The Protecting the Right to Organize Act passed in the U.S. House of Representatives early last year but wasn’t taken up by the U.S. Senate. Now that Democrats control both the legislative and executive branches of government, the pro-labor bill is being revived. Michael LeRoy, an expert in labor law at the University of Illinois Urbana-Champaign, spoke with News Bureau business and law editor Phil Ciciora about how the bill could update labor law in the U.S.
How much would the Protecting the Right to Organize Act upend existing U.S. labor law?
The PRO Act would be the most significant revision of the National Labor Relations Act, the nation’s main labor law, since 1947. Currently, independent contractors are exempt from labor laws. Thus, these workers can’t form a union and can’t bargain with an employer. The PRO Act would significantly narrow that exemption. This is important because of the rapid loss of traditional jobs to the “gig” economy – work that is paid by a piece rate, such app-driven work for Uber, Shipt, TaskRabbit, Door Dash and the like.
Businesses that structure jobs as independent contracting gigs enjoy a large advantage over traditional employers. They don’t pay Social Security and Medicare taxes – the worker is responsible for paying the employer portion out of their gig pay. The gig firm also doesn’t pay into workers’ compensation or unemployment insurance, or face discrimination lawsuits. The PRO Act wouldn’t change these things – but by changing the labor law that allows workers to form a union, this would open the door to amending wage and hour, discrimination and workers’ compensation laws to narrow independent contracting.
The PRO Act would simply enable a group of certain formerly classified independent contractors to be employees solely for the purpose of forming a union and bargaining.
Does the NLRA need to be overhauled?
When the law was modified in 1947 with the Taft-Hartley Act, employers sponsored that bill. Unions were so fearful of it they called it the “Slave Labor Act.” Their term was misplaced, but unions ended up making a fairly good prediction.
The share of unionized workers in the private sector since then has fallen from 34% to about 6%. Meanwhile, wealth inequality has widened, immensely so, and the middle class has contracted considerably. A shrinking group of unionized workers still has health insurance, but Uber drivers and other freelancers and gig workers have to find and pay for this essential benefit out of their own pockets. One reason the Affordable Care Act became popular is that employees lost insurance in workplaces without unions.
So, yes, a pro-labor bill is justified in these times.
The recent trend in employment has been the transformation of full-time jobs into part-time gigs or side hustles. How far does the PRO Act go in curbing that practice?
It would prompt gig economy companies to look for clever ways to work around the law. For example, Uber has responded to this type of labor law in European Union nations by stopping the practice of dealing directly with drivers and encouraging Uber brokers to use their service instead. In Germany, Uber is only available through car rental companies, presumably with those companies acting as the actual employers and Uber brokering the rides. Thus, Uber avoids dealing directly with unions, and leaves the work arrangements to other companies.
Currently in the U.S., Uber Freight offers an app matching service for truck owner-operators and small fleets with loads to haul, likely using the small fleet as the end-employer who would be subject to the PRO Act.
What effect would the bill have on gig workers who want to unionize?
By itself, the PRO Act won’t have a large or immediate effect on union organizing. I would expect unions to try to organize gig workers at Uber and Amazon Flex, for example. However, unions rarely win representation elections with big groups of workers because employers use divide-and-conquer tactics, such as pitting part-time workers against full-time workers.
To give some perspective, labor unions tried to encourage unionization at Walmart about 20 years ago. Walmart responded by saying, “Let’s have a wall-to-wall bargaining unit with hundreds of thousands of employees nationwide.” Unions understood that they couldn’t win this type of election because their message gets muddled between rural and urban, Northern and Southern, part-time and full-time workers in the U.S. who have very conflicting attitudes about unions. Walmart remains largely nonunion today.
I would expect that experience to carry over, at least to some extent, to gig work. Put another way, I would expect a union-organizing drive at Uber to begin with something like drivers at major airports who experience long waiting times without pay and rising airport fees for standing in line. Those drivers might agree on the need for a union.
Flexibility is important for working women, who make up a significant portion of freelancers or independent contractors. At the same time, women have lost a disproportionate number of jobs due to the COVID-19 pandemic. Would the PRO Act only further hurt their prospects for earning?
The PRO Act would likely have adverse effects on some types of workers. Even before a union would organize, some work would be restructured by using brokers or substituting more technology for humans – for example, more home-installed computers and phone apps to measure blood pressure, oxygenation, heart function and other similar health data in place of a home health care worker who takes these measurements.
But yes, the law would possibly limit work for women, retirees, college students and other similar demographics. But let’s not forget what the PRO Act does: It would allow workers to vote for or against a union. If workers fear loss of jobs due to forming a union, they should vote no and keep the status quo.