Among other things, the Protecting the Right to Organize Act seeks to change the definition of “independent contractor” in a way that could cause significant disruption to the financial services and property-casualty insurance industries.
This week, the Big “I" joined a number of other business organizations in sending Congress a letter opposing H.R. 842, the “Protecting the Right to Organize (PRO) Act," which the U.S. House of Representatives is currently scheduled to consider next week.
The legislation would drastically change the nation's labor laws and includes a provision that could significantly impact the independent agency system. Among other things, the legislation seeks to change the definition of “independent contractor" in a way that could cause significant disruption to the financial services and property-casualty insurance markets, including independent insurance agents and the consumers they serve.
Specifically, the legislation incorporates the “ABC" test by requiring workers classified as independent contractors to (A) be “free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact;" (B) perform service “outside the usual course of the business of the employer;" and (C) be “customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed."
By effectively reclassifying many independent contractors as employees, the PRO Act would create unintended consequences for insurance producers, independent broker-dealers and independent financial advisors.
While the Big “I" opposes this legislation in its current form, we are also working with a broad coalition in the financial services and insurance industries to seek an exemption from the ABC test for insurance agents and financial advisors. As this legislation makes its way through Congress, we will continue to provide members with updates in the weekly News & Views e-newsletter.
Wyatt Stewart is Big “I" assistant vice president of federal government affairs.