Could labor finally get its day?
The Workplace Democracy Act has yet to gain traction in Congress, but if passed it would shatter the employer-employee dynamic in Madison.
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Good bristles at the notion opponents to the WDA have put forth that the legislation would make it nearly impossible for tech companies, gig economy firms, and startups to use independent contractors, not to mention that the act would give unions the license to intimidate employees.
“The WDA would not stifle innovation or the operations of the companies [above],” comments Good. “Instead, it would allow companies to finally take responsibility for the financial well-being of their employees, many of whom work without benefits, safe working conditions, or good wages. Any business model that is predicated on denying employee access to benefits, a safe environment, and sustaining wages, while potentially advantageous to the business from a fiscal perspective, is misguided, at best.”
As for claims that the WDA would allow unions to intimidate employees, Good says they are meritless. “Employees deserve the right to associate with whom they please and to organize into unions to promote wages, benefits, and safe working conditions. Those benefits alone should persuade employees to join unions, no intimidation necessary.”
Kramer has a slightly different take.
The factors laid out in this legislation to more clearly draw a line between the definition of “employee” and “independent contractor” are not much unlike the factors that already govern those classifications in Wisconsin under worker’s compensation (WC) and unemployment insurance (UI) laws, she says.
For example, to be an independent contractor under the Workplace Democracy Act, an individual must be “free from control and direction” as he or she performs the services (the work). “Direction and control are already some of the main factors in existing WC and UI laws,” notes Kramer. “It is likely that a large number of tech companies and other startups are already running afoul of one or more laws in classifying their consultants as independent contractors rather than employees. I have seen an increase, just with my clients, in audits by the Department of Workforce Development that zero in on this misclassification issue in an effort to collect past WC premiums and UI taxes, with penalties and interest added.”
However, Kramer notes a company may have more interest in keeping a person classified as an independent contractor for the purposes of union eligibility than it does for WC or UI purposes, as the formation of a union and individuals’ membership therein may have a longer-term and further reaching impact than whether a company has to pay a few hundred dollars a year in UI taxes on an employee.
“But to speak to whether this legislation would make it harder to use independent contractors: probably, at first,” Kramer admits. “Companies wishing to use independent contractors would need be mindful of the definition of independent contractor laid out in this law, and that may mean restructuring the relationship with its independent contractors and possibly changing what work is farmed out to independent contractors and what work is done in house.
“I don’t read the legislation as giving unions a ‘license’ to do anything,” Kramer adds. “However, would unions be able to be more relentless in their efforts to get workers organized? Probably. One facet of the proposal — that unions would once again be able to put pressure on third parties (for example, suppliers of a company) as part of their effort to expose the anti-union position of the company — could be seen as allowing unions to bully those third parties. If a supplier is big enough or has enough of a market share for a particular product, and it receives pressure from unions, it might, in turn, pressure its client company to pull back on its anti-union stance by threatening to pull its supply. That’s a gross oversimplification, but the idea is that unions would be able to increase their presence in ways they are currently prohibited from doing.”
On the flip side, Kramer argues, some might say that employers have too much freedom to intimidate now, and this proposal is an effort to curb that by requiring more transparency. “Any way you slice it, there will always be unions who want to organize workers and there will always be employers who want unions nowhere near their businesses. That much will not change; however, the dynamics of the relationships among these parties, as well as the workers involved, certainly would.”