Limits on independent contracting hurt employers and workers

Mass. should lift restrictions on those seek career flexibility

CARING FOR A tsunami of patients in the midst of a pandemic is hard enough. Unfortunately, laws in Massachusetts and California make the job even harder by preventing hospitals and all other employers from contracting with self-employed individuals for work if they bring skills that fall within the buyer’s “usual course of business.”

A health care system facing an enormous surge in demand is looking frantically for skilled personnel and specialists to serve the sick by contracting with individuals who can quickly bring desperately needed help to patients—and comfort to their families—with minimal supervision.

Skilled capacity exists to meet public-service needs like this. At least 40 percent of the American workforce effectively supervises themselves, providing a deep reservoir of talent to handle surges in demand like we face today. But in Massachusetts and California, the best that hospitals and other health care facilities can do to increase their capacity is rent individuals of uncertain skill levels who are employed by temp-staffing agencies.

But relying on local temp staffing is how Berkshire Health had to fill in for nurses who were furloughed in March because of possible exposure to the virus. Young specialists like nurses look forward to “going 1099” so they can still practice nursing, but skip the relentless grind and inflexibility. And health care facilities are eager to contract with these experienced professionals.

But since this route to tailored talent is foreclosed in Massachusetts, Berkshire was prevented from contracting with specific individuals who possess the particular expertise it was looking for, since the work was within its usual course of business. “Usual course of business” makes no allowance for 100-year pandemics, hurricanes, or other disasters.

Individual workers also lose under this arrangement. The laws effectively put self-employed independent contractors out of business. The workers either have to become regular employees somewhere or go through a staffing agency where they would likely make far less money, as in the Berkshire example.

Successful contractors learn how to work very quickly, finish tasks flawlessly, and then charge a little more for them. Good work at a fast pace and decent rates makes the contractor’s revenue meter spin faster, which is one reason why they rarely return to more traditional settings.

Many people want more control over their work time. They seek flexibility instead of a rigid corporate schedule, the opportunity to earn more, and to choose what they do and with whom they work.

Self-employed independent contractors can achieve these goals without start-up capital or the large fees that are required to enter many industries. Yet by classifying virtually every worker as an employee, Massachusetts and California rob parents, family caregivers, the disabled, the active retired, and so many others of the ability to work on a schedule that fits their family and other commitments, as well as their preference for how much they’d like to work.

No one disputes that some employers have used their leverage to save on benefits and other costs by inappropriately classifying workers as independent contractors. Massachusetts and other states should have laws to protect the workers, and they do.

But those laws shouldn’t turn voluntary independent contractors into pariahs and their clients into criminals, and rob them of the flexibility they need to balance work, family and other responsibilities.  Unfortunately, that’s exactly what the Massachusetts and California laws do.  Wouldn’t it be better public policy to let individuals voluntarily declare themselves as their own employer, so state enforcement resources could concentrate on real victims?

Defenders of these laws invariably point to Uber and Lyft as examples of how the laws don’t squelch the freedom to be an independent contractor. But these companies’ deep pockets and willingness to aggressively defend their positions make them unique. Self-employed individuals aren’t so lucky.

The general public also pays a price for these unwise laws since they rob businesses of the ability to gear up and down in response to demand. Firms maintain more capacity than they need when demand ebbs, which causes consumers to pay more during normal times and still face poor service when demand spikes, as companies struggle to handle increased volume with existing staff.

Meet the Author
Protecting workers from being exploited should not deprive those who seek independence, flexibility and the freedom to earn a living.  Never has that been more apparent than right now, as our health care system struggles to keep pace with the unprecedented volume of COVID-19 patients.

Mike Hruby is president of New Jobs for Massachusetts, a 501c4 non-profit that advocates for rapid job growth and is supported by like-minded individuals and corporations.