Many employers insist on classifying workers as independent contractors, dodging the need to provide benefits and avoiding payroll taxes. In many cases–when workers are misclassified–this is illegal. When it is not, or when workers are unable or afraid to seek redress, they are forced to fend for themselves without the safety net benefits provide.
Additionally, many workers can only find part-time work—especially since the financial crisis. Over the last few decades, American employers have “relied increasingly on independent contractors, temporary workers, contract employees and freelancers to cut costs.”
doesn’t bargain with employers, but it does address what is by far these workers’ No. 1 concern, by providing them with affordable health insurance. Its health insurance company covers 23,000 workers in New York State and has $105 million in annual revenue. Impressed by that success, the Obama administration recently awarded Ms. Horowitz’s group $340 million in low-interest loans to establish cooperatives in New York, New Jersey and Oregon that will provide health coverage to freelancers and tens of thousands of other workers.
The Union is also running a health clinic in Brooklyn for members. While the lack of collective bargaining is a departure from the traditional functions of unions, the Freelancers Union manages to provide crucial health care for members, who work in a wide variety of industries, at a relatively affordable cost–the Times reports that “premiums range from $225 to $603 a month–40 percent less than individual plans available in New York, according to a comparison by the union.” What’s more, the Union does not charge members’ dues.
The growing success of the project is all the more remarkable for the overall stagnation of organized labor. Its model is in fact a throwback to an earlier era:
Ms. Horowitz’s new mutualism is based on a simple premise: freelancers should band together to set up social-purpose institutions to serve their mutual needs. That, she says, would be far better than relying on corporations and private investors who might have different priorities, not to mention a desire for substantial profits.
This idea, she acknowledges, is not new. But with the changing economy, the decline of organized labor, the end of paternalism among employers and the shrinking role of government, she says, the conditions are ripe for embracing mutual aid societies anew. “The social unionism of the 1920s had it right,” she says. “They said: ‘We serve workers 360 degrees. It’s not just about their work. It’s about their whole life.’ We view things the same way.”
As more and more companies shed full-time workers, projects like the Freelancers’ Union become even more valuable. Unfortunately, many workers paid as independent contractors are in fact employees in every sense except the way they are classified. The Harman Firm fights against misclassification and wage theft every day. Contact us with any questions about employment law.