ABC-SEMI Southeast Michigan Contractors Issue 4, 2021

6 Associated Builders and Contractors, Inc. PRO AC T The Protect the Right to Organize (PRO) Act would make some of the most dra- matic, and controversial, union-friendly changes to American labor law in decades. Labor advocates have called it the most important piece of labor legislation in generations, while big business groups say that it will harm independent contrac- tors and bottom lines. The act would extend joint employer liability (in which an individual who is not on an organization’s payroll, and is contracted from another company, could still be considered their employee), expand the definition of employee by narrowing the definition of supervisor and independent contractors, ease union election rules, end right-to-work protec- tions that prohibit employees from being forced to pay union dues as a condition of their employment, allow for more strikes, and make it more difficult for employers to replace workers on strike, and mandate initial collective bargaining agreements within as little as 120 days, amongst other things. While the legislation is making headlines for its likely impact on 57 million independent contractors, perhaps its most disastrous feature is that it would ban right-to-work laws nationwide. Currently, Michigan and twenty-six other states have right-to-work laws on the books, and two others are considering right-to-work legislation this year. These laws protect workers from being fired for not paying union dues, while ensuring they still have the ability to join unions voluntarily. Attempts from Congress to overturn right-to-work laws remove workers’ basic workplace protections and prevent states from making their own laws regarding union membership. Research shows states with right-to- work laws have lower unemployment rates, more job opportunities, and are much more attractive for businesses investment. As members have to opt-in to union membership in right-to-work states, these laws also encourage unions to better serve their members. Individ- uals also benefit financially. One study found that the average real income for households in right-to-work state metro areas, when all else was equal, was nearly $4,500 more than that in non-right-to- work state metro areas. Another factor to consider in the PRO Act is that “independent” contractors lose their independence (and likely, jobs). If passed in its current form it will have a substantial impact on independent con- tractors, including traditional freelancers and those who make a living via the “gig economy”—at a time when workers need flexibility in work more than ever. Many construction workers may currently work as independent contractors and enjoy the flexibility and freedom to work their own hours on their own terms. But the PRO Act would implement a stringent set of requirements that a worker must pass in order to keep working under such arrangements. In most cases, the PRO Act would force companies to hire these workers as full-time employees with benefits in order to continue employing them. That means these workers may also be subject to forced unionization. California was the first to codify the strin- gent regulations, or “test” into law with Assembly Bill 5 in 2019, and less than a year into its existence, voters repealed portions of the law via Proposition 22. AB 5 established who can legally work on a contractual basis, and who must be a hired employee. As the many national economists point out, AB 5 virtually outlaws independent contract and free- lance work in the state, and the stories of those who lost their jobs in its wake are plenty. The PRO Act would follow Cali- fornia’s lead. Millions of workers would no longer be individual contactors but employees who are no longer excluded from union representation. What’s at Stake with the PRO Act Radical Legislation Would Hamstring Merit Shop Contractors