MarketWatch: PRO Act, called ‘most important labor legislation in several generations,’ passes House

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The U.S. House of Representatives on Tuesday passed the PRO Act, which supporters called the most significant labor legislation in decades and opponents characterized as a gift to unions at the expense of workers.

The bill would provide new protections to workers seeking to unionize and penalize companies that violate workers’ rights. Significantly, amid the rise of gig work, it could also make it more difficult for companies like Uber Technologies Inc. UBER, +3.85% to continue classifying their drivers as independent contractors.

The Protect the Right to Organize Act, or HR 482, passed 225 to 206 along mostly partisan lines — only five Republicans voted for it — and now goes to the Senate, which last year failed to take it up after the House’s approval.

Judging from the amount of Republican opposition to the bill, it is not guaranteed passage in the Senate even if it is brought to a vote this year. But the lead author of the bill, which has three Republican co-sponsors, is calling for legislators to act.

“Over the past year, every elected official has celebrated the courage and resilience of our workers,” said Rep. Bobby Scott, D-Va., in a statement. “But there is a difference between praising hard work and standing up for hardworking people. Workers need our solidarity, and they need our action.”

Rep. Susan Wild, D-Pa., said wages and purchasing power “have barely moved” from four years ago and called the PRO Act “the most important labor legislation in several generations.”

A group representing gig companies Uber, Lyft Inc. LYFT, -3.06%, DoorDash Inc. DASH, +6.05% and Instacart said in a statement Tuesday that it was disappointed.

“We will continue working with members across the aisle and the Biden administration for modern policies that preserve worker flexibility and independence, while providing the security of a robust benefits plan to every worker who needs it,” the App-Based Work Alliance said. (President Joe Biden supports the bill.)

“The PRO Act clarifies that we have the right to organize together and form our own unions, and gives us real tools to hold these companies accountable,” said Nicole Moore, a part-time Lyft driver who organizes for Los Angeles-based Rideshare Drivers United. “This is a first step for app-based worker justice.”

Proponents of the bill on Tuesday called unions the “backbone of the middle class” and said unionization rights under the National Labor Relations Act have been chipped away over the years as companies have amassed more wealth and power.

“In the late ’70s, CEOs made 35 times what their workers made,” said Rep. Tim Ryan, D-Ohio, on Tuesday during the debate on the bill on the House floor. “Today it’s 300 times that. Heaven forbid we pass something that’s going to help the damn workers in the United States of America. Heaven forbid we tilt the balance that has been going in the wrong direction for 50 years.” He yelled at Republicans to “stop talking about Dr. Seuss and start working with us on behalf of the American workers.”

Meanwhile, Rep. Virginia Foxx, R-N.C., on Tuesday called the PRO Act part of the “Democrats’ socialist agenda.” She added that the bill, which would require workers of an organized workforce to pay union dues even if they do not join the union, would “harm the economy and the American worker, and do a great injustice to employers who risk their capital every day to create jobs.”

Also opposed to the legislation are chambers of commerce and other business groups, plus some freelancers and independent contractors who say they will lose work if the bill passes because it includes the so-called ABC test. Under the test, workers can be considered independent contractors only if they control their work; if their duties fall outside the scope of a company’s normal business; and if they have an independent business doing that work.

John Logan, a professor and director of the Labor and Employment Studies Department at San Francisco State University, said, “The PRO Act needs to address the growing number of workers who are excluded from the protections of the NLRA, which is what the ABC test is partly intended to do.”

“Trying to force everybody into a union is the goal of this law,” said Foxx during a news conference Monday, the day before the debate on the House floor. She was joined by Monica Wyman, a weddings and events florist in California who said she has lost business since the state adopted the ABC test.

“I can no longer take those jobs without knowing if I could hire other freelancers and workers,” Wyman said.

But Catherine Fisk, labor law professor at UC Berkeley, told MarketWatch: “The PRO Act applies only to rights to unionize and bargain collectively.” She added that because it would apply nationwide, freelancers would have no competitive advantage from one state to another.

Scott, the author of the bill, said in a statement that the PRO Act closes the “loophole” of companies misclassifying workers to avoid giving them the right to organize. It would give “eligible freelancers and gig workers, who are classified as employees, the right to decide for themselves whether to form union. Or not. Anyone making wild claims that this bill would mean the end of freelancing or restrict workers’ flexibility is either mistaken or deliberately misrepresenting the facts.”

To address concerns by freelancers, independent contractors and small businesses, an amendment to the PRO Act calls for the Government Accountability Office to prepare a report on the impact of the changes made by the bill to the definition of “employee” under the ABC test and the definition of “joint employer” under the NLRA. The president would be required to consider the report and recommend Congress modify the definitions, if needed.

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