State Policy Network
The PRO Act: Federal legislation that will upend America’s labor laws

After California passed Assembly Bill 5, Lisa Rothstein lost a big piece of her income. She works as a freelancer in various roles, including a cartoonist, copywriter, and advisor. AB 5 requires many independent contractors to be reclassified as employees, preventing clients from hiring her. She is not alone. In fact, AB 5 has robbed thousands of contractors across California of their incomes.

What’s more, AB 5 may no longer be confined to the Golden State. Congress is considering the Protecting the Right to Organize Act (PRO) Act—legislation that would create a similar law at the federal level. If passed, it would have severe implications for the 57 million Americans who call themselves freelancers, as well as millions of other traditional workers who would lose their right-to-work protections.

What is the Protecting the Right to Organize Act (PRO) Act?

The Protecting the Right to Organize (PRO) Act has once again been introduced in Congress, and with Democratic majorities in both chambers and an endorsement from President Joe Biden, it stands a real chance at passing, despite previous defeat. While the legislation is making headlines for its likely impact on independent contractors, perhaps its most disastrous feature is that it would ban right-to-work laws nationwide and strip local unions and businesses of the freedom and flexibility needed to craft workplace agreements that respond to the unique needs of their workers.

The PRO Act will ban state right-to-work laws, strip states of their rights

Twenty-seven states have right-to-work laws on the books, and two others are considering right-to-work legislation this year. These laws protect workers from being fired for not paying union dues, while ensuring they still have the ability to join unions voluntarily. Attempts from Congress to overturn right-to-work laws remove workers’ basic workplace protections and prevent states from making their own laws regarding union membership.

Research shows states with right-to-work laws have lower unemployment rates, more job opportunities, and are much more attractive for businesses investment. As members have to opt-in to union membership in right-to-work states, these laws also encourage unions to better serve their members. Individuals also benefit financially. One study found that the average real income for households in right-to-work state metro areas, when all else was equal, was nearly $4,500 more than that in non-right-to-work state metro areas.

Independent contractors lose their independence (and likely, jobs)

The PRO Act would also have a substantial impact on independent contractors, including traditional freelancers and those who make a living via the “gig economy”—at a time when workers need flexibility in work more than ever. Many writers, musicians, artists, gardeners, drivers, food and grocery delivery people, and construction workers may currently work as independent contractors and enjoy the flexibility and freedom to work their own hours on their own terms. But the PRO Act would implement a stringent “ABC test” that a worker must pass in order to keep working under such arrangements. In most cases, the PRO Act would force companies to hire these workers as full-time employees with benefits in order to continue employing them. That means these workers may also be subject to forced unionization.

California was the first to codify the ABC test into law with Assembly Bill 5 in 2019, and less than a year into its existence, voters repealed portions of the law via Proposition 22. AB 5 established who can legally work on a contractual basis, and who must be a hired employee. As the Pacific Research Institute pointed out, AB 5 virtually outlaws independent contract and freelance work in the state, and the stories of those who lost their jobs in its wake are plenty. The PRO Act would follow California’s lead. Millions of workers would no longer be individual contactors but employees who are no longer excluded from union representation.

Stacking the deck against workers and small business in favor of big labor unions

The PRO Act is rife with other proposals that ultimately build up well-funded, nationalized labor unions while gutting workers and businesses of the flexibility they need to create quality, sustainable workplaces that can employ Americans for decades to come. Here are some of the other heavy-handed, federal mandates the PRO Act forces on workers and their employers.

The PRO Act:

What are the arguments in favor of the PRO Act?

Proponents of the PRO Act argue the legislation will give workers more bargaining power on the job, give workers more freedom to organize without employer interference, and protect strikes and other protest activity. It would also open up vast swaths of the American workforce to unionization—voluntary or not—by reclassifying independent contractors as employees.

What can state think tanks do?

For years, an influential network of state think tanks have worked to ensure American workers have a voice and a choice in union membership. As the PRO Act makes its way through Congress, their efforts to empower American workers are more important than ever.

Through blog posts, emails, media appearances, and other outreach, state think tanks are educating the people within their state on how this sweeping federal overreach would impact workers across the country. State think tanks are also working to inform the workers and businesses who would be hurt by the PRO Act.

Additional Reading:

Town Hall: PRO Act Will Harm Contractors and Consumers
American Consumer Institute

Right-To-Work Laws Are Good For Workers
Forbes

PRO Act Will Harm, Not Help Workers
Forbes

Protecting the Right to Organize Act
Institute for the American Worker

Independent Contractors: Hear real stories of workers impacted by job-killing regulations.
Independent Women’s Forum

Democrat-sponsored PRO Act would invalidate right-to-work laws in 27 states
The Center Square

The PRO Act / Pushbutton Unionism Bill: A Union Boss Wish List
National Right to Work Committee

The ‘worst bill in Congress’ is back
National Retail Federation


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Policy Issues: Workplace Freedom
Organization: State Policy Network