Business Week, meet the Freelancers Union: How to help self-employed workers

Richard Greenwald of St. Joseph’s College in Brooklyn, in a column for Business Week (link here), examines some of the legal hurdles facing workers in America’s freelance sector:

Today, the fast-growing freelance workforce is shouldering costs and risks formerly borne by companies. The self-employed can’t get unemployment insurance or file for workman’s compensation, and they aren’t covered by most federal or state employee labor laws, leaving them little recourse beyond spending precious time and money in small claims court if they aren’t paid.

Worse, the self-employed are taxed as if they’re medium-size employers, but they can’t deduct health insurance premiums and other expenses that bigger companies can. . . .

Health-care coverage may be the biggest roadblock. For years most freelancers were locked out because they couldn’t afford the high premiums. Now, despite its promise, the health reform law isn’t improving access to care for all Americans.

In terms of legislative action, Greenwald suggests:

Congress should reenact the Small Business Jobs Act of 2010. This piece of the stimulus, which expired at the end of last year, allowed freelancers to fully deduct their health premiums before assessing Social Security and Medicare tax. Then let’s amend federal labor law to cover the nonpayment of consultants so they have recourse through the Labor Dept. rather than suing in small claims court.

Freelancers Union

Many of these measures would please the Freelancers Union, an advocacy and support organization for America’s 42 million independent workers. In a blog post last year, I summarized the three-point policy agenda for freelancers by the group’s founder, Sara Horowitz:

Independent workers need (1) unemployment insurance to stabilize their income – and the U.S. economy – when they are involuntarily unemployed; (2) protection from late or denied payments, which 77% of freelancers have faced; and (3) access to affordable health insurance, which is prohibitively expensive to an individual on the open market.

Freelancers Union advocates in New York have been lobbying for the Freelancer Payment Protection Act, which would allow freelance workers to file claims with the state labor department for unpaid wages from deadbeat clients.

Shape of things to come

I think we may have some common ground here, built around an emerging consensus that supporting the freelance sector is a way of building tomorrow’s labor market. Hopefully advocates for legal reform will be successful in their call for changes to our labor protections and benefit provisions.

2 responses

  1. This is a great overview of the challenges self-employed folks face in the US and another perspective that illustrates how much power corporate america seems to have. I’d like to add that it is extremely time-consuming to do the record-keeping required for IRS. By the end of the day, there may be little time/energy left for creative business development.

    It is as though independent thinkers and doers are being punished for not working for (or leaving) the big companies.

    Don’t we need hard-working, creative, ‘out-of-the-box’ thinkers in our world?


  2. This is spot-on. While we live in an imperfect world, we all agree, on principle, that any service provider who honors his word and delivers on time has earned payment. No doubt the Founding Fathers would back up the Freelancers Union, were they here today to cast their votes.

    The nuts and bolts of bona-fide freelance work are as authentic as it gets. Omitting layers of middlemen and their obtuse records renders ever more plain what’s working, and who’s doing the right thing. I see no reason that local small-business owners should subsidize corporate health insurance rates and unemployment payments, on the strength of routinely-broken promises to create or preserve jobs; especially when they get virtually nothing to show in return.

    A dialogue in which each party approves the same, clear terms — and in which each remains accountable on open channels — invariably benefits society. What better way is there to stabilize an economy?

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