gives unionized firms an advantage when bidding on infrastructure projects, keeping taxpayer costs unnecessarily high and competition to a minimum.” For all of the above reasons, we agree strongly with RSC’s recommendation to fully repeal Davis-Bacon.
Studying How Regulations Affect Child Care Costs: Back when NTU wrote about child care policy options in March 2020, we noted that certain licensing requirements, reciprocity issues, and other state and local regulations hamper the effective supply of child care across the country and raise costs for parents. This is why we support the RSC’s recommendation to have the Department of Health and Human Services (HHS) study how state regulations impact the cost of child care. If there’s a regulation that’s unrelated to the health and safety of children but that significantly burdens parents with higher costs, states should re-examine that regulation. This study could be a first step in doing so.
Supporting the Expansion of Investment Options for Workers: NTU wrote back in June that the Department of Labor’s move to allow more private equity investments for 401(k) plans “has the potential to offer up great opportunities and great returns for many Americans saving for retirement.” The RSC appears to agree, writing “[w]orkers should be trusted to make investment decisions over the retirement account funds that they earned, which includes choosing to invest in private equity product.” We couldn’t agree more.
The above is just a small sample of the 118 policy recommendations in the Task Force’s new report. We’ll continue to study these recommendations and more, but the RSC has at minimum offered several thoughtful policy options for the tens of millions of Americans rapidly confronting a new future of work.