The Maine real estate market is red hot. In April, the average listing in the state spent just eight days on the market. High demand for real estate has made for busy days for Maine’s brokers and agents, like me, as well as the appraisers, photographers, inspectors and other businesses with whom we work.
A federal survey has found that nearly eight out of 10 independent contractors prefer working for themselves to being an employee of a company. mary416/Shutterstock.com
As a real estate broker, I am grateful to be in a sector of the economy that is successfully emerging from the pandemic. I know the situation for many others is different. In Washington, D.C., members of Congress are focused on finding ways to lift up more workers by increasing wages and extending access to benefits. I support these efforts. I strongly encourage Sens. Angus King and Susan Collins and others who want to help: Please find ways to protect workers and small business, but avoid unintended consequences through your actions.
Regretfully, across the country and in Congress, many are pushing something called the ABC worker classification test as a solution to the problems experienced by workers today. Laws that use the ABC test severely limit the ability to find work as an independent contractor. The ABC test is presented primarily as a way to help “gig” workers like drivers at Uber and Lyft. However, that is not where the test’s impact stops. Independent contractors are found far outside the gig economy and existed long before Uber and Lyft. There are potential undesirable consequences for many of us under this test.
Many small-business owners, like me, are independent contractors by choice. My small real estate business is built on independent contracting. Many of the appraisers, photographers and inspectors I work with can be independent contractors. Insurance agents, dentists, veterinarians, lawyers, accountants and financial representatives are frequently contractors, too.
Any legislation that relies on an ABC test threatens to negatively disrupt small businesses in these and other industries by requiring everyone to be an employee of a similar business that pays them. For some workers, being an employee may be a good fit. For people like me who have spent decades building a small business as an independent contractor, having no choice but to become an employee of a larger business would be a tough pill to swallow.
California serves as Exhibit A for how the ABC test can create problems if not properly implemented. The state enacted the test in 2019. In the years since, thousands of skilled professionals have lost work as independent contracting opportunities dried up. Rather than becoming employees, independent contractors like therapists, translators and writers saw their contracts canceled.
According to a survey by the U.S. Bureau of Labor Statistics, 79 percent of independent contractors favor independent work to a traditional job. For small-business owners who have chosen to be contractors, it is easy to see why. We own our client relationships, decide where we want to work, who we want to hire and even what kind of office space we want to buy or lease. Laws that force small-business owners to become employees put these freedoms at risk.
Fortunately, Congress can easily avoid sweeping disruption. One thing California got right was acknowledging the need for exemptions from the ABC test, including exemptions for real estate and other licensed professions. Where California fell short was falling to issue enough. The state has gone from a handful of exemptions in 2019 to more than 100 today.
Congress should learn from the California experience. The ABC test cannot tell the difference between a small-business owner and a worker at risk, but members of Maine’s congressional delegation can. If they conclude that the ABC test is the right way to help workers, then they should help small businesses like mine and others through California-like exemptions.
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