American businesses will face higher taxes and have less flexibility to hire as a result of the Biden Administration’s new rules on gig workers. The rule, which is based on California’s labor restrictions, fundamentally bans most forms of freelance work and independent contracting.

Now, the Biden Administration wants to take this poorly-crafted policy national.

Forty-six percent of small business owners already have job openings they’re unable to fill – remaining near historic highs. Imposing these restrictions on American workers and businesses now would be catastrophic.

READ: Small Biz Stuck in Cruel Biden Economy as They Brace for Recession

KEY TAKEAWAYS: 

• Businesses who can’t afford to hire contractors as full-time employees because of a greater tax burden are likely to stop using them altogether, as they did in California.
  • More costs imposed on companies will result in less funds to hire workers. 
• A recent study by former White House economists showed that the cost of reclassification of contractors unable to work in regular jobs and those whose freelance work on the side would total more than $42 billion in net earnings losses. 
• The same study showed that one out of four reclassified contractors could lose part-time or full-time jobs in this scenario with net earnings losses (including the higher compensation for those who find new jobs) of $42.1 billion. 
• Entrepreneurial Californians lost job opportunities and their incomes sharply declined. 
• The labor shortage, which will only be exacerbated by these California-style policies, will continue to fuel inflation higher and longer.

READ: Brady: As Local Biz Pays Higher Prices, Expect Higher Inflation and Worsening Recession

KEY BACKGROUND:

A year and a half into the Biden Administration, America is still facing a labor shortage.

• Main street businesses face a record labor shortage with over 10 million job openings for over a year. 
• Over half of business owners are still struggling to fill job openings after President Biden discouraged work. Of those hiring, 89 percent of small businesses reported few or no applicants for positions they were trying to fill.

Small businesses have struggled through President Biden’s cruel economy with inflation, a worker shortage, and now more tax hikes and a recession.

• Thirty percent of business owners reported inflation as the single biggest challenge in operating their business. 
• “Secondly, he should acknowledge he’s got a worker crisis. He’s not talked about it once. There are no policies for it. We can help him with that. We think there’s some smart things you could do to incentivize people to reconnect to work, versus the Biden policies that do the opposite.” – Ways and Means Republican Leader Rep. Kevin Brady (R-TX)

Republicans’ Commitment to America Means a Stronger Economy

• Republicans are committed to creating a stronger economy for American workers through pro-growth tax and deregulatory policies. 

READ: Like Inflation, President Biden’s Denial Doesn’t Make a Recession Go Away