What Freelancers Should Know About The PRO Act

Jun 7, 2021

Update: As I expected, people have a lot of feelings and opinions on what the PRO Act actually means for freelancers—and not all of those feelings and opinions align. I’m all for getting information from all sides, so I’d encourage you to read all of the replies in this Twitter thread. Plenty of other takes, articles, and resources for you to read through.

As a freelancer, you’ve probably already heard some mutterings (or, perhaps even yelling) about something called the PRO Act.

It’s a hot-button issue for self-employed workers, and as is the case with most pieces of legislation, there’s a lot of confusion and misinformation about what it actually means. As somebody told me on Twitter, the ambiguity is “a feature, not a bug,” which I couldn’t agree more with.

But even so, I feel a sense of responsibility to dig in and try to get some sort of understanding about what the heck is going on. So, that’s what I’m doing here: sharing what the PRO Act is and what I think freelancers should know about it.

But first, a friendly disclaimer…

Before we get into all of that juicy stuff, let me start with my typical disclaimer: I’m not an expert on this. Not even close. I’ve done a lot of research—I’ve read articles, talked to my own small business attorney, and combed through the actual bill in its entirety. Even so, these issues are always complex and overwhelming and I certainly don’t know everything. I’m learning about it right alongside nearly everybody else.

Additionally, since this has to do with legislation it’s obviously…uhh, well…political. It is absolutely never my intention to force my own political beliefs on anybody. My goal is to make this an informative post that answers common questions, rather than to influence and sway your own opinions on the impacts of the bill.

And just so there’s no confusion about where I stand: I’m absolutely in favor of ending exploitative work practices and I fully support fair treatment of all workers.

Whew! With that out of the way, let’s get to the questions.

decorative photo of a desk with a laptop and teapot

What exactly is the PRO Act?

I’m going to try to state everything as plainly as possible—because I can’t stand dense legal language.

The PRO Act is an acronym for the “Protecting the Right to Organize Act.” It’s a piece of legislation that would amend the existing National Labor Relations Act (NLRA) and revise labor laws, primarily with the goal of making it easier for workers of all types (not just full-time, W2 employees) to unionize.

Like most bills, there’s a lot in it—and I’m not even going to try to cover it all. You can read the full bill here if you’re interested, but I’m going to stay narrowly focused on the piece freelancers are most hung up on: the ABC test.

What is the ABC test?

If you’ve heard grumblings and passionate objections to anything within the PRO Act, it’s probably the ABC test. This is a “test” (meaning, three pieces of criteria) that’s included in the PRO Act.

Companies and employers would need to ensure that their independent contractors satisfy all three pieces of criteria (not just one!) in order to be considered an independent contractor in the eyes of the NLRA. That bolded and underlined part is important, and we’ll talk more about what it means in a minute.

Here’s the criteria that independent contractors need to meet, taken directly from the PRO Act:

An individual performing any service shall be considered an employee (except as provided in the previous sentence) and not an independent contractor, unless—

(A) the individual is free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact;

(B) the service is performed outside the usual course of the business of the employer; and

(C) the individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”

It’s “B” that makes a lot of self-employed workers sweat. Essentially, if you perform work that’s similar to your client’s nature of business, then you’d be considered an employee in the eyes of the NLRA (again, bolded because it’s important).

Are you a freelance writer for a publication? That’s the “usual course of the business of the employer,” so you’ll likely be classified as an employee. A graphic designer who works with a lot of marketing agencies? Again, you’ll probably qualify as an employee rather than a freelancer.

alphabet magnets spelling "ABC"

So…does the PRO Act mean the end of freelancing?

Go ahead and wipe your sweaty palms on your pants and swallow the saliva that’s pooled in your mouth, because it’s not time to panic.

Like you, I’ve heard all of the same, “This will destroy freelancers!” cries that you have. I get it—and heck, I even jumped on that bandwagon myself a bit too fast before I had done enough adequate digging.

But, hopefully I can provide a bit of comfort and calm your racing heart: As it stands right now, the PRO Act would apply only through the lens of the NLRA.

Huh? What does that mean? Let’s break this down.

One of the biggest pieces of misinformation about the PRO Act (and the ABC test, specifically) is that it impacts your entire employment classification, much like AB5 did in California. People assume that if you don’t meet all of the independent contractor criteria, then your clients need to make you a W2 employee. And, if they do that, then they have control over your means of working—including where you work, when you work, how you work, and more.

My understanding is that isn’t the case. At least, not yet.

The PRO Act isn’t entirely the same as AB5. You need to look at the ABC test only through the eyes of the NLRA—which, if you remember from the earlier section, is all about protecting workers’ rights to organize and unionize. Nothin’ else.

So, imagine that you’re a freelance writer for a well-known publication. That means you perform a service that isn’t outside the usual course of business (because, duh, you’re a writer for a publication—writing and publishing is what they do).

Now, let’s say that the publication doesn’t treat its staff writers fairly (sadly, we all know that happens way too often), and the full-time staff writers decide to unionize.

Right now, as a freelancer, you wouldn’t be able to support those efforts and join the union. But, if the PRO Act and the ABC test became law, you could because, in the eyes of the NLRA (and only the NLRA), you’re an employee and not an independent contractor.

That’s the gist of what the PRO Act does and what the ABC test is used for. It doesn’t, as many people assume, mean that all of your clients need to make you a W2 employee immediately.

Well, that doesn’t sound so bad…

Okay, so it’s not quite the disastrous, steaming pile of garbage that people have made it out to be. So, does that mean the PRO Act and the ABC test is nothin’ to sweat?

Not quite. There are a couple of reasons I (and other freelancers and self-employed workers, I would think) fear that it could mean bad news:

  • Right now, the ABC test would only change your classification within the NLRA. But, President Biden believes strongly in this legislation—he even campaigned on it. On his own website, you’ll find the following: “As president, Biden will work with Congress to establish a federal standard modeled on the ABC test for all labor, employment, and tax laws.” So, it sounds like the NLRA is just the start and that the ABC test would eventually expand and replace the existing IRS definition of an independent contractor, which is when a lot of those, “The freelance sky is falling!” fears really come into play.

  • Clients could still get scared. Seriously, think about how much confusion is already out there about what the PRO Act means. Freelancers aren’t the only ones scratching their heads—clients are (or will be) too. And do you think they’re going to put up with the hassle and take the time to pick through the bill and understand their new responsibilities and requirements? Probably not. I’d be willing to bet that, in many cases, they’re going to be too intimidated by the new legislation, drop their freelancers, and pull everything in-house to traditional employees. That’s my hunch.

So, my personal opinion is still that the passing of the PRO act with the inclusion of the ABC test could be a detriment to legitimate freelancers and self-employed workers.

Has the PRO Act already passed?

The gears of government grind oh-so-slowly. So no, the PRO Act is not yet a law.

The PRO Act passed the House of Representatives in early March, 2021 with bipartisan support. Next, it heads to the Senate. Many people hypothesize that it doesn’t stand a chance of passing the Senate, but only time will tell.

When will the Senate vote on the PRO Act? At the time of this writing, there’s no official word. I’ll try to stop back and update this post if and when there’s news! In the meantime, does display a handy tracker to show you the progress of the bill.

pencil cup next to a pink alarm clock

What can you do about the PRO Act?

Regardless of where you stand on the issue, you’re more than welcome (heck, encouraged) to vocalize your support or concerns with your own senators. Here’s a list of senators that makes it easy to click through to their websites to find their social media accounts, email addresses, and more. Or, you can use this site to search for your state’s senators and contact them there.

Maybe you’re concerned about the implications of this bill if it passes as-is. I get it—and I also understand how hard it is to balance your own self-centered worries with wanting to support fair treatment of all workers (and the bill does have many worthy provisions for this).

What can you do? You could contact your senator to voice your objection to the PRO Act entirely. However, the more I’ve researched, the more I’ve come across this suggestion: contact your senator and ask for a professional services exemption to the ABC test.

This would essentially exclude professional services workers (writers, designers, developers, etc.—you get it) from the ABC test, but still apply it for workers that really need it. The Authors Guild has thrown its support behind this route and The Freelancers’ Union has also previously said that they don’t support the inclusion of the ABC test.

To summarize, if you’re concerned about the PRO Act passing with the ABC test, here are a couple of steps you can take:

  • Email, call, and tweet your senators to tell them you want the ABC test removed or a professional services exemption added to the ABC test. Don’t be shy—let them know how you feel.

  • Talk with your freelance friends about this! As I said several times, there’s a lot of misinformation, and it’s important that freelancers have as accurate of understanding as possible in order to figure out their own stance and action steps.

Update: Several people on Twitter have pointed out that exemptions can get really messy, and have actually done more harm than good in California. So, as with anything, no perfect solutions here.

A few other helpful PRO Act resources

Alright, that’s what I’ve got for you—answers to as many burning questions about the PRO Act that I could come up with.

Like I said, I’m certainly not an expert. And the good news is that plenty of people who are way smarter than me have dug into this topic in detail. Let’s cap this off with some other helpful resources you can peruse to get a firm and accurate grasp on the PRO Act:

Have more questions about the PRO act? A different take? Other resources I should know about? Drop them below.