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.
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.