PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Coalition Letter in Support of the “Modern Worker Empowerment Act”

By at 23 September, 2019, 5:13 pm

The Honorable Elise M. Stefanik

U.S. House of Representatives

Washington, DC 20515

Re: Modern Worker Empowerment Act

 

Dear Congresswoman Stefanik:

On behalf of the Coalition to Promote Independent Entrepreneurs, a national coalition of organizations, companies, and independent entrepreneurs that support an individual’s right to do business and work as an independent entrepreneur, we are writing to express our strong support for H.R. 4069, the Modern Worker Empowerment Act. The undersigned thank you for introducing this bill.

The modern economy has introduced technological innovations that enable individuals with merely an idea and a computer or smartphone to start a business. Despite low barriers to entry for independent entrepreneurship, Bureau of Labor Statistics data reveal that the number of independent entrepreneurs relative to the civilian labor force has declined over the last ten years. Enclosed is a graph reflecting BLS data in this regard.

One factor contributing to this decline is our nation’s outdated and inconsistent labor laws. At this time, more than ten different tests define the term “employee” for purposes of federal and state statutes. This patchwork of different definitions for the same term creates significant uncertainty for independent entrepreneurs and their clients. This uncertainty, in turn, creates an unfair playing field that discriminates against these independent entrepreneurs relative to their larger incorporated competitors, which stifles economic growth.

The Modern Worker Empowerment Act would liberate independent entrepreneurs by updating the definition of the term “employee” for purposes of the Fair Labor Standards Act (“FLSA”) and conforming it to the other New Deal statutes enacted during the 1930s that also applied an “economic realities” test many years ago but now apply a common-law definition for the term.

The bill also would reconcile the FLSA with more recent United States Supreme Court decisions[1] holding that a common-law test is the proper test for the term “employee” for purposes of (i) statutes that do not define the term, and (ii) statutes, such as the FLSA, that define the term with a definition that is circular. Furthermore, adopting a common-law test for purposes of the FLSA would have the effect of harmonizing the definition of “employee” for purposes of all federal statutes.

A harmonized definition of “employee” would be beneficial to all stakeholders. It would provide much needed certainty to independent entrepreneurs and their clients, while also enabling government agencies to more efficiently ensure proper worker classification.

We thank you for your leadership on this important issue by introducing H.R. 4069 to bring the FLSA into the 21st century.

Sincerely,

American Bakers Association

American Moving & Storage Association

American Society of Travel Advisors

American Trucking Associations

Americans for Tax Reform

Auto Care Association

Center for Worker Freedom

Competitive Enterprise Institute

Dart Transit Company

Direct Selling Association

Electronic Transactions Association

Financial Services Institute

Forest Resources Association

Freedom Foundation

Heritage Action for America

Hispanic Leadership Fund

HomeCare.com

Independent Bakers Association

Insights Association

International Franchise Association

MBO Partners

MSPA Americas

National Association for the Self-Employed

National Association of Home Builders

National Council for Languages and International Studies

NetChoice

Private Care Association

Rio Grande Foundation

Small Business & Entrepreneurship Council

TechFreedom

The Heartland Institute

cc:        The Honorable Bradley Byrne

             The Honorable David P. Roe

             The Honorable Ron Wright

[1] Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989), Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992), and Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (2003).

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