New vaccine mandate will promote the gig economy
The government as a whole and the IRS and state unemployment agencies in particular have been waging a war against independent contractors for decades. But now the Biden administration has taken a huge step to promote the idea of hiring independent contractors. It is called vaccine mandates for all employers, recently announced by Biden.
Independent contractors are not subject to unemployment taxes or coverage, worker's compensation, labor law enforcement, or tax withholding at the federal or state level. In addition, in most states, child support orders are not enforced against independent contractors.
This helps make independent contractors more attractive to some employers. (Yes, there are also downsides to hiring independent contractors as opposed to employees.)
Biden has proposed that all employers, regardless of size, be subject to "vaccine" mandates. Independent contractors are not employees for OSHA purposes, though in some ways they may in fact be an employer themselves. Gig workers are independent contractors and not employees.
As we saw recently in California, poorly written laws such as A.B. 5 trying to control who is and who is not an independent contractor don't work well. California has had to change the law and respond to voter initiatives such as Proposition 22 and court rulings and is still trying to deal with the fallout from bad legislation. The Federal Labor Department earlier this year canceled regulations written in the Trump administration that would have better codified independent contractor status and probably made it more difficult to truly be an independent contractor.
American business is nothing if not inventive. With the proposed mandates for all levels of employers, businesses will turn to using independent contractors because they are not subject to the mandates. This will speed up the growth of the gig economy, as many Americans find this type of "employment" to be very attractive for all the freedoms it entails.
After the biggest losses in history last year to state unemployment tax funds, the Biden administration wants to take millions of workers out of the system. Their tax dollars will go with them.
The Labor Department will be regulating fewer employees, which is contrary to the Democrat party's authoritarian drive to control everybody and everything. Child support enforcement will suffer without being able to use an employer as the collection and enforcement agency. This will force many more states to adopt "New Hire Reporting" for independent contractors, which will take years, but that is a small change for employers in return for being able to employ the unvaccinated workers in an era of very high demand for workers.
In short, the Biden administration is at war now not only with many American citizens, but against other parts of its own administration and all the states; not just the red ones.
Who knows what the next internal destructive move will be?
Charles J. Read, CPA, USTCP, president and CEO of GetPayroll.
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