[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] FUTURE OF WORK: PRESERVING WORKER PROTECTIONS IN THE MODERN ECONOMY ======================================================================= JOINT HEARING BEFORE THE SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS AND THE SUBCOMMITTEE ON WORKFORCE PROTECTIONS OF THE COMMITTEE ON EDUCATION AND LABOR U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION __________ HEARING HELD IN WASHINGTON, DC, OCTOBER 23, 2019 __________ Serial No. 116-45 __________ Printed for the use of the Committee on Education and Labor [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: www.govinfo.gov or Committee address: https://edlabor.house.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 39-488 PDF WASHINGTON : 2022 ----------------------------------------------------------------------------------- COMMITTEE ON EDUCATION AND LABOR ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman Susan A. Davis, California Virginia Foxx, North Carolina, Raul M. Grijalva, Arizona Ranking Member Joe Courtney, Connecticut David P. Roe, Tennessee Marcia L. Fudge, Ohio Glenn Thompson, Pennsylvania Gregorio Kilili Camacho Sablan, Tim Walberg, Michigan Northern Mariana Islands Brett Guthrie, Kentucky Frederica S. Wilson, Florida Bradley Byrne, Alabama Suzanne Bonamici, Oregon Glenn Grothman, Wisconsin Mark Takano, California Elise M. Stefanik, New York Alma S. Adams, North Carolina Rick W. Allen, Georgia Mark DeSaulnier, California Lloyd Smucker, Pennsylvania Donald Norcross, New Jersey Jim Banks, Indiana Pramila Jayapal, Washington Mark Walker, North Carolina Joseph D. Morelle, New York James Comer, Kentucky Susan Wild, Pennsylvania Ben Cline, Virginia Josh Harder, California Russ Fulcher, Idaho Lucy McBath, Georgia Van Taylor, Texas Kim Schrier, Washington Steve Watkins, Kansas Lauren Underwood, Illinois Ron Wright, Texas Jahana Hayes, Connecticut Daniel Meuser, Pennsylvania Donna E. Shalala, Florida Dusty Johnson, South Dakota Andy Levin, Michigan* Fred Keller, Pennsylvania Ilhan Omar, Minnesota Gregory F. Murphy, North Carolina David J. Trone, Maryland Haley M. Stevens, Michigan Susie Lee, Nevada Lori Trahan, Massachusetts Joaquin Castro, Texas * Vice-Chair Veronique Pluviose, Staff Director Brandon Renz, Minority Staff Director ------ SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS FREDERICA S. WILSON, Florida, Chairwoman Donald Norcross, New Jersey Tim Walberg, Michigan Joseph D. Morelle, New York Ranking Member Susan Wild, Pennsylvania David P. Roe, Tennessee Lucy McBath, Georgia Rick W. Allen, Georgia Lauren Underwood, Illinois Jim Banks, Indiana Haley M. Stevens, Michigan Russ Fulcher, Idaho Joe Courtney, Connecticut Van Taylor, Texas Marcia L. Fudge, Ohio Steve C. Watkins, Jr., Kansas Josh Harder, California Ron Wright, Texas Donna E. Shalala, Florida Dan Meuser, Pennsylvania Andy Levin, Michigan Dusty Johnson, South Dakota Lori Trahan, Massachusetts Fred Keller, Pennsylvania Vacant SUBCOMMITTEE ON WORKFORCE PROTECTIONS ALMA S. ADAMS, North Carolina, Chairwoman Mark DeSaulnier, California Bradley Byrne, Alabama, Mark Takano, California Ranking Member Pramila Jayapal, Washington Mark Walker, North Carolina Susan Wild, Pennsylvania Ben Cline, Virginia Lucy McBath, Georgia Ron Wright, Texas Ilhan Omar, Minnesota Gregory F. Murphy, North Carolina Haley M. Stevens, Michigan C O N T E N T S ---------- Page Hearing held on October 23, 2019................................. 1 Statement of Members: Adams, Hon. Alma S., Chairwoman, Subcommittee on Workforce Protections................................................ 6 Prepared statement of.................................... 7 Byrne, Hon. Bradley, Ranking Member, Subcommittee on Workforce Protections...................................... 73 Prepared statement of.................................... 74 Walberg, Hon. Tim, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions............................ 4 Prepared statement of.................................... 5 Wilson, Hon. Frederica S., Chairwoman, Subcommittee on Health, Employment, Labor, and Pensions.................... 1 Prepared statement of.................................... 3 Statement of Witnesses: Beck, Ms. Jessica, Co-Founder and COO Hello Alfred........... 58 Prepared statement of.................................... 61 Greszler, Ms. Rachael, Research Fellow in Economics, Budget and Entitlements, the Heritage Foundation.................. 43 Prepared statement of.................................... 46 Rogers, Mr. Brishen, J.D., Associate Professor, Temple School of Law, Visiting Associate Professor, Georgetown University Law Center, Fellow, Roosevelt Institute.................... 25 Prepared statement of.................................... 28 Weil, Mr. David, Ph.D, Dean and Professor, the Heller School for Social Policy and Management, Brandeis University...... 9 Prepared statement of.................................... 11 Additional Submissions: Jayapal, Hon. Pramila, a Representative in Congress from the State of Washington: Policy Brief: Protecting Domestic Workers' Rights........ 101 Prepared statement from SEIU............................. 103 Link: Beyond Disruption, How Tech Shapes Labor Across Domestic Work and Ride Hailing......................... 104 Questions submitted for the record by: Scott, Hon. Robert C. ``Bobby'', a Representative in Congress from the State of Virginia.................... 105 Mr. Weil's response to questions submitted for the record.... 107 FUTURE OF WORK: PRESERVING WORKER PROTECTIONS IN THE MODERN ECONOMY ---------- Wednesday, October 23, 2019 House of Representatives, Subcommittee on Health, Education, Labor, and Pensions Joint with the Subcommittee on Workforce Protections, Committee on Education and Labor, Washington, D.C. ---------- The subcommittee met, pursuant to call, at 10:18 a.m., in Room 2175, Rayburn House Office Building. Hon. Frederica S. Wilson (Chairwoman of the subcommittee) presiding. Present: Representatives Wilson, Adams, Courtney, DeSaulnier, Norcross, Jayapal, Morelle, Wild, Harder, Underwood, Shalala, Levin, Stevens, Trahan, Walberg, Byrne, Roe, Cline, Taylor, Johnson. Also Present: Representatives Scott and Foxx. Staff Present: Tylease Alli, Chief Clerk; Jordan Barab, Senior Labor Policy Advisor; Ilana Brunner, General; Kyle deCant, Labor Policy Counsel; Daniel Foster, Health and Labor Counsel; Eli Hovland, Staff Assistant; Eunice Ikene, Labor Policy Advisor; Stephanie Lalle, Deputy Communications Director; Kevin McDermott, Senior Labor Policy Advisor; Richard Miller, Director of Labor Policy; Max Moore, Office Aid; Udochi Onwubiko, Labor Policy Counsel; Veronique Pluviose, Staff Director; Banyon Vassar, Deputy Director of Information Technology; Katelyn Walker, Counsel; Rachel West, Senior Economic Policy Advisor; Cyrus Artz, Minority Parliamentarian; Courtney Butcher, Minority Director of Member Services and Coalitions; Akash Chougule, Minority Professional Staff Member; Cate Dillon, Minority Staff Assistant; Rob Green, Minority Director of Workforce Policy; Jeanne Kuehl, Minority Legislative Assistant; Hannah Matesic, Minority Director of Operations; Ben Ridder, Minority Professional Staff Member; and Lauren Williams, Minority Professional Staff Member. Chairwoman Wilson. The Subcommittees on Health, Employment, Labor, and Pensions and Workforce Protections will come to order. Welcome, everyone. I note that a quorum is present. The subcommittees are meeting today in a hearing to receive testimony on the future of work and preserving worker protections in the modern economy. Pursuant to Committee Rule 7(c), opening statements are limited to the Chairs and the Ranking Members. This allows us to hear from our witnesses sooner and provides all Members with adequate time to ask questions. I recognize myself now for the purpose of making an opening statement. Today we are gathered for the first of three hearings to explore the future of work. This series of hearings will provide an opportunity for experts and stakeholders to share how evolving business models and rapidly changing employment arrangements coupled with increased use of technology and automation are impacting workers and employers. We look forward to hearing ideas on policy options that ensure innovation, complements worker protections, civil rights, and economic security. Today's hearing will focus on how Congress can ensure that workers have fair wages, hours and benefits, safe work places, and an opportunity to bargain for better working conditions at a time when American work places are rapidly shifting. For most of the 20th century, companies primarily hired workers directly but over the last three decades, there have been a fissuring of the workplace where companies are increasingly shifting employment to subcontractors, temporary workers, or workers misclassified as independent contractors. The most visible example of the fissured workplace can be found in the on-demand economy where some companies misclassify their workers as independent contractors. The employment relationship is key to our nations'Nation's foundational labor and employment laws. And the erosion of this relationship threatens to not only undermine our nation's labor laws but to also erode the progress we have made towards a strong, American middle class. That is why preventing worker misclassification and strengthening and maintaining joint employment standards are key to ensuring that workers have access to legal protections and can exercise their rights. For example, in my district in Miami, Florida, a large swath of workforce is subcontracted or temporary workers who are hired to support the large tourism, hospitality, and health industries. These workers who are the backbone to multiple, billion- dollar industries are currently limited to their abilities to collectively bargain and advocate for themselves. In most cases, workers are forced, are being forced to work in extremely unsafe conditions. A full revamp of workers' protections is necessary to ensure safer working conditions and better benefits. The right to organize as the law currently stands does not empower our constituents to harness their true economic potential. The Protecting the Right to Organize Act we call the PRO Act which we recently advanced through this committee, would strengthen joint employment standards under the National Labor Relations Act to ensure that workers can bring to the negotiating table all of the companies that have a say in the terms and conditions of employment. The PRO Act would also broaden the NLRA's employment standards to prevent workers from being misclassified as independent contractors and thereby deny their rights to organize and collectively bargain. Now that the PRO Act has advanced through our committee, we must continue our discussion for ways to complement and strengthen our current labor laws. Today, we will examine whether or not bargaining can be used to establish the industry wide floors that prevent individual employers from undercutting wages and working additions in order to compete. I also look forward to a discussion about how to ensure benefits provided to workers in the fissured workplace, truly achieve meaningful improvements for workers. Innovation is not compatible with collective bargaining rights or good work place benefits. Congress has a responsibility to ensure that the changing economy does not undermine the rights of American workers. Today's hearing is an important step towards shaping the future of work that facilities innovation and growth while preserving the worker protections and benefits that held from the core of American prosperity. I would like to thank our witnesses for joining us today and I now recognize HELP Ranking Member Walberg for an opening statement. Mr. Walberg. [The statement of Ms. Wilson follows:] Prepared Statement of Hon. Frederica S. Wilson, Chairwoman, Subcommittee on Health, Employment, Labor, and Pensions Today, we are gathered for the first of three hearings to explore the ``future of work.'' This series of hearings will provide an opportunity for experts and stakeholders to share how evolving business models and rapidly changing employment arrangements, coupled with increased use of technology and automation, are impacting workers and employers. We look forward to hearing ideas on policy options that ensure innovation complements worker protections, civil rights, and economic security. Today's hearing will focus on how Congress can ensure that workers have fair wages, hours and benefits; safe workplaces; and an opportunity to bargain for better working conditions at a time when American workplaces are rapidly shifting. For most of the 20th century, companies primarily hired workers directly. But over the last three decades, there has been a ``fissuring'' of the workplace where companies are increasingly shifting employment to subcontractors, temporary workers, or workers misclassified as independent contractors. The most visible example of the fissured workplace can be found in the on-demand economy, where some companies misclassify their workers as independent contractors. The employment relationship is key to our nation's foundational labor and employment laws, and the erosion of this relationship threatens to not only undermine our nation's labor laws, but to also erode the progress we've made toward a strong American middle class. That is why preventing worker misclassification and strengthening and maintaining joint employment standards are key to ensuring that workers have access to legal protections and can exercise their rights. For example, in my district in Miami, Florida, a large swath of the workforce is subcontracted or temporary workers who are hired to support the large tourism, hospitality, and health industries. These workers who are the backbone to multiple billion-dollar industries are currently limited in their abilities to collectively bargain and advocate for themselves. In some cases, workers are being forced to work in extremely unsafe conditions. A full revamp of worker protections is necessary to ensure safer working conditions and better benefits. The right to organize as the law currently stands does not empower our constituents to harness their true economic potential. The Protecting the Right to Organize Act, which we recently advanced through this committee, would strengthen joint employment standards under the National Labor Relations Act to ensure that workers can bring to the negotiating table all of the companies that have a say in the terms and conditions of employment. The PRO Act would also broaden the NLRA's employment standard to prevent workers from being misclassified as independent contractors and thereby denied their rights to organize and collectively bargain. Now that the PRO Act has advanced through our committee, we must continue our discussion for ways to complement and strengthen our current labor laws. Today we will examine whether or not sectoral bargaining can be used to establish industry-wide floors that prevent individual employers from undercutting wages and working conditions in order to compete. I also look forward to a discussion about how to ensure benefits provided to workers in the fissured workplace truly achieve meaningful improvements for workers. Innovation is not incompatible with collective bargaining rights or good workplace benefits. Congress has a responsibility to ensure that the changing economy does not undermine the rights of American workers. Today's hearing is an important step toward shaping a future of work that facilitates innovation and growth while preserving the worker protections and benefits that help form the core of American prosperity. I would like to thank our witnesses for joining us. ------ Mr. Walberg. Thank you, Madame Chair. Today we are here to discuss the future of work. Madame Chair, I vote in favor of the future of work. It is a good thing. And so it is worth moving forward. But with the ever-evolving economic landscape which in fact is pretty good right now, the lowest unemployment rate for all sectors or at least most all sectors in history, at least in the last 50 plus years, and the increased wage for middle class expansions taking place the landscape is pretty good. It is an important issue though for us to consider. Yet I find it ironic given committee Democrats recently passed radical legislation, the PRO Act that would take our labor laws back to the 1930's. My colleagues across the aisle seem to feel that they believe that forcing workers into labor unions is the only way to ensure proper wages and benefits. So Federal law should promote unions, even at the expense of workers own rights and freedoms and choices. Democrat's ultimate goal, it appears, is to all but eliminate independent contractor status, classifying as many workers as possible as employees in order to subject them to unionization. Labor union membership continues to plummet due the modern economic growth and unions own failings. Instead of increasing transparency and accountability to serve their members better, union leaders are exerting their political influence to push backward looking radical labor laws that would allow them to consolidate power, further coerce workers, line their own pockets, and bolster their own agendas while depriving workers of freedom, flexibility, and innovation in the work place. It appears the Democrat's reforms would take us back to the past while harming workers, businesses and the economy as a whole at a time when economic growth and innovation are creating real progress and prosperity for American workers. That is why committee Democrats recently approved H.R. 2474, far reaching legislation which limits the rights of workers to make free and informed decisions. This is not what the future of work in America should look like or needs to look like. There is nothing progressive about what will be discussed during this hearing. Instead of considering unworkable policies that will harm workers and businesses, we should be discussing ways to encourage flexible work arrangements and access to employer sponsored benefits without creating costly and restrictive mandates. These are the kind of reforms necessary to adapt our laws for the future of work. For example, multi-employer plans should allow small employers to join together to sponsor a single retirement plan for employees which would significantly reduce costs for employers who might not otherwise be able to afford offering retirement benefits. Additionally, committee Republicans have long championed the expansion association health plans which allow small businesses to join together to provide their employees with high quality healthcare at more affordable costs. These are just two examples of innovative reforms that meet the needs of a 21st century workforce. American workers are benefiting from a strong economy ushered in by Republican led tax and regulatory reform. Wages are rising. Unemployment is near record lows. And millions of jobs have been created since President Trump took office. Individual freedom and pro-growth economic policies create the best path forward for workers and job seekers, not more coercion and red tape. That is what I believe, Madame Chair. I am going got stick to it, but I look forward to participating in this hearing and I yield back. [The statement of Mr. Walberg follows:] Prepared Statement of Hon. Tim Walberg, Ranking Member, Subcommittee on Health, Employment, Labor, and Pensions Today, we are here to discuss the future of work. With the ever- evolving economic landscape, it is an important issue for us to consider. Yet I find it ironic given Committee Democrats recently passed radical legislation that would take our labor laws back to the 1930s. My colleagues across the aisle believe that forcing workers into labor unions is the only way to ensure proper wages and benefits, so federal law should promote unions even at the expense of workers' own rights and freedoms. Democrats' ultimate goal is to all but eliminate independent-contractor status, classifying as many workers as possible as employees in order to subject them to unionization. Labor union membership continues to plummet due to the modern economy, economic growth, and unions' own failings. Instead of increasing transparency and accountability to serve their members better, union leaders are exerting their political influence to push backward-looking radical labor laws that would allow them to consolidate power further, coerce workers, line their own pockets, and bolster their own agendas while depriving workers of freedom, flexibility, and innovation in the workplace. The Democrats' reforms would take us back to the past while harming workers, businesses, and the economy as a whole at a time when economic growth and innovation are creating real progress and prosperity for American workers. That is why Committee Democrats recently approved, H.R. 2474, far- reaching legislation which limits the rights of workers to make free and informed decisions. This is not what the future of work in America should look like. There is nothing `progressive' about what will be discussed during this hearing. Instead of considering unworkable policies that will harm workers and businesses, we should be discussing ways to encourage flexible work arrangements and access to employer-sponsored benefits without creating costly and restrictive mandates. These are the kind of reforms necessary to adapt our laws for the future of work. For example, multiple-employer plans should allow small employers to join together to sponsor a single retirement plan for employees, which would significantly reduce costs for employers who might not otherwise be able to afford offering retirement benefits. Additionally, Committee Republicans have long championed the expansion of association health plans, which allow small businesses to join together to provide their employees with high-quality health care at more affordable costs. These are just two examples of innovative reforms that meet the needs of a 21st century workforce. American workers are benefitting from the strong economy ushered in by Republican-led tax and regulatory reform. Wages are rising, unemployment is at near-record lows, and millions of jobs have been created since President Trump took office. Individual freedom and pro- growth economic policies create the best path forward for workers and job-seekers, not more coercion and red tape. ------ Chairwoman Wilson. Thank you, Mr. Walberg. I now recognize Workforce Protection Subcommittee Chair Adams for an opening statement Ms. Adams. Thank you, Madame Chairwoman Wilson and thank you to the witnesses for being here today. The foundation Federal protections for workers including fair wages, reasonable hours, and safe work places are grounded in two key employment laws. The Fair Labor Standards Act and the Occupational Health and Safety Act. These landmark laws were passed when the overwhelming number of workers and employers were connected through traditional, direct relationships. An employee could tell who their employer was by looking at the name of the building where they worked but as the relationship between workers and employers is changing, the protections provided by our key labor employment laws are eroding. For example, the rising trend of working misclassification in which a worker who should be an employee under the law is as an independent coordinator is undermining the Fair Labor Standards Act. When employees are misclassified, employers are able to strip workers of minimum wage and overtime protections and gain an unfair, competitive advantage by classing them as independent contractors. Similarly, the lack of clarity in work arrangements can undermine the safety of workers because there is less certainty about who is responsible for supplying safety equipment and safety training. This adds risks for temporary and contract workers who are twice as likely to die from falls than workers in traditional employment according to Labor Department data. And workers who are misclassified do not have protections under Federal whistleblower laws including the anti-retaliation provisions of the Occupational Safety and Health Act and other whistleblower laws overseen by OSHA. As our witnesses will discuss today, we don't have to choose between strengthening and modernizing protections for American workers or building a vibrant and modern economy. Without innovation, workers and businesses may lose out on opportunities to succeed. But without a strong and sustained effort from Federal policy makers, the changing relationship between workers and employers and the emergence of new business models and new technology will continue to erode the financial security and safety of America's workers. We can have an economy that values workers and an economy where business can succeed. Proposals we have previously discussed in this committee including the Payroll Fraud Prevention Act would be important steps in the right direction. All of us agree that the foundational labor and employment laws are outdated in the modern economy. So the question at the heart of today's hearing is whether we will update and strengthen those protections or further weaken them. The future of work will be determined by our answer to that question. I yield back, Madame Chair. [The statement by Chairwoman Adams follows:] Prepared Statement of Hon. Alma S. Adams, Chairwoman, Subcommittee on Workforce Protections Thank you, Madame Chairwoman Wilson. The foundational federal protections for workers -including fair wages, reasonable hours, and safe workplaces - are grounded in two key employment laws: The Fair Labor Standards Act and the Occupational Health and Safety Act. These landmark laws were passed when the overwhelming number of workers and employers were connected through traditional, direct relationships. An employee could tell who their employer was by looking at the name on the building where they worked. But as the relationship between workers and employers is changing, the protections provided by our key labor employment laws are eroding. For example, the rising trend of worker misclassification - in which a worker who should be an employee under the law is as an independent contractor - is undermining the Fair Labor Standards Act. When employees are misclassified, employers are able to strip workers of minimum wage and overtime protections and gain an unfair competitive advantage by classifying them as independent contractors. Similarly, the lack of clarity in work arrangements can undermine the safety of workers, because there is less certainty about who is responsible for supplying safety equipment and safety training. This adds risk for temporary and contract workers, who are twice as likely to die from falls than workers in traditional employment, according to Labor Department data. And workers who are misclassified do not have protections under federal whistleblower laws, including the anti- retaliation provisions of the Occupational Safety and Health Act and other whistleblower laws overseen by OSHA. As our witnesses will discuss today, we don't have to choose between strengthening and modernizing protections for American workers or building a vibrant, modern economy. Without innovation, workers and businesses may lose out on opportunities to succeed. But without a strong and sustained effort from federal policymakers, the changing relationship between workers and employers - and the emergence of new business models and new technology - will continue to erode the financial security and safety America's workers. We can have an economy that values workers and an economy where business can succeed. Proposals we've previously discussed in this Committee, including the Payroll Fraud Prevention Act, would be important steps in the right direction. All of us agree that the foundational labor and employment laws are outdated in the modern economy. The question at the heart of today's hearing is whether we will update and strengthen those protections or further weaken them. The ``future of work'' will be determined by our answer to that question. I yield back. ------ Chairwoman Wilson. Thank you, Chair Adams. The Ranking Member of workforce protections, Member Byrne, will join us later, he is unable to be with us now and we will be, he will be able to give his opening statement. Without objection, all other Members who wish to insert written statements into the record may do so by submitting them to the Committee Clerk electronically in Microsoft Word format by 5 p.m. on November 5, 2019. I will now introduce our witnesses. David Weil is the Dean and Professor of the Heller School for Social Policy and Management at Brandeis University. Mr. Weil serves as the administrator of the Wage and Hour Division of the U.S. Department of Labor under President Barack Obama from 2014 to January 2017. Welcome. Brishen Rogers is an associate professor of Law at Temple University School of Law, at Temple University Beasley School of law and a Fellow at the Roosevelt Institute. Professor Rogers' research focuses on labor and employment, concentrating on how the law shapes workers collective action, the impact of technology on employment practices, and the relationship between law and inequality. Rachel Greszler is a Research Fellow in Economics, Budgets, and Entitlements at the Heritage Foundation. Ms. Greszler provides research and commentary on workplace issues including Federal employee compensation, women's issues, and labor policies such as minimum wage and paid family leave. Jessica Beck is a co-founder and Chief Operating Officer of Hello Alfred, a technology and residential service company that is changing the way people live in cities by integrating help directly into the home through a combination of technology, smart data, logistics, and high touch hospitality. Ms. Beck and her cofounder, Marcela Sapone built a service-based business that assists households in more than 20 cities across the United States. I appreciate all of the witnesses being here today and we all look forward to your testimony. Let me remind the witnesses that we have read your written statements and they will appear in full in the hearing record. Pursuant to Committee Rule 7(d) and committee practice, each of you is asked to limit your oral presentation to a 5- minute summary of your written statement. Let me also remind the witnesses that pursuant to Title 18 of the U.S. Code, Section 1001, it is illegal to knowingly and willfully falsify any statement, representation, writing, document, or material fact presented to Congress or otherwise conceal or cover up a material fact. Before you begin your testimony, please remember to press the button on the microphone in front of you so that it will turn on and the Members can hear you. As you begin to speak, the light in front of you will turn green. After 4 minutes the light will turn yellow to signal that you have one minute remaining. When the light turn's red, your 5 minutes have expired, and we ask that you please wrap it up. We will let the entire panel make their presentation before we move to Member questions. When answering a question, please remember to once again turn your microphone on. I will first recognize Dr. Weil. Welcome. TESTIMONY OF DAVID WEIL, Ph.D., DEAN AND PROFESSOR, THE HELLER SCHOOL FOR SOCIAL POLICY AND MANAGEMENT, BRANDEIS UNIVERSITY Mr. Weil. Thank you, Chair Wilson, Chair Adams, Ranking Member Walberg, Ranking Member Byrne and Members of the subcommittees. My name is David Weil and I am the Dean of the Heller School for Social Policy and Management at Brandeis University. And I did have the honor of serving as President Obama's Administrator of the Wage and Hour Division of U.S. Department of Labor from 2014 to 2017 when I had the honor of appearing before this committee on several occasions. I offer these comments regarding the topic of today's hearing informed by my past and ongoing academic research as well as my experience as the head of the Federal agency in charge of enforcing our most basic labor standards. We can understand the future of work by understanding the present of work. In the past few years there have been innumerable conferences and convenings on the future of work. These meetings typically focus on issues like robotics, artificial intelligence, and platform or gig business models like Uber and Lyft. But gig work is currently estimated to affect a very small part of our labor force. And speculations on the impact of technology in the past have often proven to be off the mark. A focus on changes that are already impacting working people and will continue to do so in my view is far more useful. Millions of workers in the U.S. have jobs that don't pay enough, provide few if any benefits, and lack basic workplace protections we once took for granted. Most relevant here, employers have moved away from a traditional employment model and towards greater reliance on outsourcing, contracting and subcontracting, franchising in its many forms, and most recently platform business models. This change that has been described by the subcommittee chairs represents both the present and the future structure of work and is what I have termed the fissured workplace. The fissured workplace model has allowed employers to shift risks and responsibility onto workers and has incentivized the misclassification of employees as independent contractors. We cannot understand policy solutions without understanding the way we got here, which I have outlined in detail in my written testimony and academic writings. The fissured workplace has social and economic consequences for workers. As you move downward in a fissured workplace structure, incentives to cut corners rise leading to violations of our fundamental labor and employment standards such as the minimum wage, overtime, or even the basic concept that people should be paid for the work they do. For a family struggling to get by the typical losses are rising from these violations translate to more than 5 weeks of groceries, a month of rent, or 5 weeks of childcare. Different forms of workplace fissuring can also undermine providing workers safe and helpful workplaces. Compared to their employee counterparts, independent works have a disproportionately higher chance of injury or death. Because of its concentration particularly in low wage sectors, the fissured workplace significantly impacts people of color and women and compounds the historic and systemic disparities that have faced them in the workplace. And the fissured workplace is prevalent throughout the economy. The impact of fissuring on wage and hourly structures of the economy is sizable. My conservative estimate of workers operating in highly fissured industries says we have over 23 million workers or about 19 percent of the private sector workforce. If we consider the additional workers and occupations in industries with partial presence of fissured practices, my estimate of its prevalence would exceed 35 percent. It is therefore essential that our public policies address fissuring. Our policies need to provide rights and protections for workers in this increasingly challenging environment. My colleague Tonya Goldman and I outlined a proposal to provide basic protections to workers, employees, and independent contractors in ways that recognize changes in the workplace that I have described. We do so by defining three concentric circles of workplace rights and protections. An inner circle would assure fundamental rights like receiving minimum payment for work, provision of a safe and helpful workplace and protections against retaliation for use of rights guaranteed to all workers regardless of employment status. A middle circle would provide employee rights and protections emanating from a clear and consistent definition of employment. And finally, an outer circle would provide access to safety net benefits like unemployment insurance and workers compensation and non-mandatory benefits like retirement. But laws are only as good as our ability to enforce them. When I led the Wage and Hour Division it had 1,000 investigators in the field even though the agency had responsibility for 7.3 million establishments. Enforcement agencies need sufficient number of investigator and tools to do their work. New technology-- [The statement of Mr. Weil follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you Dr. Weil. Mr. Weil. Thank you. Chairwoman Wilson. Thank you. We will now recognize Professor Rogers. Welcome. TESTIMONY OF BRISHEN ROGERS, J.D., ASSOCIATE PROFESSOR, TEMPLE SCHOOL OF LAW, VISITING ASSOCIATE PROFESSOR, GEORGETOWN UNIVERSITY LAW CENTER; FELLOW, ROOSEVELT INSTITUTE Mr. Rogers. Madame Chair Wilson, Madame Chair Adams, Ranking Members Walberg and Byrne, and Members of the subcommittees, thank you for this opportunity to testify today. My name is Brishen Rogers. As the chair said I'm a professor at Temple University Beasley School of Law and a Fellow at the Roosevelt Institute. I'm also currently a visiting Associate Professor at Georgetown University Law Center. I'm here in my individual capital, not representing an organization. I have been asked to discuss two issues related to the present and future of work. The first is whether to reform our labor laws to encourage more centralized forms of bargaining and standard setting. The backdrop here is that an important goal of unions and public policy is to take wages out of competition to prevent a race to the bottom. This is good both for workers and for responsible employers. But our labor law today makes it quite difficult by encouraging enterprise level bargaining or bargaining at the individual worksite or firm. Now unions have worked around this when possible. The UAW's pattern bargaining strategy is a great example. But it's very hard to do in today's economy in part for reasons that my colleague, Dr. Weil, just mentioned. To illustrate consider how fast food works might try to build a pattern bargaining structure today. They'd first have to organize one McDonald's restaurant at a time. Now the PRO Act would make it much easier for them to do so. That's essential but it's arguably not enough. In order to get to scale they would have to organize the individual restaurants and then merge them into a lager bargaining unit. Franchisees could refuse to enter that units and whether or not McDonalds is an employer of the workers at issue will determine whether it needs to be a part of the unit. Even if the workers succeed in building a nationwide unit of McDonalds workers, they would have to do that with all of the company's competitors. That's effectively impossible today. Enterprise bargaining is quite unusual in comparative perspective. In continental Europe, collective bargaining typically involves unions and employer associations that negotiate agreements across entire industrial sectors. There is a significant amount of evidence that those practices encourage both more economic equality and they protect responsible employers against unfair competition without having negative effects on economic performance. We could draw lessons from those systems and from our own history to develop more centralized forms of bargaining or standard setting. I'll say just a tiny bit about how we could potentially do that. One option would be for Congress to amend the Fair Labor Standards Act to create industry committees or wage boards with the power to set minimum terms at the sectoral level. We did this under the Fair Labor Standards Act as originally passed. The committees could have equal members of representatives of employers and workers, could take public testimony, deliberate and recommended minimum terms for the sector to the Department of Labor. As an alternative or a supplement, Congress could revise the NLRA to enable true sectoral bargaining or bargaining between unions and firms across a sector. Now, it would be unwise to simply substitute sectoral bargaining for enterprise bargaining. But Congress could for example mandate or encourage multi-employer bargaining. It could also enable unions who are organized or who have organized at the enterprise level to also negotiate at the sectoral level, perhaps by granting bargaining rights in stages based upon the amount of support a union has within the relevant sector. I would be happy to discuss details of either of these ideas in the Q and A. I'll note though that both of them would ideally supplement and bolster enterprise bargaining rather than replacing it. Enterprise bargaining still has to be the foundation of an industrial relation system in this country. The second issue I have been asked to disuses is the idea of portable benefits. The developments that I noted earlier and those discussed by Dr. Weil have also eroded employees' or workers' access to benefits. One reason is that our laws require companies to provide benefits to employees in many instances but not to independent contractors or to employees of their subcontractors. A number of gig economy companies and think tanks have proposed that we put together, enact safe harbors which would allow them to provide benefits to their workers without the risk that they would then be classified as those workers' employers. I'm not sure this is the best way to protect workers today for two basic reasons. The first is that Uber, Lyft, and many other gig economy companies today, arguably already employ their workers under current law because they exert so much control over them. They would almost certainly be their employers under the PRO Act and they are almost certainly their employers under California's AB5. That means those companies already have duties to provide many of those workers benefits and carving out a safe harbor would enable them to evade rather than uphold that duty. Second, and here I'll wrap up, we have models for portable benefits that would protect workers. Construction workers frequently move between employers and long ago they built portable benefit funds that are co-managed by unions. Social security and Medicare are also portable in that they are provided and administered by public agencies. The best option for workers will like be-- Chairwoman Wilson. Thank you. Mr. Rogers.--benefits that are collectively bargained or publicly provided. Thank you. [The statement of Mr. Rogers follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you very much. Thank you. We will now recognize Ms. Greszler. Welcome. TESTIMONY OF RACHEL GRESZLER, RESEARCH FELLOW IN ECONOMICS, BUDGET AND ENTITLEMENTS, THE HERITAGE FOUNDATION Ms. Greszler. Good morning and thank you for the opportunity to testify today. My name is Rachel Greszler and I am a Research Fellow at the Heritage Foundation. The views exposed today are my own and don't necessarily represent those of Heritage. The future of work is already here and it's not something that workers need to fear. But policy makers can help workers prepare for, adjust to, and thrive amidst these changes. One of workers biggest fear against the future of work is that they might lose their jobs. And this is a legitimate concern because without a job, workers cannot provide for themselves and their family and they have no hope for higher income and opportunity. That's why today's 50 year record low unemployment rate is so commendable. And because of the recent tax cuts and reduced regulatory burdens, workers are experiencing widespread income gains with low income workers receiving the biggest gains. But some lawmakers seem determined to stop this with the types of interventionist policies described thus far today. By fighting against innovation, opportunity, and choices, we will reduce workers incomes and short change our entire economy. Technological advancements naturally eliminate some jobs. But they also give rise to new jobs and astonishing new products and services. Imagine what workers in the ice industry thought when the refrigerator came to market. All of those jobs cutting ice, moving snow, transporting and delivering it disappeared. But instead of becoming destitute, those workers found new jobs and most of those new jobs made them more productive. So change creates opportunities and todays workers have opportunities to earn supplemental income, to be their own bosses, and to interact with a more diverse group of individuals and businesses. So called independent work used to be reserved for highly educated individuals such as lawyers and consultants. But today, it's available to nearly all Americans and as many as 1 out of every 3 workers participates in independent work in some capacity. And nearly all of them, 9 out of 10 say they prefer being their own boss to being an employee. But instead of more autonomy, many law makers want to control workers and employers though policies that will lead to fewer jobs, lower incomes, and more--and less opportunity. Consider the $15 minimum wage passed by the House this summer. When California raised their minimum wage, Muriel Sterling who owns her own family daycare in Oakdale, California, had to reduce some of her workers hours and she had to raise tuition costs which made it harder for families to be able to afford childcare. And when Michigan increased its minimum wage, Pastor Jack Mosely explained that his faith-based recovery program had to close its Taste of Life restaurant leaving the programs 12 participants without jobs or quote the opportunity interact with other employees and to talk to customers and feel like they were part of something. Sadly, disadvantaged and inexperienced workers are the first to lose their jobs when high minimum wages create survival of the fittest labor markets. Then there is the Protecting the Right to Organize Act advanced by this committee which would overturn three Supreme Court cases, strip 27 states of their right to work laws, and upend the gig economy as well as franchising and contract-based employment models. For starters, the PRO Acts pro union, anti-worker provisions would strip workers of basic democratic rights. Now as Americans we may not always support the political candidates that get elected but at least we are not support--forced to make financial contributions to them or stripped of our rights to a secret ballot election. Nor would one candidate ever be prohibited from talking about the other candidate's policies. But that's what the PRO Act wants for the workplace. The PRO Act would also hurt a lot of workers by changing the definition of employee. This past summer, my family had the blessing of being able to help a refugee family that had first become jobless and then homeless. Were it not for a temporary job agency that helped this father to obtain work within days of requesting it, that family would not be living in their own home today. Instead of regressive policies, lawmakers can help workers adapt to and thrive in today's labor market by reducing taxes and unnecessary regulations, by advancing choice based portable and affordable benefits, and by giving workers choices over how they work, who they work for, and if they want union representation. Policy makers have two options. Help employers and employees respond to the changing nature of work or try to prevent those changes from happening. The former leads to progress and higher incomes and opportunities for all while the latter benefits a select few with a smaller economy for everyone. Thank you. [The statement of Ms. Greszler follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you, Ms. Greszler. We will now recognize Ms. Beck. Welcome. TESTIMONY OF JESSICA BECK, CO-FOUNDER AND COO, HELLO ALFRED Ms. Beck. Good morning. Thank you for the opportunity to share my perspective on the important topic of the future of work. My name is Jessica Beck and I am the Chief Operating Officer of Hello Alfred, a tech enabled service company I cofounded 5 years ago that's changing the way people live in cities by building help directly into the home. Today I would like to share with you our experience as a tech enabled service company that intentionally chose a W-2 employee model. 5 years ago, my cofounder, Marcela Sapone, and I, launched our business founded on a simple idea. Let's give people back their time. Through our app, we offer our customers the ability to request help with anything they need from groceries delivered directly into their fridge to pet care, clothing care, handyman services, and more. We deliver against these needs through our Alfred Home manager staff who visits our members' homes each week to fulfill their requests. Today we operate in more than 20 cities across the United States and provide our services through a combination of technology and human help. While our brand is focused on transforming the lives of our customers, from the beginning we have cared deeply about creating good jobs and meaningful work. When we launched Hello Alfred in 2014, the gig economy was the default approach for tech enabled service startups. If we had followed this trend, we would logically have made our Alfred home managers contractors. This model reduces cost and risk associated with hiring, firing, and wage changes as independent contractors are not subject to minimum wage laws and companies have limited responsibility for tax withholding, benefits, insurance, or training. However, we observed that a byproduct of this model was a more transactional relationship between the workers who power these platforms and the platforms themselves. And we were determined to build our business differently. For us, the conversation ultimately wasn't about 1099 versus W-2 but instead about how we could create the right relationship with our workers, not just a cheaper one. We ultimately chose to make our Alfred home managers W-2 employees and as a result, we are able to provide them with a series of important things. For example, systems that enable long term life planning including benefits such as competitive healthcare plans for themselves and their families, opportunities to advance their skills and training through learning and development and career pathways, fair compensation. Alfred home manager wages have some variation depending on location, but the average is 56 percent higher than the markets minimum wage. By way of example, San Diego's minimum wage is $12 per hour but our Alfred's average about $20 per hour. We did this because we believe that an employee centric approach where we have a strong, trusted relationship with our staff ultimately enables us to deliver a better experience for our customers. A more successful workforce creates a more successful business and we believe there should not be a disconnect between a company's success and the personal success of its workers. The reality is that creating good jobs is good for business as well as good for innovation and growth. This outlook requires business leaders to embrace their responsibility of shaping a new generation of jobs where we are not commoditizing skills or side stepping hard won protections. It's also worth noting that our decision to choose a W-2 employer relationship added cost to our model. We estimated that to be about 20 to 30 percent more than had we chosen a 1099 model. However, as a business we also see innumerable long-term benefits to this investment. For example, we have a lower employee turn rate which translates into lower recruiting and training costs for us. We have an increase in internal promotions and tenured employees who began as Alfred home managers which maintains not only important institutional knowledge but also leads to new ideas. Some of our best innovations come from this group. We are proud to look around our company and see former home managers who are now trainers, hospitality experts, or even leading entire cities. Most importantly, workers who feel valued and are given opportunities to grow within a company tend to produce an excellent product. We rank high in customer satisfaction and have been able to maintain strong control of our brand by having a consistent high-quality work from our employees which is an essential factor in any service based model. Regardless of which business model employers choose to pursue, there needs to be a concerted effort to provide meaningful benefits, protections, and development opportunities for the people who do work for these companies. When we as business leaders don't make the appropriate worker choice, the impact can distance the worker from the company. This deprives the worker of the benefits that being part of an organization can provide such as career advancement, learning, development, and training. It also deprives the company of the ideas, lessons, and diversity of skills its staff could otherwise contribute. I am hopeful that we will see more stewards of good business practices in the years to come. Employees shouldn't be seen as cost centers, but instead as human beings who are delivering real work and value and deserve the same in return. The result will be good for business, good for the worker and good for our workforce at large. Thank you. [The statement of Ms. Beck follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Chairwoman Wilson. Thank you, Ms. Beck. Under Committee Rule 8(a) we will now question witnesses under the 5-minute rule. I will now yield myself 5 minutes. Professor Rogers, as companies increasingly contract out for work that they would previously hire directly, how does that exacerbate the challenges workers face when they organize a union or engage in other concerted activities? Mr. Rogers. Thank you for that question. Outsourcing and subcontracting, fissuring, franchising, in many circumstances can impact workers' rights to organize in a couple of ways. One is that workers' primary employer may not actually have any economic power over their working conditions. The company that actually has that power may be a third party. But the workers cannot get that third party to the table. That means that meaningful collective bargaining is effectively impossible. A second challenge is that workers do not have rights to strike pickets or really organize or bargain with that third party under existing law. I'll note that the PRO Act would remedy many of those short comings. Chairwoman Wilson. How does sectoral bargaining prevent individual companies from undercutting wages and working conditions in order to compete? Mr. Rogers. So the best example of sectoral bargaining in the United States is probably the United Auto Workers pattern bargaining strategy in which the UAW negotiates a contract with one of the big three automakers and then pushes the other two to match the terms of that contract. Now that's not actually complete sectoral bargaining because there are still many nonunion plants in the country. But what that does is it prevents the three, any of the three automakers from underbidding the other two. A true sectoral bargaining would actually lift up wages and benefits for all of the workers in the industry therefore ensuring that there is a level playing field for all companies. Chairwoman Wilson. Thank you. Ms. Beck, can you elaborate on your decision-making process as a founder when you chose to employ W-2 workers even though it was a more expensive option. Why did you make the business decision to cover these cots? Ms. Beck. Thank you for the question. At the end of the day, we were very focused on building a relationship of trust with our customers and also with our employees. And when we considered the things that a business should do in order to do that, the costs were far less than the benefits that we thought we would receive. So if we could invest in our workforce, give them the protections, the benefits that they deserved, they in turn would deliver a high quality experience to our customers. Chairwoman Wilson. Thank you. Professor Rogers, in your testimony you discuss some of the abuses associated with legal safe harbors and some companies rely on to deny their workers are employees even when they are providing them benefits. Why is this harmful and how would the PRO Act address this problem? Mr. Rogers. The greatest problem here in my view is that the definition of employment under the NLRA right now looks to the common law test and interprets the common law fairly narrowly to require a fairly high degree of control over the work. The test itself however is incredibly malleable and incredibly confusing. What the PRO Act does is substitutes the so-called ABC test which is much more tractable, much more clear and that would lead to gig economy workers being classified as employees in most cases. As a result, they would then be eligible for most employer mandated benefits. Chairwoman Wilson. Thank you. Dr. Weil, is there a difference in earnings if a worker is employed by a main business instead of having their job contracted out? Mr. Weil. Thank you, Chair Wilson. The answer is yes, and the difference can be substantial. Many of the best estimates put that at something like a 20 percent differential when a worker is doing the same work for often the same organization but has been contracted out to another organization. So the impacts on both wages and also access to benefits can also be quite pronounced and dramatic from a shift like that. Chairwoman Wilson. Does the fissured workplace negatively impact a works ability to advance within a company? What does this mean for wage growth? Mr. Weil. I think that's one of the most profound effects of the fissured workplace that we are only now seeing and putting together in the economic data. The fact that a worker in the old model of employment who was a janitor, worked for a company and could enjoy a job ladder within the company. When that janitor is a subcontracted or in other ways a staffing agency worker, that opportunity for advancement is undercut. And that has implications on his or her job earnings profile over the course of their work life. Chairwoman Wilson. Thank you so much. I yield, my time is up. And now Members from questions--questions from Members. Dr. Adams, I am sorry. Mr. Wahlberg, our Ranking Member, North Carolina. Mr. Walberg. I love North Carolina-- Chairwoman Wilson. Michigan. Mr. Walberg.--but I choose the beautiful state of Michigan. Home of 20 percent of the world's freshwater and a beautiful color scheme right now but North Carolina is a beautiful state to vacation in. Ms. Greszler, Republicans have long championed the expansion of association health plans as an effective and affordable health care solution for many workers. In 2017, I was proud to introduce the Small Business Health Fairness Act with former Representative Sam Johnson to expand access to high quality, lower cost healthcare plans for employers and workers and see it pass the House. The Department of Labor has also done important work to expand access so to HP's by allowing more employers and small business to participate in these plans. In April, I also introduce H.R. 2294, the Association Health Plan Act of 2019 which would ensure continued access to coverage for association health plans established under DOL's AHP rule. In your testimony, you mentioned that expanding access to HP's would give workers more choice, portability and portability for their healthcare benefits. Let me ask you this question. Why are choice and access important to workers and do you think that increasing an availability of AHP's will benefit workers and their families? Ms. Greszler. Yes, thank you. We have actually done some polling on this at the Heritage Foundation and we found that what is most important to families is to have a choice and feel like they are empowered in being able to get access for themselves and for their loved members and to make some decisions about what type of healthcare they receive. And that's why association health plans are so important particularly for smaller business. There are a lot of costs associated with finding a health plan and running that and this association health plan model drives down those costs not only administratively but also by bringing together a pool of workers so that they can offer a lower price. And that's something that's particularly important to these small businesses and something that they have trouble is finding an affordable health plan that both they and their workers can use for their healthcare. So small businesses this is something that would help them tremendously. Mr. Walberg. And they generally want a partner with that because of I guess what I would question I would like to ask you now about the tight labor market that is out there. We know that job creators offer benefits such as health insurance plans. We talked about retirement contributions, paid leave to recruit and retain workers. It is just a matter of course that is necessary to have those employees. We also know that thanks to a strong economy spurred on by our Tax Cuts and Jobs Act and deregulatory actions there are more jobs than job seekers. About 7 million the last figure I saw. So again, how does todays tight labor market affect employee benefits? Ms. Greszler. Well, we are still seeing companies expand their benefits because of the tight labor market. Something they have to do. They're having to compete to get the workers that they need. Mr. Walberg. Competition. Ms. Greszler. There are people out there that are offering thousand dollar signing bonuses in lower wage jobs. We have seen a race to the top in the type of benefits that people are offering. They're even health insurance and pet insurance because that's what some workers are asking for. And paid family leave has expanded rapidly. We now have the top 20 employers in the U.S., a lot of these that are employing lower wage works like Lowes, Home Depot, Starbucks, they now all offer paid family leave because it's something that their workers want and they're responding to that. Mr. Walberg. And competition. Ms. Greszler. And competition. Mr. Walberg. Yeah. Ms. Greszler, many businesses use subcontractors and independent contracts because this framework allows for flexibility, ready access to skilled workers, and the ability to responsibly manage costs. These relationships are particularly important for businesses that operate on thin margins such as small, rural hospitals and I have a number of those, allowing them to dedicate more resources to patient care. The Democrats bill H.R. 2474, the PRO Act, which was recently approved by this committee as indicated, codifies a broad and vague standard for joint employment that could make these hospitals the employer of the independent contractor or contractor's employees. What are the primary concerns you have with this joint employer standard in the PRO Act as it pertains to businesses and workers alike? Ms. Greszler. Particularly as you talked about smaller, rural hospitals, a lot of the businesses simply won't be able to offer the services they currently do or the quality of service that's offered there. I grew up in a small town in western New York and after my father and some of the other orthopedic surgeons retired, there were none there and so they had to contract to bring some in. Similarly, my uncle is a retired physician and it's a job that he can do, the kind of traveling doctor model. And so you're bringing people who have higher skills than are available in that community and as a result, patients have access to that higher quality, more specialized care. And that's the biggest benefit of contracting is you get a more specialized product as opposed to having to use one of your current employees to perform say 5 different jobs that they aren't necessarily equipped to do. Mr. Walberg. So better quality and care. Ms. Greszler. Exactly. Mr. Walberg. Thank you. I yield back. Chairwoman Wilson. Thank you. Dr. Adams, North Carolina. Ms. Adams. Thank you, Madame Chair, and thank you to all the witnesses. Dr. Weil, currently misclassification is not itself a violation of the Labor--Fair Labor Standards Act so how would making misclassification a violation of FLSA and allowing civil monetary penalties in a private right of action for violations help combat misclassification? Mr. Weil. Thank you, Chair Adams, and you've pointed to a major problem of misclassification and that is because of its use by some employers, it undercuts the competitive position of other employers by make--and because misclassification in and of itself is not a violation of the Fair Labor Standards Act it's very difficult to root out those businesses that are using it as a competitive edge by providing penalties expressly for the active misclassification and the willful act of misclassification. It would act as a deterrence for those kinds of models, stopping the employers who are using it as a business model decision, and it would also support those businesses that are doing the right thing in complying with the law in terms of their competitive position. Ms. Adams. Great, thank you. Dr. Weil, while you discuss in your testimony that wage theft related to the fissuring of work place can be devastating to low wage workers in terms of lost earnings, can you elaborate on what the loss of earnings means to a worker practically? Mr. Weil. Thank you. You know, I think one of the starkest things I saw as Wage and Hour Administrator were the actual cases of the impacts of the loss of wages by hardworking people because of practices like misclassification. Because of the fact that they were not being compensated, not just for the minimum wage but even for hours worked. For a typical family that could mean up to 4 weeks or 5 weeks of childcare. It could mean the practical things like not being able to pay rent for a month. Because so much of misclassification affects low wage workers, its impacts are magnified because of how tight those household budgets are and because in many cases their real wages haven't gone up in decades. Ms. Adams. Yes, and many folks are just kind of living paycheck to pay check and if it is not--if it is not going to be correct then that is a problem. Mr. Weil. Right. Ms. Adams. So during the Obama Administration, OSHA defined a policy where it would hold both temporary worker agencies and host employers responsible for safety and health violations depending on the circumstances of the specific case. Can you describe for us how that works and whether it is an effective way of ensuring the safety of workers employed by temporary agencies? Mr. Weil. Yes, thank you for the question. OSHA's temporary work policy was very much a recognition of what had changed in the workplace. And it used the fact that it holds responsible not just the direct employer but what is called the controlling employer which can be the company that's hiring the staffing agency or temporary working agency also responsible for complying with laws. And that requirement for both parties who both have a stake in the game to take responsibility for compliance with OSHA was an extremely important part of OSHA's enforcement policy and improving or reducing the likelihoods of injuries and fatalities particularly in complicated work settings where you do have multiple employers. Ms. Adams. Thank you. Ms. Beck, do you believe that your employment practices have a positive impact on your brand? Ms. Beck. Thank you for the question. I generally believe that investing in good employment practices is good for business and our business at large. And for us, our brand is the thing that we promise to our customers. So investing in a good employment practice enhances our brand, provides our customers with a better product, increases customer satisfaction. Ms. Adams. So are you saying that it does have, your practices do have positive impact on your brand? Ms. Beck. I believe that to be true, yes. Ms. Adams. Okay. Thank you very much, Madame Chair, I yield back. Chairwoman Wilson. Thank you. Now, Dr. Roe, Tennessee. Dr. Roe. Thank you, Madame Chair. I don't know what economy we are describing, but in my lifetime, this is the best one I have seen. We have 7 million open jobs. The unemployment rate is 3 and a half percent, it is the lowest since 1969. Median incomes are up 12 percent. Real median household incomes are up $7,000 under the Trump Administration to $65,000 plus. African American teens, unemployment in 2010 was 48 percent. It is now at a record low. African American unemployment is at 6 percent. Latino, the lowest on record. I mean, these are all things we should be celebrating and talking about and how we improved that. And one of the things I think that Ms. Beck, and I totally agree with your business model. And when you are done, would you come, please send your people over and show me how to use this electronic thermostat I have at my condo. That would be very helpful because I can't figure it out. It is a model that you have that we used in our practice forever. We have an employee that has been with my medical practice for 42 years. And I hope you have the same success we have. and, Ms. Greszler, I'm going to go over just a couple of things I think that are important in the sharing economy. When I was a resident physician, we didn't make very much money and so I needed to go out and work in emergency rooms to make extra money to support my family. That is exactly what you were talking about. I went into rural communities and worked a shift at night or maybe worked the entire weekend to help support my family. It worked perfectly. The other day I got in an Uber with my wife to go to an event. The person was, who drove the Uber was a flight attendant who had rented a car that you could get off the street, she wanted to make some money so she could work that weekend to make a little, have some fun that weekend and not spend any of her hard earned money she makes on an airplane taking care of me. And she rented the car, drove the Uber and pocketed the money. I can't think of anything that works better. I thought it was one of the neatest things I have seen in that type of economy, to let people decide what is good for them. And right now, the things that we need in this country, workers, and Ms. Beck pointed it out are workers with skills both hard and soft skills. And I think that is what is lacking at the lower end and in our state we are, in Tennessee, we are trying to do that, providing free community college and free technical school for people to bring those skill levels up so they can make more money and they're more employable. The--just as an independent contracting, Ms. Greszler, as an independent contacting varies by industry, the one size fits all policy ignores the complexity and nuances that I just mentioned of such work arrangements and the value they bring to the economy. In your opinion, how would this change in the Nations employment laws affect the millions of hair dressers, child care workers, other professionals who currently rely on those flexible work arrangements afforded them by their designation as an independent contractor? Ms. Greszler. Well, I think independent work the biggest benefit of it is the flexibility and also the ability to earn additional income. There is no cap on the income you earn. When you are in a traditional employer employee relationship, you are often limited 40 hour per week to your salary and often prevented from working from anybody else. Only 16 percent of people who participate in the gig economy use it as their primary from of income. A lot of them are just working on the side and whether that's just to have some extra spending money, to save for education for their children, maybe for their own education, or to start a business of their own to have some income that is coming in while you are becoming an entrepreneur, those are all things that are the choices those individuals make and they lead to better outcomes going forward. And so I don't see how restricting people from being able to earn additional income and being able to have flexibility will be helpful going forward. Flexibility is something that's been particularly helpful to women who are now in the labor market in equal numbers and without that I think we will have a lot of mothers that simply choose not to work at all because they can't find a job that meets their demands. Dr. Roe. You know, people are renting out part of their homes, sharing their homes. There is all kinds of things that benefit everyone. Professor Rogers, I have got one question for you. I know you support the PRO Act, but do you support the part in there that doesn't allow for a secret ballot? We just had a letter written by many members of the, I would have signed the letter, on the USMCA agreement requiring a secret ballot for unions in Mexico. And, look, if you want to belong to a union that is your business. You have a right to do that. I think that is the single most important thing we have as an American is a secret ballot. Mr. Rogers. I support the majority sign up procedure under the PRO Act. Dr. Roe. The question I asked was do you support a secret ballot so that I can go in there if I want to vote for a union I can, if I want to vote against it I can. Nobody looking over my shoulder. Mr. Rogers. So the problem is that workers under existing law can demonstrate unambiguously that they want a union and their employer can refuse to recognize that union-- Dr. Roe. My time has expired. Thank you. Chairwoman Wilson. Thank you. Mr. Courtney from Connecticut. Mr. Courtney. Thank you, Madame Chairwoman, and thank you to all the witnesses for being here today. Particularly, Ms. Beck, again for your testimony that shows that innovation and flexibility in a workforce are not incompatible with the employer employee relationship. And again, I think it is just a really impressive bit of testimony today that is refreshing, you know, to sort of reiterate that point. Dr. Weil, you proposed ensuring that certain basic protections are tethered to work rather than to the employment relationship and this includes ensuring all workers no matter their classification as paid for their work earn a minimum wage are guaranteed a basic right to a safe working environment. Can you just sort of flesh that out a little bit that, you know, you know, how this would actually work in practice that using work as the trigger as opposed to the employment relationship? Mr. Weil. Thank you, Congressman Courtney. I think what we are talking about is a core set of rights that are so fundamental, we want to get out of this box are you an employee or are you an independent contractor. Those are legitimate and important categories that I think play very important roles in our workplace and labor laws. But things like not being retaliated against for the use of rights which is fundamental to our whole system of workplace rights, being assured a safe and healthful workplace and being assured that you will be paid for the work you do to me are fundamental features that we should make sure people receive regardless of their employment status whether they are an employee or an independent contractor. The mechanisms to ensure those might differ somewhat but you want to make sure that those ends happen when a person is at a workplace. And we get out of this box of figuring out for something so fundamental. Mr. Courtney. Again, based on your background, I mean, would, again, for example right to getting paid for your work, I mean, tied to work rather than employment necessarily. I mean, would that be housed in your old division at the Department of Labor? I mean, is that sort of the--I mean, at some point we have to deal with legal structures here. Mr. Weil. Right, right. I think it could be. I think it could be and I think we are talking about provision of minimum payment for work whether that work is done through an employment setting or an independent contract setting. I think the most important thing is to assure that those rules are clear to all people who employ people and that they make their decisions accordingly. Mr. Courtney. Okay. And again, I know you have done, you know, great work on this issue, written books and so in the course of your research, do we have any idea about the number of workers who are not covered by OSHA as a result of the fissuring workplaces? Mr. Weil. Well, the most direct answer to that would be we know that self-employed workers have no coverage under OSHA. And if you look at that that's 16 million workers right there. The estimate I gave before that roughly somewhere between 20 percent up of the workforce is in fissured relationships, I think also gives one a sense of the lack of coverage of so many of those workers. Mr. Courtney. And because of that lack of OSHA protection, I mean, do we have any sense of just, you know, the risk level and the exposure to injury and fatalities as a result of that, you know, shortcoming? Mr. Weil. Absolutely, I mean, I can give you two quick examples. One is a story that happened for Amazon Flex workers. Amazon Flex workers deliver packages to people but are paid as independent contractors. There have been a number of cases reported of fatalities for those flex workers working long hours and because of the incentive structures. It's also becoming more common in the meat packing industry which we know is a very dangerous industry for certain work to be done at night by subcontractors and increasingly that practice as we have found in many other parts of the economy, that subcontracting is done to people paid as independent contractors. And again because of that misclassification, those workers in very dangerous settings have no OSHA coverage. Mr. Courtney. Well, thank you for, you know, again putting the focus on that. I am, you know, certainly believe that as a committee and as a Congress, you know, we can figure this out, you know. This is really not mission impossible in terms of providing basic protections for people and still allowing companies like Ms. Beck to innovate and thrive and succeed. And, you know, to say that they are incompatible and that we just have to kind of totally release people into this brave new world in my opinion is just an unacceptable level of risk. And we again as a country we can do better than that. I yield back. Chairwoman Wilson. Thank you, Mr. Courtney. My Byrne. Mr. Byrne. Thank you, Madame Chairman. Chairwoman Wilson. From Alabama. Mr. Byrne. Good morning, everybody. In my prior life I was a labor and employment attorney representing small to medium sized businesses. And you can sort of picture my clients. They don't have HR directors because they can't afford HR directors. They are just trying to make their business go. And it is hard. It is hard to run a business these days. And so when we add complexity to the laws that they have to comply with, you leave them with one of two choices. One is to go through an inordinate amount of expense to try to get legal advice so that they comply with the law. Or that they inadvertently fail to comply with the law. That is not helping the American economy and that is certainly not helping the people that work for those small businesses. So I look at the definition of employee in this PRO Act, I got to tell you, even as a lawyer, I look at that, I would have a hard time advising some of my clients whose an employee and whose not. Who is an employer and who is not. We actually had a meeting a year or so ago. We met with some gig workers and one guy as I recall was both an Uber and a Lyft driver. And I asked him I said do you consider yourself to be an employee or an independent contractor? And he said I consider myself to be a franchisee. I said well, I know you are not that. But even he was confused. So I am trying to think who we are benefiting here with all of this. Now, I know that there is a big push out there to totally destabilize the equilibrium between labor and management under our labor laws. Because unions even under a very friendly administration, the Obama Administration, continued to lose market share because what unions are selling, workers aren't buying. They don't have the stuff that workers are looking for. So we think by piling on these sorts of definitions, somehow we are going to give the unions a better chance here. I don't think so. I think you are just going to make things work for small or medium sized business and for those people that work there. Because all they want is a job. And, Ms. Greszler, you are right. There are lots of young women out there that they want a job but they want to control their hours and so they want to work for themselves. But if we make it so difficult for a business to know when somebody is an independent contractor when they are an employee, those businesses are just going to say well, I am just not going to hire anybody. I am going to quit doing it which means we have cut out opportunities for those young women that have those business. I have got them in my own family. [The statement by Mr. Byrne follows:] Prepared Statement of Hon. Bradley Byrne, Ranking Member, Subcommittee on Subcommittee on Workforce Protections Thank you for yielding. American workers are benefitting from a strong economy ushered in by Republican pro-growth policies. Wages are on the rise, jobs are being created, and unemployment is at a 50-year low. Instead of building on these successes, Democrats in Congress are advocating policies that will take our labor laws and economy backwards. Specifically, Democrats are pushing legislation that will severely restrict the independent-contractor classification, increasing costs and legal risks to business owners. These efforts are ongoing even despite the fact that many Americans in the modern economy desire to work for themselves on their own terms. Workers recognize and seek out the freedom and flexibility these arrangements provide. This is a growing trend among American workers that should be encouraged, not impeded. Yet, Democrats want to penalize this kind of entrepreneurship by creating an expansive, confusing definition of ``employee,'' which will increase costs for business owners as well as consumers, while limiting work opportunities for individuals who desire flexibility rather than working for only one employer or being forced into a one-size-fits-all union contract. Democrats claim that many if not all employers are intentionally misclassifying workers to deny them protections and benefits. But under the Fair Labor Standards Act (FLSA) there are already sufficient incentives for employers not to misclassify workers. Indeed, there is a great deal of misinformation out there about the issue of worker misclassification. In fact, during our last subcommittee hearing on this issue, a witness confused the source and substance of a related statistic with misquoted data erroneously attributed to the federal government. As we proceed to examine these issues, it is important we create and develop policy based on the best and most accurate information possible. It's not all bad news. The Department of Labor (DOL) has taken steps to improve clarity and flexibility for workers and employers alike, empowering workers to earn more in the strong U.S. economy. For example, DOL's recent overtime rule provided a responsible, reasonable solution that will allow more than a million additional workers to qualify for overtime pay without significantly increasing the burden on employers. Additionally, DOL and the National Labor Relations Board are working on proposed rules to update the standard for joint-employment under the FLSA and National Labor Relations Act, respectively. These updates will create clear, precise standards so that workers know upfront who controls the terms of their employment and with whom they will negotiate wages and benefits, and businesses know upfront the extent of control they can exercise without subjecting themselves to unwanted union harassment and costly litigation. The Trump administration's joint-employer standards will replace unworkable Obama administration standards that increased compliance costs and created confusion for workers and businesses alike. We need more policies like these that reflect the realities of a 21st century workforce. Rather than supporting backward-looking proposals which promote outdated workplace policies, Republicans champion reforms that expand opportunities for flexibility, innovation, and entrepreneurship to give workers and job-seekers opportunities to compete successfully in the 21st century economy. I look forward to hearing from our witnesses today. Thank you, I yield back. ------ Mr. Byrne. So, Ms. Greszler, let me ask you. In light of this definition that they have got of employee and employer under PRO Act and based upon your expertise, do you believe punishing small businesses with costly fines for misinterpreting under workable definition of employee is the right approach? Ms. Greszler. No. I think you will end up driving these small businesses out of business. The PRO Act includes a $100,000 fine for misclassifying an employee. The average income of a small business owner is $73,000 per year. That would wipe out more than their entire income for the year. These small business owners simply can't pay that fine, but they also can't comply with the law. It's so vague what the definition is now under those provisions of an employee versus a contractor that they're probably just going to not hire any contactors anymore. As a result of that you have less specialized services, you are having lower quality that you are providing to your customers. You are going to end up losing those customers to the bigger businesses that do have the money to pay for the expensive lawyers to tell them whether, what they need to do in terms of contract versus employee relationships. It's just going to benefit the big guys and drive out the little guys. Mr. Byrne. Now that and that is what I am most worried about. You are right. The big guy is going to take care of themselves. They will be fine. I am not worried about them. But most people I America work for small to medium size business. Now you go into an area like the I represent in south Alabama, we don't have that many big businesses. Most people, the vast majority of people work in a small or medium sized business. And most of those people just want to go to work every day, do their job, get paid fairly, get fair benefits, and all this stuff we are arguing about up here doesn't mean a hill of beans to them. It really doesn't. But we would make things all this complicated to try to solve a problem that is not really there. So, Professor Rogers, I am going to ask Dr. Roe's question again. It is a real simple question. Yes or no. Do you support secret ballot elections? Mr. Rogers. I support secret ballot elections in instances where employees have a legitimate right to choose a union. And you-- Mr. Byrne. Do you think they don't have that now under present law? Mr. Rogers.--we have found under our existing law and practices that there, those rights are simply illusory. Mr. Byrne. Well, I can tell you from my experience and I have done dozens of union elections, you are absolutely wrong. They have plenty of rights. They exercise those rights and taking away their right to exercise that ballot secretly would be a slap in their face and I yield back. Chairwoman Wilson. Thank you, Mr. Byrne. Mr. Morelle, New York. Mr. Morelle. Good morning, thank you, Chairman Wilson-- Chairwoman Wilson and Chairwoman Adams, for holding this hearing and to all of our witnesses for being here today to share their expertise as we discuss the future of work and I am struck by this. I don't see this necessarily although I understand why people draw this conclusion. The question before us today is really about independent contractors, the fissured work place and not whether you are pro union or non-union. This is really about how we properly classify people for the work that they do. And the United States is witnessing a rapidly changing workforce as the 21st century economy continues to unfold, and it is critical seems to me that we consider the future of work but we also consider the future of worker benefits. And we know that when an employer-employee relationship exists, the employee has access to core statutory protections under the NLRB, FLSA, and OSHA but that isn't the case when you are classified as an independent contractor. So this is really important as we sort of consider this. And there is obviously questions to access to health coverage, retirement plans, paid leave, workers compensation, and unemployment insurance all of which is by no means guaranteed if you are an independent contractor. I do want to get to another topic, but I was struck by something I didn't entirely plan to ask about but, Ms. Beck, I am just curious about the model that you use. Are the, are your employees, do they work as other platform opportunities where the worker makes the decisions about when he or she is available for work? Do you sort of log on when you are available to work or are there set hours? How does that model work? Ms. Beck. Thank you, that's a great question. For us so we do provide all of the protections, benefits, wage, insurance, that are commensurate with a W-2 employee relationship. And we also provide sort of a fixed hours in which you can work but that doesn't mean that every worker of ours works all of those hours. So within the guidelines that we provide, workers have, they work independently, they work autonomously, and they check in and check out as appropriate. Mr. Morelle. So if just to--if I am a worker and I typically work 9 to 5 but on some morning I have to take my, you know, family member to the doctor and so for those two hours I am not available, is there a bank of hours that you don't have to work or is it simply that they indicate that they are not available for that time and work their own hours? And is there a minimum number of hours they have to work weekly or how, I am just trying to understand the model because it does seem very innovative. But it also seems, I am just trying to understand if it works like the other platforms do who argue that they must be independent contractors and not employees? Ms. Greszler. I think our business model is, you know, we have designed the system that we use based on our business model. So but to answer your question directly, there is no minimum number of hours that an employee has to work on our platform although most choose to work 4 or 5 days a week. If someone has to take time off they ask for it, they clock out, and then they clock back in when they need to come back. Mr. Morelle. So there is not you have X number of sick days or X number of vacation days. They just sort of work when they choose to work? Ms. Greszler. We have sick days and vacation days commensurate with the laws that we otherwise follow but it is flexible within those guidelines. Mr. Morelle. Great. Well, thank you very much and I agree and associate myself with my colleague and friend, Mr. Courtney's remarks that it does seem to me that you can do this and still have an innovative model for your business. It clearly, I don't think to those who make the argument that you can't have innovation when you continue to have an employer employee relationship and I think your example gives evidence of that. I wanted to just shift for a second and I know I only have a minute but thinking about retirement plans particularly as there is a current retirement crisis facing our country and too many people, young people in particular building towards their retirement and I thought perhaps, Professor Rogers, you might just--can you comment on how classifying workers as independent contractors makes it more challenging for people to have adequate retirement? Mr. Rogers. Sure and thank you for the question. I think this occurs in a couple ways. So, if we are talking about the lower wage workforce, individuals who are classified as independent contractors often have lower pay than individuals who are classified as employees as Dr. Weil indicated. Because of that there is simply less money to go into retirement funds even when they're available. The second reason is that many if not most companies do not provide such funds to independent contractors, the savings vehicles that they would provide to employees. Mr. Morelle. This is a great topic. Thank you, Madames Chairs, for it. Obviously, I am out of time but I think we will have further discussion and I appreciate it. Chairwoman Wilson. Thank you, Mr. Morelle. Mr. Taylor from Texas. Mr. Taylor. Thank you, Madame Chair, and thank you, Madame Chair, appreciate this hearing and appreciate to the witnesses. Ms. Greszler, you actually represent diversity on this panel. You are the only one without a Harvard degree. Nobody got that one. All right. So I just wanted to, you know, I am very fortunate to represent a very successful community in Plano, Texas which actually has the highest per capita income city in North America with over a quarter million people. And I have employers that have pursued a W-2 employee strategy and I have employers that have pursued aggressive use of the 1099 structure, you know, for instance, insurance companies use 1099 contractors to do insurance adjusting. That is the normal model for insurance adjustment. And 1099 contractors will, and many IT professionals in Plano Texas that are using the 1099 model to go in and do piece work, right. So they are building a particular technology platform, it is a two, three month job. They are going and doing that for the next company. They are doing that remotely and so the 1099 prospect it just it is a better way for them to do that business. One thing that I have noticed is my state is a right to work state and businesses that come into my state consistently talk about how that is a feature, that is why they come to Texas. We have, you know, very low unemployment. Actually, our income growth in the state of Texas in the first two quarters this year was 7 and a half percent. Just so just staggering increasing in income growth in Texas as a right to work state. One thing that I have noticed looking at the charts is that union membership among young people is actually going down, right. So younger and so it is not only are you seeing total numbers for union membership go down, but you are seeing the younger, the new generation seems to be less union oriented, particularly in the technology space which I have a lot of technology companies in my district. Can you speak to why that is? I mean, what is going on? What in your mind giving a National trend, I see that locally but what do you see on a National level? Ms. Greszler. Well, I think younger workers prefer having more autonomy and they also want a structure that not only lets them be rewarded for the things that they achieve, a pay for performance type structure, but also something that's not just a rigid ladder. It has no, you know, they want no cap. They want to have open opportunities so that they can say my income might double in 2 years instead of I know it's going to raise three percent every year and not go beyond that. And so they want more options and that's not something that unions are offering. Instead, you know, the unions are rigid pay scales and they're providing services that frankly are not representing the workers themselves and I think that is why we see a decline in the desire to be a member when a worker actually has a choice as they do in Texas is that people are choosing not to be there anymore because they don't want to pay for something that's not benefitting them. And they also don't want to pay for other things that are taking place in terms of lobbying against policies they might be against, corruption that's happening in the unions. These are hard earned dollars and if you are going to be contributing hundreds if not a thousand dollars of your paycheck to a union, you want to see it benefitting you directly. Mr. Taylor. Now in the, the other thing I just want to talk about, you know, just going to talk about the economy growing generally and how as unions decline, the economy continues to improve. I mean, is there a correlation there or is that just something that is happening? Ms. Greszler. No its absolutely--you can compare the right to work states versus the non-right to work states and over the past 25 years, median income growth and that's what we are talking about here is we want workers' wages to go up. It's increased 165 percent in right to work states compared to 99 percent in the non-right to work states. And it's the same thing when you look at employment growth. Look at GDP growth. It's all far higher in those states that are right to work that give workers those choices in the, as a result of choice as more opportunity. Mr. Taylor. Thank you. And, Ms. Beck, just to talk about your business model and it is interesting to hear how you think, thought through the 1099 contractor versus the W-2 and I think you have really made the right choice for your business. But, I mean, have you ever or would you ever consider hiring a 1099 contractor to come in and evaluate your HR system or to, you know, do some IT work or are you just sort of ideologically opposed to 1099 contractors, you would never consider hiring one? Ms. Beck. Thank you. It's a great question. At the end of the day, I think every business has to make the choices that both benefit its, you know, business but also its workers. So as a, you know, blank statement we are not opposed to 1099 contractors for everything. Mr. Taylor. Okay. Ms. Beck. I just think that when you are thinking about you own workforce and your front-line staff and the people who are really driving the core of your business, then the relationship has to be the right relationship. And for us, that was a W-2 relationship versus a 1099. Mr. Taylor. Sure, no and I appreciate that at the core of a business and again, you know, at least, you know, in Plano, Texas we have a numerous businesses that are enormously successful that pay very well that are using the 1099 model to grow their business and provide a really good lifestyle for the people that had the fortune of living in Colin County. Madame Chair, I yield back. Chairwoman Wilson. Thank you. Thank you, Mr. Taylor. Mr. Norcross, New jersey. Mr. Norcross. Thank you. Appreciate you holding this hearing and talking about the future. And really like the comments from all the folks who start talking about we can look at the future by looking at today. And, you know, the idea of somehow blaming every problem on the unions today it is just absolutely remarkable. I guess it is the only talking points we can get across. So there are other things other than that. Having spent close to 40 years in the business, when we talk about corruption where we hear that. It is in the business side of the equation. There are bad people everywhere. But your very own statistics saying that union membership is declining yet you are blaming everything on the unions is just remarkable. So I will just leave that. Let us talk about the gig economy and the subcontractors or the misclassification. Yeah. This is a great entrepreneurial spirit. I want to become my own boss, but you know what, I want more than one customer. Mr. Uber of the world, you are my only customer and I am an independent contractor so now I become my own HR manager. I become my own tax consultant. I am my own safety director, so I am up on all the current issues. I am my own lawyer because I might get sued. I am my own mechanic because now I have to take care of that vehicle. And oh yes, I am my own retirement consultant so when I get to those golden years, I might have a few dollars put away. So the idea of wanting to take on all that responsibility so you can make minimum wage is just beyond me why we think this is a really good idea. But let us just home in on one of those issue. Dr. Weil, OSHA. I now become an independent contractor. I am an electrician. I go into a refinery to work as that one-man job. Tell me, what are the chances of that worker being up to snuff on the OSHA regulations? Mr. Weil. That's a great question, Congressman Norcross. There are a few problems that worker has. Number one is as you say, the likelihood they understand the health and safety standards that should be protecting them is probably pretty low because for all the reasons you've just outlined. The real problem is if that person is self-employed independent contractor but is being put in that environment and sees a problem, that person has no standing because of that status. So our laws make it very difficult for that person to do anything because of that status. So it's that, those coupling of that problem of both the likelihood they don't have the information they need in a case like OSHA and then the absence of their right to complain which is basic to the whole OSHA system working. Mr. Norcross. And the legal side of it they are now because they are their own company, they are liable for any issues that happen on those jobs. Mr. Weil. That's right. That's true. Mr. Norcross. So there is a difference between staring your own company and growing it and we don't want to dissuade anybody from going and building that great company. But the gig worker is completely different. Do you think anybody from Uber is putting away, I don't know 15 percent of the money they earn so that someday they will be able to retire? What are the chances? Mr. Weil. It's a huge challenge because that Uber driver, that Lyft driver, independent contractor working on a platform like that, not only is going to have to cover the expenses for things like gasoline obviously, for paying for expenses on their cars, for keeping their car up, but then there are all those hidden expenses that its very unlikely that they're putting money aside, like long term retirement. The other thing I would add to that is the Uber platform is really a branded business. I mean, we have a verb we use. We say we are going to Uber somewhere. Now that to me says you have a brand there that employs very cleverly a large group of people to make it work but all the terms that matter to an independent contractor, a true independent contractor are being determined by the platform. Mr. Norcross. So this isn't just to beat up Uber, it is just as you said it is a verb and when we look at their model of innovation doing it through the app I think is wonderful. The idea of making everybody a subcontractor so they defer all those costs. The Uber driver pays his own Social Security, right? Both sides of that equation. If there is not enough work, do they collect unemployment? Mr. Weil. No, they don't. They are not covered by unemployment insurance as an independent contractor. Mr. Norcross. So with my 5 seconds left I want to make a distinction. There is a difference between becoming an entrepreneur, starting your own company and trying to just deter fault for your cause of being an employee. With that I yield back. Chairwoman Wilson. Thank you, Mr. Norcross. Dr. Shalala of Florida. Ms. Shalala. Thank you very much, Madame Chair. I do want to point out that the House of Representatives does not have an HR office which I think we should have obviously. But, Dean Weil, I, you have worked in the Department of Labor and the Hour and Wage Division if I remember correctly was founded in 1938 and you talked about only having 1,000 employees. Would it have made a difference if you had 5,000? Have you thought about how we would manage enforcement in a gig economy, in this new economy with lots of independent contractors? And how we would think about reorganizing not only that division but the entire Department of Labor? Mr. Weil. Thank you, Congresswoman Shalala, for that excellent question. That represents I think one of the biggest challenge we faced was the fact that we had 1,000 investigators to cover 7.3 million workplaces. That is a challenge that any enforcement agency always has. But when you layer on it the complexity of what has happened with all of the different forms of subcontracting and independent contracting, it makes it incredibly difficult for an enforcement agency, whether its Wage and Hour or OSHA or any enforcement agency to undertake its task as required by the law. I think it requires one to think differently which we tried to do, be more strategic in how you use those scarce resources and even with more resources you would still have to make the tough choices about where you prioritize your enforcement so that it really has an impact on compliance and improving compliance. Ms. Shalala. So have you also thought about, I have been on the website 1,000 times about information for individual contractors that is usable so that they know what their rights are. It seems to be that you have to almost re-conceptualize the whole concept of enforcement if we are moving to this kind of an economy. Mr. Weil. I think that's very true. I think that one has to think about the whole tool box. That enforcement and vigorous enforcement is foundational but there is also things as you state like education, outreach, trying to make people aware about what the law says they're supposed to do. We use for instance administrator interpretations because we wanted to inform the employer community about what the law says and what the responsibilities were. Ms. Shalala. Thank you. Professor Rogers, how do you think about whether benefits, a benefit package ought to be provided by the public sector versus the private sector? You are at Temple which is on TIAA-CREF I think. And for those of us that are academics, we have a mobile, that is unless our states don't have their own systems, we have a mobile system. I have been in, taught in 5 universities and so I have TIAA-CREF, you know, in all of those places and cumulatively it doesn't matter where I have gone, I have had the same pension system. Mr. Rogers. So thank you for the question, Congresswoman Shalala. TIAA-CREF is a great example of a portable benefits system that actually works quite well. Because you have a large number of university and college professors around the country that are able to participate and multiple employers in the different universities participate as well. You know, I think that's a model that can be replicated in the industries where we have many, you know, multiple different employers but we would have to create incentives for those employers first off to treat their workers as employees and to give them generous benefits. Ms. Shalala. What about buying into those systems for individuals? Mr. Rogers. So this was--excuse me, what was the last part? Ms. Shalala. What about buying into those platforms for individuals? Mr. Rogers. So Washington State has created a mechanism where individuals and I believe very small companies can buy into a public benefits system. That I believe covers paid time off or paid leave. There was a proposal a couple of years ago to allow individuals to buy into CALPERS, the California Public Employee Retirement System. And there is a pretty strong economic argument for permitting that because the administrative costs are simply so low and because CALPERS can negotiate for much better investment rates, fees for investment providers. Ms. Shalala. Thank you very much. It seems to me this is the way we ought to think about it. What existing platforms can we use and rethinking the enforcement mechanisms at the same time. Thank you, Madame Chair. Chairwoman Wilson. Thank you, Dr. Shalala. Mr. Scott, chair--oh, Dr. Foxx. Mrs. Foxx. Thank you very much-- Chairwoman Wilson. I have you down as ex officio. Mrs. Foxx. Thank you very much, Chairman. I want to thank our panelists for being here today. Ms. Greszler, in your testimony you mentioned that the biggest growth component in the economy appears to be individuals who are supplementing traditional work with gig type work. This seems like an important point to consider when crafting Federal labor and employment policies. How should we account for the future growth of the sharing economy and the demands of modern workers who seek freedom and flexibility in their work arrangements? Ms. Greszler. Well, I think we shouldn't stop it from happening is the first thing. And we need to recognize that first the gig economy is a small portion of total employment. It's about 1 percent but it's a huge opportunity for workers. Workers aren't using that as their primary source of income. If you are an Uber driver and you want a steady job, you got a taxi cab company and you get that. These workers want something that is optional, that allows them to pick the jobs they do, the days they do them, and it's particularly beneficial to less experience or disadvantaged workers. Think of somebody who has a disability and they might not be able to wake up every day and be able to perform a 9 to 5 job, but they can say hey, I feel good today, I can go out and drive Uber. I can do some things on Task Rabbit. And so we are going to isolate those people and force them to not having a job at all in some cases or not getting that additional income that they would like for whatever purpose it is if we try to just kill this sector of the economy. Mrs. Foxx. Of course, this way of work has been around since the beginning of time. When I was in college and working full time, I typed other people's papers at night to make a little extra money. So those of us who are ambitious and wanted to make money have always found ways to do this on the side. Ms. Greszler, Democrats are so certain that labor unions are the key to the future of work that they are willing to sacrifice workers own liberties to achieve the goal of enabling labor unions in all work places around the country. As you know, this committee recently approved H.R. 2474, the Protecting the Right to Organize Act on a party line vote after Democrats unanimously rejected dozens of amendments to preserve and protect workers' rights. What are some of the ways this radical bill undermines workers' rights in order to satisfy Democrats desire to force more workers into labor unions? Ms. Greszler. There's all sorts of problems here. Everything from taking away an employee's right to not pay a portion of their income into the dues of a union membership. Privacy implications here, having your personal information including your home address given to a union when you don't want that to happen. Having a third-party arbitrator step in, be the one that is in control of those negotiations. And then talking about the secret ballot election. I mean, that is the fundamental component of our democracy is that you have the right to choose, have a secret ballot and have nobody else look at that. If we are going to support this type of provision, I would ask those who do support it if you would also support having people who work for Donald Trump's campaign in the next election be the ones that go to individual homes and take the votes of individuals. Or do we think that instead, those people should be able to work and walk into a secret ballot to booth to cast their votes. Mrs. Foxx. Thank you. It is especially ironic that these people want to only vote on the MCA if the, we force Mexico to have a secret ballot for union elections but not in this country. Ms. Greszler, in your testimony, you point to the fact that small businesses often use contractors. In fact, my husband and I have done that over the years as we were contractors. In fact, businesses with only 1 to 4 employees utilize 6.7 contractors on average. Can you explain how contracting is beneficial to both the business and the contractor and what might be the impact that the Democrats desired definition of employee were to become the law? Ms. Greszler. Contracting is particularly crucial to smaller businesses and that's why we see them using more contractors. My sister owns her own veterinary clinic in the area. It's small and there is a number of female doctors there. It's primarily all female staff and she uses relief doctors to come in and that's the way they have been able to provide their employees with paid family leave. Without being able to use those relief doctors, they wouldn't be able to offer that. And so this is something that is so crucial to small businesses helping them thrive and grow. Mrs. Foxx. Thank you. One more question. Can you elaborate on how Congress can better foster an environment that will lead to an even stronger economy, greater innovation, higher wages and more opportunity for American workers and businesses alike? Ms. Greszler. Freedom, opportunity, choices, you know, the tax cuts have been doing wonderful things for American families. The average family with children has $2900 more in their pocket every year. $45,000 over 10 years. And that gives them the choice. It gives them what they want to spend that money on. It helps them afford childcare, all types of opportunities going forward. So whatever we can do on the tax side, a lot of Americans don't realize that's actually everyone's biggest expense. They spend more on taxes than they do on food, clothing and housing combined. So let's lower those tax burdens, and also on the regulatory side, this is just a huge burden. I don't think that many people have had the experience of running a small business or even employing one person but it's incredibly complex and there is this great fear about doing something wrong and being charged huge fines as a result of that and so whatever we can do to reduce those burdens going forward. Chairwoman Wilson. Thank you. Mrs. Foxx. Thank you very much. Thank you, Madame chairman. Chairwoman Wilson. Mr. Scott, our chair-- Mr. Scott. Thank you, Madame Chair. Chairwoman Wilson.--education and labor. Mr. Scott. Thank you. Dr. Weil, 5 minutes went by pretty quickly and I think there was, did you get to answer all the questions I think the strategic enforcement was the, what was left off of your statement. Were you able to get that, what you wanted to say in? Mr. Weil. I did but I would be delighted to talk further about the importance of that in this workplace. Mr. Scott. What did you want to say? Mr. Weil. Well, I think as I was responding to Congresswoman Shalala, we face a real challenge under any circumstance given resource constraints, and I appreciate the attention that has been given to the importance of enforcement resources. But we also have to think about how we deploy the and how we work with other parties and those other parties include state governments, worker advocacy and unions, and employers in making sure that people comply and they understand their rights, particularly given the complexity of multi-employer, joint employer, and rooting out problems like misclassification in the workforce. I think we showed that one could make inroads in that during the Obama Administration, but I also think we showed the need for additional enforcement resources for all of our workplace agencies. Mr. Scott. Thank you. Professor Rogers, you indicated that it is difficult to form a union today. Can you say, give a little example of what you are talking about? Mr. Rogers. Sure, I'd be happy to. You know, basically workers face a very high probability of retaliation from their employers when they begin to organize. Sometimes and often that retaliation is frankly illegal. It's unlawful under the National Labor Relations Act but it's very difficult to deter because the NLRA is limited to awarding back pay and workers have to actually, you know, mitigate their damages in the meantime. So that means if you begin to organize and you have a very substantial risk of being terminated, then waiting months or even years to get your job back. If you're making under $15 an hour, under $30 an hour, workers, you know, you will make the rationale choice not to stand up in the first place because the risk is simply so high. That's one among many, many problems. I could talk about this for a while. Mr. Scott. You mentioned the problem with contract workers. We have said a lot, a few things that a contract worker doesn't get that an employer, employee would get like minimum wage and overtime, workers comp, unemployment compensation, you know. What about if you are an independent contractor, what rights do you have on unemployment discrimination? Mr. Rogers. You have to no rights under Title VII. You have some rights under Section 1981 of the Civil Rights Act for racial discrimination but no rights under Title VII as an independent contractor. Mr. Scott. What protection would you have as a whistleblower? Mr. Rogers. Under which statute? Just in general? Mr. Scott. Well, just in general as a whistleblower for retaliation for being a whistleblower, retaliation for reporting injuries or an unsafe workplace? Mr. Rogers. In general, none. If you're not covered as an employee under the act, you're not covered by the retaliation provisions of the act. And that's true for the NLRA, FLSA, ERISSA, OSHA. Mr. Scott. And what could be done to protect workers who are, who may in fact be an independent contractor under present law? How would they, how could they be protected for things like minimum wage, overtime, unemployment compensation, workers comp, discrimination? Mr. Rogers. Well, I think there are a couple issues there. One is that a lot of workers are misclassified as independent contractors. When workers are misclassified, they're denied rights under all those statutes even though they really should be entitled to them. Solving that is, you know, a matter of changing the definition of employment and holding companies to duties toward workers over whom they have power regardless of whether they kind of qualify under the common law tests or certain other tests. You know, there are various bona fide independent contractors, but bona fide independent contractors tend to have the labor market power to negotiate for decent wages and working conditions on their won. They're not necessarily the workers who need protection under the Fair Labor Standards Act or the NLRA for example. Mr. Scott. And if you are an independent contractors, you had--you don't have the right to collectively bargain? Mr. Rogers. It's actually even worse than that. Collective bargaining by independent contractors can be a violation of the antitrust laws. And so an employer could seek an injunction against collective action by independent contractors. Mr. Scott. Thank you, Madame Chair. Chairwoman Wilson. Thank you, Dr. Scott. Mr. Cline, Virginia. Mr. Cline. Thank you, Madame Chair, thank the witnesses for being here. It has recently been reported that 50 percent of Millennials and 75 percent of Gen Z'ers according to Forbes have quit their jobs due to issues related to mental health. These numbers have been steadily climbing over recent years which makes the conversation about workplace flexibility and benefits an important one. I commend the chair for holding this hearing today. Keeping options available to workers so that they can choose a job that fits their needs is of the utmost importance considering statistics like these. Employers should be able to be--to give options of benefits to workers such as Ms. Beck has done with her business. Such as working other businesses, providing benefits such as working remotely, performance rewards, continuing education. These types of benefits make them a more attractive employer and the employee happier. By restricting these choices of individuals that directly impact the workers wellbeing through broad over regulation by the Federal Government however we are eliminating viable workforce options that have brought our economy to where it is today. I would note from Ms. Becks testimony that when she made the decision to structure her team as employees, it added an additional 20 to 30 percent cost to the model more than a 1099 model due to additional benefit and taxes. Unemployment has hit a 50 year low at 3.5 percent. This is in large part due to the recent deregulatory efforts taken by the Department of Labor and giving the power of choice back to individuals. As I speak the unemployment numbers speak to our success as a nation, but we were founded to create a more perfect union and I believe in consistently continuing to better it. Expanding employment options is one such way we can keep up with the modern worker and as a way that workers greatly value. So much of the district that I represent in Virginia is rural and policies like the Protecting the Right to Organize Act would have a negative impact on businesses but particularly small businesses in rural areas. It would inappropriately preempt and prohibit right to work laws in 27 states that value and protect this fundamental right. This is unacceptable and would hurt both the employees and employers in my district. So, Ms. Greszler, can you talk about the impact of bills like the Protecting the Right to Organize Act and how they would impact businesses, particularly small businesses and businesses in rural localities? Ms. Greszler. Well, by forcing unionization upon workers and employers that don't want that and that wouldn't choose that model, you're dictating that both the wages and the total benefit packages that those workers get. And younger workers today place less value on having something like a defined benefit pension. They have high student loans to pay, they might be saving for a home, paying for childcare costs, and it's not necessarily beneficial for them to have 15 percent of their wage of their compensation tied up in retirement benefit particularly when you look at the union structure and they have been well known for having strong retirement benefits but the reality is they can only pay for 40 cents of what they've promised in all of these benefits. And so those workers are recognizing that they don't want to get into a system where a high portion of their compensation goes to a retirement benefit that's actually not going to be there for them when they retire, that will be insolvent by then. And so I think that we need to instead of looking towards the union model, look towards more portable, accessible, affordable things. The average worker is going to change jobs 12 times throughout their career. They might want something that they can take with them throughout those jobs so that they don't have to change doctors, don't have to roll over retirement plans or start new ones. But let's look towards more portability that can help workers accommodate instead of just driving that out of the market entirely. Mr. Cline. Can you also talk about transparency when it comes to union organization and accountability for workers? This, the act that is under consideration would force the sharing of personal information of workers and can you comment on that and the impact that would have on workers? Ms. Greszler. Yes, I have talked to workers personally who don't want union representatives coming and knocking on their door and trying to get theme to sign cards that they might not want to sign. And we need to have more accountability on these unions and members or people who are potentially considering voting for or against a union need to know what is going to happen to their money if it goes towards that union. And there was talk about the corruption in there and the fact that this is just normal, and it happens everywhere. I don't think that makes it right and it is actually more frequently happens amongst unions and workers need to know where their money is being spent and there needs to be proper disclosure of that. Mr. Cline. Thank you. Ms. Beck, are you, are your workers unionized? Ms. Beck. Our workers are not unionized. But with the thing that I think is important about that is as an employer, I want to make sure that our workers have everything that they need. So that's why we pay a fair wage, you know, we are 56 percent above the average minimum wage, provide benefits, career enhancement-- Mr. Cline. And I am glad that you are able to do that. It was an additional 20 to 30 percent cost in your model but I am glad you were able to make the choice to do that. And with that, Madame Chair, I yield back. Chairwoman Wilson. Thank you, Mr. Cline. Ms. Wild from Pennsylvania. Ms. Wild. Thank you, Madame Chair. I am really disappointed that at Ms. Foxx is no longer here because I wanted to challenge her to a typing competition. I too typed papers for others in college but I was 18 or 19 years old, not middle aged and trying to support a family. I have questions for you, Ms. Greslzer. In your written testimony you say there is nothing inherently wrong with unions, but workers must be free to choose whether to join them. And this is a quote, Congress must not grant them special favors. So I want to talk for a couple minutes about the law and special favors. Under the NLRA, employers can hold as many mandatory captive audience speeches as they like to argue against unionization, but unions cannot compel attendants to hear speeches that are in favor of unionization correct? Ms. Greszler. I'm not an attorney. I believe that's correct but I don't know for sure. Ms. Wild. Well, you are here as a witness. Let me see. Let me go to your area of expertise. You have provided us with a Congressional testimony on the future of work helping workers in and employers adapt to and thrive in the ever-changing labor market. As a research fellow from, for the Heritage Foundation and you are not able to answer that question? Ms. Greszler. I have not looked specifically at that component of the law and I can't provide you with 100 percent certainty. Ms. Wild. Well, what--I won't hold you to 100 percent certainty. What do you understand to be the rule on that? Ms. Greszler. That is my general understanding. Ms. Wild. Thank you. Under current law, if an employer files an unfair labor practices claim against a union, the NLRA requires the NLRB counsel to petition for a temporary injunction against unions pending disposition of the claim. But, if the union files an unfair labor practices claim against the employer, the NLRB has discretion but is not required to seek a preliminary injunction against employers pending disposition of the claim. Correct? Ms. Greszler. I will believe your word for it. I have no idea on that one. Ms. Wild. Same answer as before? You are not a lawyer? But that is your understanding, right? Ms. Greszler. I'm an economist and I do cover a broad area of policies, labor is one of them, but I am not well versed in the specific components and statutes of labor law. Ms. Wild. Okay. And let me just ask you are you aware that employers only have to notify employees of their NLRA rights if the employer is found to have violated the NLRA? Unlike title VII, the ADEA, FMLA, and OSHA, an employer does not have to past and maintain notices advising employees of their collective bargaining rights, correct? Are you aware of that? Ms. Greszler. Again, this is above my level of understanding of labor laws. Ms. Wild. Well, let me represent to you that all of those statements are true, and I am going to ask for confirmation of that from Professor Rogers in just a second, but I would respectfully submit to you, Ms. Greszler, that the unions aren't the ones getting special treatment under the law. Professor Rogers, can you comment on those items that I just asked Ms. Greszler about and confirm one way or the other whether they are true? Mr. Rogers. Everything is true with one exception which is that not in all cases does the NLRB have to seek an injunction with the union ULP's. That's only when it comes to recognitional and organizational picketing and secondary boycotts. Ms. Wild. Okay. Thank you for that clarification. Other than that, I am correct about employers be able to hold as many mandatory captive audience speeches as they like but unions are not able to? Mr. Rogers. Correct. Ms. Wild. And that employers don't have to post the notices like they do for OSHA and ADEA and FMLA and so forth? Mr. Rogers. Correct. Ms. Wild. Thank you. I have a couple more questions for you, Professor Rogers. As somebody who has--I practiced law for 30 plus years before I came to Congress. I was a trial lawyer, actually on the defense side most of the time. One of the fundamental tenants of justice that I firmly believe in is that judges have to avoid conflicts of interest and or even the appearance of a conflict of interest. And the best ones I knew always erred on the side of recusal to avoid the appearance of impropriety. But as I understand it, the Republican majority of the NLRB attempted to overturn the Browning-Ferris joint employer rule in high brand industrial contractors by holding that an entity is only an employer if it is actually exercised directed immediately control. Is that correct? Mr. Rogers. That's correct. Ms. Wild. And it isn't it true that NLRB board member William Emmanuel was a former lawyer at Littler Mendelson, the firm that represented the employer on the losing end of the Browning-Ferris decision? Mr. Rogers. I believe that's correct, I don't want to stipulate that it was Littler specifically but yes, he was involved in the litigation. Ms. Wild. Okay. So you wouldn't be able to comment on the fact that Mr. Emmanuel did not reveal to the litigants his connection to the dispute, seek a waiver from them or recuse himself from overturning the Browning-Ferris discussion? Mr. Rogers. Oh, that's absolutely my understanding and of course the decision was vacated as a result once the conflict of interest came to light. Ms. Wild. Thank you very much. Chairwoman Wilson. Thank you, Ms. Wild. Ms. Wild. I yield back. Chairwoman Wilson. Thank you. Mr. Levin of Michigan. Mr. Levin. Thank you, Madame Chairwoman, and thanks so much for holding this very, very important hearing and I salute your leadership. I want to spend my time digging into the possibilities for sectoral bargaining with Professor Rogers. Recognizing Dr. Weil's really important work before, during, and after your government service on the fissured workplace, recognizing that our labor laws are so antiquated and despite all the protestations about how workers are forced to be in unions and all this nonsense. Virtually no workers in the private sector are in unions. 6.4 percent, the lowest in 100 years. And there is no way workers can rebuild voice and power in our economy without a much freer market for worker representation. So, Professor Rogers, stipulating that we must pass the PRO Act and take whatever measures to allow workers to form unions much more freely, I am impatient. I have read your whole testimony which we always say we read all of your all's testimony but in this case, I read all of that. And I don't--I am frustrated by the idea that we have go to in stages over a lot of years, but I don't disagree about the practical difficulties of getting to a sort of a European scale of sectoral bargaining from where we sit right now. So how can we do this most expeditiously? And don't put on an incrementalist hat and a, you know, we are not Eeyore here. We are thinking big about what, the changes we need to make for the American people so they can get their little piece of the American dream which despite low unemployment and the booming stock market, they don't see in ahead of them. Mr. Rogers. Thank you for the question. So I guess two thoughts and then we will continue the conversation. The most expeditious way to at least get some sectoral standard setting structure in place would be to amend the Fair Labor Standards Act to established wage boards. You know, under the original FLSA, those were essentially in place to set wages, but it would be plausible, Australia has a system for example to use that type of structure to set standards beyond wages. So you could look at scheduling policies, particularly concern for retail workers. Health and benefits-- Mr. Levin. But let me just ask you, don't you think that we face a, we should sort of choose between either going with, you know, wage boards or other, you know, public solutions like that or sectoral bargaining, sectoral bargaining-- Mr. Rogers. I think the two can complement each other. Mr. Levin. Okay. Mr. Rogers. I mean, wage boards can set minimum standards. And, you know, they can do more than wages. Right. Mr. Levin. Right. Mr. Rogers. In terms of sectoral bargaining, you know, the challenge is that if we all of a sudden convert to a sectoral bargaining model but still require unions to have majority support before they can bargain, in very few sectors are unions going to be able to bargain. Right. Mr. Levin. Right. Mr. Rogers. So, you know, if you want to act very quickly you could say well, in any industry in which unions have 5 percent density, the union has rights to at least bargain over some topics. Mr. Levin. But there, so there is a wide, wide range in other countries right, between say France-- Mr. Rogers. Correct. Mr. Levin.--with very relatively low worker membership in unions but very high sect, you know, participation in sectoral bargaining. And in Sweden where people are sort of all mostly 70 percent are in unions and they have sectoral bargaining. So could we move from--could we start with France and then move towards Sweden? I mean, why-- Mr. Rogers. We potentially could. You know, part of the difference is that France has extension laws. Mr. Levin. Right. Mr. Rogers. Sweden does not, right. So the unions bargain in France at the sectoral level. Then those standards are set across the country thorough administrative action. The, you know, that would certainly be a decent starting point in the U.S., but you would have to have something like a most representative union, most representative status determination which is what France does to figure out who has bargaining rights. Mr. Levin. All right. Well, I think I am going to need you and your colleagues to work with us to figure out the best way to get there because I don't, I mean, we are facing a situation where 1 in arguably 2 generations of American workers are looking at having a standard of living below what their parents had. That is the reality and we can't stand for that. We need to transform our economy so that workers have power in their workplace and nationally so that they can have a middle-class standard of living. And I am counting on you, this is great work that you and your colleagues are doing, and I am looking forward to working with you to make that a policy reality. Thanks so much, Madame Chairwoman, I yield back. Chairwoman Wilson. Thank you, Mr. Levin. Ms. Jayapal of Washington. Ms. Jayapal. Thank you, Madame Chair, and thank you for, to our distinguished witnesses for your testimony. I represent the Seattle area and obviously we have a lot of technology innovation, a very robust economy. In fact, an employment rate of 96.9 percent in Seattle and we also are the countries first major city to pass a $15 minimum wage which I was very proud to be a part of. We have the first city wide domestic workers bill of rights. And at the state level, we were the first state in the country to tie minimum wage to inflation. We are also in the top three for highest minimum wage statewide across the country. And middle-class workers are about to be paid fairly for their overtime work at the state level. And this is in contrast to the Trump Administration's faulty proposal for overtime that leaves most middle-class workers behind. It is no coincidence that Washington State also has one of the highest union densities in the country. Top--we are number three in the country. We actually have unionization rate of about almost 20 percent which is double the national average. And so people in my district understand that innovation does not mean worker exploitation. So I want to start, actually go back to Mr. Rogers because, Professor Rogers, because I want to pick up on my colleagues questions to you. And specifically around centralized bargaining and standard setting structures, especially for low wage industries. As you may know, I have introduced the Domestic Workers Bill of Rights, H.R. 3760. It creates a Federal domestic workers wage and standards board, modeled off of the wage boards in Seattle, California, and New York. And the board would make recommendations on Federal standards for domestic workers including wage recommendations, workplace protection standards and improvements to benefits. Professor Rogers, how would a Federal standard setting board change the domestic work industry? Mr. Rogers. So it would change it in, and thank you for the question. It would change it potentially in profound ways for the better. As you know, domestic workers are excluded from the National Labor Relations Act. That exclusion goes back to the original passage of the act. And the reasons for it are rooted frankly in white supremacy and southern Congressional leader's insistence at the time that domestic and agricultural workers be excluded from the major new deal labor legislation as a condition of its passage. They actually supported unionization and fair wages just not for agricultural and domestic workers who at the time in the south were of course overwhelmingly African American. So that exclusion stands until today. Enterprise bargaining, to shift to the need for a new bargaining model for domestic workers, enterprise bargaining effectively won't work for them because the enterprise is an individual household. So individual bargaining they already have enterprise bargaining in a way. Sectoral bargaining could do a couple of things through a wage board process or standard setting process it can bring public attention to the challenges domestic workers face. It can set minimum terms and enforce them. And perhaps most importantly can give domestic workers a voice in that standard setting and enforcements. Ms. Jayapal. Thank you. I mean, this is to me one of the most exciting advances in the future of work is the work we are doing with domestic workers and as one home care worker put it, and this is her quote, the solution is to make sure that workers are at the table on the front end and have a say in those these platforms and programs were developed and run and I think that is what we have done. Mr. Weil, you ran the Department of Labor's Wage and Hour Administration. You have written extensively on the future of work. The conversation about the future of work is often dominated by a set of platform-based companies who claim that they are so different and so innovative that they should be exempted from the laws that protect workers right to organize or to be paid fairly, to work safely without harassment and discrimination. And many of these platform-based companies actually refused to treat workers as employees and they spend millions to litigate and lobby to evade their responsibilities towards workers. And this is said with deep respect for the innovation that does come from these companies. But they do use measures including deactivating workers without any opportunity for appeal or charging workers punitive fines, setting unpredictable rates of compensation. You have talked about this as fissured workplaces. Tell me the top three harms that are caused by these kinds of practices. Mr. Weil. Well, thank you for the question. And I think you've outlined them. It is the fact that workers in that status of independent contractors lose basic rights like the right to a minimum wage. And the right to be paid, the right to access to a benefit like overtime, all of our social safety net protections, the right to collective bargaining. Essentially all of our rights that are very much vested in employment. There are certainly parts of the digital economy where workers are legitimate independent contractors, where the digital platform acts as an electronic market to bring users and providers together. You know, that's the yellow pages kind of hyper level of that. Chairwoman Wilson. Thank you, Mr. Weil. Thank you. Thank you very much. Ms. Jayapal. Thank you, Mr. Weil. I yield back. Chairwoman Wilson. Ms. Underwood of Illinois. Ms. Underwood. Thank you, Madame Chair. Dr. Weil, in your written testimony you pointed out that women are disproportionately represented in the types of short term and contract jobs that we are discussing in today's hearing. Generally, do these women have access to paid family and medical leave at work or even unpaid leave that protects their jobs? Mr. Weil. Thank you for the question, Congresswoman Underwood. The answer is no. According to most recent national compensation survey, only about 18 percent of private sector women have access to paid leave. And if we look at the bottom quartile, that number goes down to only 8 percent. Ms. Underwood. Wow. Based on your experiences at the Department of Labor, how does having access to paid family leave and medical leave benefit workers? Mr. Weil. In a huge way. Because of the absence of that leave, people face very difficult disruptive choices of leaving a sick child at home alone to fend for him or herself. Or a worker in a healthcare profession having to come into work when they're sick. And not only therefore running themselves down but exposing other people to their health problems. Ms. Underwood. Right. And that is awfully burdensome for both the worker and the employer. Mr. Weil. Absolutely. Ms. Underwood. Let us talk about how short term and contract work affects workers ability to save for retirement. Now most Americans with retirement savings have an employer sponsored plan like a 401K. Professor Rogers, do companies that use short term or gig workers in the U.S. generally offer these workers access to a 401K or other retirement account? Mr. Rogers. Not that I know of. No. Ms. Underwood. And why can access to an employer sponsored plan be so important to the workers ability to save for retirement Mr. Rogers. Well, let's say access to an employer sponsored plan of some sort would be really helpful. It's because the, you know, savings especially early during your career can compound over time. If you save in your 20's and 30's that can, you can accumulate a pretty significant amount of funding, especially by the time you retire. Ms. Underwood. And so how does limited access to those account affect the short term and gig economy worker? Mr. Rogers. It means those workers essentially have zero retirement savings. And I'll also add, I don't think this has been mentioned yet, because Social Security is not withheld typically-- Ms. Underwood. Right. Mr. Rogers.--the workers have to withhold it themselves and they may to be able to do that. Ms. Underwood. Retirement security is a big concern for my community in northern Illinois. According to the Federal Reserve, half of workers in this country think that their retirement savings are quote not on track. Like many Americans these workers may plan to rely on Social Security to supplement their income and retirement but short term and contract workers as you mentioned often receive less from employers there too. So for example, a mom and pop shop restaurant that hires an employee as a delivery driver pays Social Security and Medicare taxes for that employee, Professor Rogers, is that correct? Mr. Rogers. If they are an employee and if the employer is following the law, yes. Ms. Underwood. Okay. But most of the big food delivery apps that we are hearing about today are set up so that they don't have to cover those expenses for their drivers, is that right? Mr. Rogers. They're set up to evade those expenses is the way I would put it, yes. Ms. Underwood. Okay. And so instead even after tax deductions, many drivers for those company have to cover those Social Security and Medicare tax expenses themselves, right? Mr. Rogers. Correct. Ms. Underwood. The ability to save for retirement is crucial for American workers of all ages. But millennials are facing additional burdens. The Brookings Institution reports that it is more difficult for millennials to save enough for retirement than it is for previous generations. So this is for both Professor Rogers and Dr. Weil. As this committee continues conversations on the future of work, what are the essential components of policy that empowers workers and provides retirement security especially for younger Americans that we need to keep in mind. Let us do Dr. Weil first. Mr. Weil. I think the key is portability. I think both sides talk about portability. I think it's something we have to provide all workers so that they can move, work in situations and multiple employers and be able to save. But one can do that compatibly with also the protections we have under our employment laws. Ms. Underwood. Okay. Thank you. Mr. Rogers. I would just add to that designing portable benefits in such a way that workers have a voice in their design and administration and just general protections for the right to organize and general workplace protections which will make it easier for workers to save for retirement. Ms. Underwood. Thank you. While the future of work has the potential to offer many workers new flexibility and opportunities, we must ensure our policies and laws evolve at the same time to ensure that anyone who works full time can provide for their family. We must also ensure that these workers have access to high quality health insurance by protecting the Affordable Care Act and by lowering costs that make health coverage out of reach for far too many. I have introduced legislation to address this, the Healthcare Affordability Act, which would make insurance more affordable for nearly 20 million Americans including many of the workers we are discussing here today. Thank you, Madame Chair, for holding this important hearing and thank you to all of our witnesses for being here. I yeild back Ms. Jayapal. Madame Chair. Chairwoman Wilson. Thank you. Thank you, Ms. Underwood. Ms. Jayapal. I have a unanimous consent request. Madame Chair, I would like to introduce the following reports into the record. A 2018 data and society report entitled ``Beyond Disruption, How Tech Shapes Labor Across Domestic Work and Ride Hailing.'' A 2019 Institute for Policy Studies report entitled ``Protecting Domestic Workers Rights.'' And a statement by SEIU entitled the ``Future of Work, Preserving Worker Protections in the modern economy.'' Chairwoman Wilson. Without objection so ordered. Ms. Jayapal. Thank you, Madame Chair. Chairwoman Wilson. Ms. Stevens of Michigan. Ms. Stevens. Thank you, Madame Chair. And thank you to our witnesses. I thoroughly enjoyed reading through your testimony. I come from the great state of Michigan where the UAW strike is on everyone's mind and it is very visceral, it is very real, it has been going on for a long time. We know that we have reached a tentative agreement but that our UAW workers are still out there on the picket line and part of why they are striking is in part of what we are discussing at today's hearing. UAW contract negotiations as they have gone on throughout the years, you know, workers have been able to fight for increased wages and better benefits and unfortunately there is this model, this bargaining model has become increasingly less common. Although the conversation I had with one of my regional directors earlier today was that they believe that the work they are doing and that the strike that is taking place will have global ramifications. So, Professor Rogers, how do we encourage this type of model of sectoral bargaining across other industries? Mr. Rogers. So the auto industry is actually a, it's a really nice example of some of the merits of sectoral bargaining because pattern bargaining got the UAW close to sectoral bargaining for, you know, for long periods of time. And still in some ways gets the UAW close to sectoral bargaining. With the exception, with two exceptions basically. There are as you know quite a few non-union part suppliers into the auto workers today. Then there are also many non-union plants that have opened, especially transplants by foreign auto makers that have remained nonunion. So one of the challenges the UAW and the U.S. Automakers face is wage competition from those other entities. Sectoral bargaining could set a wage floor and, you know, ends that unfair competition. Ms. Stevens. Yes. And what type of role do portable benefits play and as, you know, negotiations are going on for current portable benefits systems. Could you speak a little bit about that? Mr. Rogers. In the-- Ms. Stevens. You mentioned it in your testimony I think and I know you talked about, you know, building wealth and protecting healthcare pensions but I don't know if you can talk a little bit about portable benefits? Mr. Rogers. I mean, I think in general providing high quality benefits that workers can get access to regardless of their skill levels and who they work for is essential. Portable benefits is part of that. I would just, I am a little cautious about a full-throated endorsement of portable benefits because in some cases, the proposals for portable benefits have essentially been framed so as to let many companies off the hook for duties they already owe toward workers. Ms. Stevens. Yeah. Well, and obviously we are here today talking about worker protections and, Ms. Beck, I know from your testimony which was really well done and your model is one to be commended and I think the conversation around the future of work in the 21st century age and how we grow a 21st century labor movement really speaks to maybe something that you could shed some more light on at a 10,000 foot view which is how we drive innovation but also ensure that workers' rights are protected? Ms. Beck. Yes, thank you for that great question. I very much believe investing in our workforce is investing in innovation. And the examples that I would give you are, you know, when our Alfred home managers are in the field or working with customers, it is their ideas and their observations that ultimately become the next great thing that our company does. So I think it's extremely important to view the relationship between a workforce and innovation as a very positive thing. Ms. Stevens. Yes. Well, at this time I would like to thank our two fabulous chairwomen who lead subcommittee on education and labor that I sit on and this is exactly what we are doing on this committee which is advocating for the individual worker and the voice of our economy that is relying on good and sound practices. And thank you all so much for your time and expertise today. Thank you. I yield back the remainder of my time, Madame Chairwoman. Chairwoman Wilson. Thank you, Ms. Stevens. I remind my colleagues that pursuant to Committee practice, materials for submission for the hearing record must be submitted to the Committee Clerk within 14 days following the last day of the hearing preferably in Microsoft Word format. The materials submitted must address the subject matter of the hearing, of this hearing. Only a Member of the Committee or an invited witness may submit materials for inclusion in the hearing record. Documents are limited to 50 pages each. Documents longer than 50 pages will be incorporated into the record by way of an internet link that you must provide to the Committee Clerk within the required timeframe. But please recognize that years from now that link may no longer work. Again, I want to thank the witness for their participation today. What we have heard is very, very valuable. Members of the committee may have some additional questions for you and we ask the witnesses to please respond to those questions in writing. The hearing record will be held open for 14 days in order to receive those responses. I remind my colleagues that pursuant to Committee practice, witness questions for the hearing record must be submitted to the Majority Committee Staff or Committee Clerk within 7 days. The questions submitted must address the subject matter of the hearing. Closing statements. I now recognize workforce protections Ranking Member Ms. Adams for closing statement. Ms. Adams. Thank you, Madame Chair, and thank you all very much for being here. I do want to echo my appreciation to the witnesses for taking the time to be with us today. The Fair Labor Standards Act and the Occupational Health and Safety Act were passed with the core mission of guaranteeing workers fair wages, reasonable hours and safe work places. Yet as our witnesses made clear, under the fissured work place workers today are facing a race to the bottom that undermines basic worker protections. In response, Congress must take bold, decisive action to protect workers. I look forward to working with my colleagues to improve the lives of workers and to restore the purpose of our essential labor and employment laws. So thank you again to our witnesses for your testimony. The takeaways from this hearing will provide important context as we look ahead to our next future of work hearings. These hearings will focus on how we can empower workers with competitive and in demand skills to avoid displacement and protect workers' civil rights amid the growing use of platforms and algorithms in employment related decision making. But most importantly, today's hearing will help guide this committees' continued efforts to improve the lives of workers and serve our constituents. I yield back, Madame Chair, thank you. Chairwoman Wilson. Thank you, Dr. Adams. I now recognize now workforce protections Ranking Member for his closing statements. Mr. Byrne. Mr. Byrne. Thank you, Madame Chairman, and I appreciate this hearing. The title of it is the future of work, preserving workforce protections in the modern economy and I think it is a very important topic. I appreciate all of the witnesses being here today. I would have like to have heard from a worker. I do talk to workers a lot. Not just when I am out doing my thing as a Congressman but sometimes when I go around visiting businesses I want to stop and talk to the people that work at the business. How are you doing? How is the place going? They seem pretty happy to me. We have three percent unemployment in Alabama right now. There is a recent study out that shows that the people who benefitted the most in terms of wage performance are people at the bottom who are seeing wage increases like they haven't seen in many years. I have yet to have one person at any of my town halls, at any of the businesses I have visited anywhere, come up to me and say I don't think I have enough workforce protections or anything close to that. They are mainly worried about making sure that we are going to have an economy that produces the jobs that they need to make money and provide what they need to provide for their families. I am see--I encounter a large number of people who are working in what I consider to be alternative type work situations. That is just the future, I think. When we talk about the future here, I think that is the future. We have fewer jobs where people show up for the same place 9 to 5 and more situations where people will be working out of their homes or in other situations. And I don't think our laws match up with that. I don't think they do all. Because we haven't rethought them in decades. But we still have this old mindset that are an all working in factories, doing the same repetative thing over and over again. If you have been into a modern factory, you know that is not the case anymore. It is dramatically different. We have benefitted a lot in the state of Alabama from a manufacturing resurgence. Automotive, aviation, you name it. And when I go in those places and I see how they are producing what they are producing it is unreal. It is like going into some sort of a science fiction movie, the way they do it. And they are constantly innovating, and the innovators are the workers. It is not the management that is doing the innovation, it is the men and women on the line. And it is really cool to watch them do what they do by the way, they are really good at it. Not once have I had one of them come to me and say, ``I wish I had a union.'' Not once has anyone ever said to me, ``I wish I had a union.'' I am afraid if they had sat through this hearing today, they would say that doesn't have anything to do with what I am thinking about, what I am concerned about in my job. And noticing everything that I said right now, I didn't talk about the people that owned the businesses or run the businesses. I am talking about the people that work there. And I think we have missed the mark today. I think we should be sitting down and talking to those workers and say what do you need? You know, my experience is most of the people that own and manage these businesses do that. They sit down with their workers and say what do you need? Because they can't be a successful business if those employees are not working at maximum efficiency, maximum quality. Now there are more and more people as I said becoming independent contractors. And I think we have to understand they are doing that by choice. They want the flexibility that comes with that. And here comes the big Federal Government with a bunch for new regulations out there that are going to make independent contracting very difficult. So I wish we could have a different hearing where we brought in the workers and we asked the workers what do you need. And I think we would get a very different set of answers than what we got today. Thank you for holding this hearing and I yield back. Chairwoman Wilson. Thank you, Mr. Byrne. We can say that the workers need workforce protection and that is what our committee is slated to do at this, as we move forward. I am going to now recognize myself for the purpose of making a closing statement. I want to thank our witnesses for their compelling testimonies today. This hearing revealed the challenges posed by the changing relationship between employers and workers. As we heard from today's witnesses, the increasing share of workers hired as subcontractors, temporary workers, or independent contractors is undermining workers' rights and protections. We know that innovation has the potential to improve the lives of workers, but Congress must ensure that innovation does not come at the expense of our nation's labor laws. At the end of the day, we have the responsibility to preserve and strengthen workers' rights. Today we discussed some of the opportunities we have to pass legislation this Congress that will improve the quality of life for workers and their families in the modern economy. As we move forward, I look forward to working with my colleagues to advance bills like the Protecting the Rights to Organize Act, the PRO Act, which will help reduce income inequality and expand access to the middle class. I also look forward to a continued discussion on how we can meaningfully expand benefits for workers and how industry wide bargaining can truly achieve improvements for workers in the fissured workplace. If there is no further business, without objection, the committee stands adjourned. And thank you for coming. [Additional submissions by Ms. Jayapal follow:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Beyond Disruption: How Tech Shapes Labor Across Domestic Work & Ridehailing https://www.govinfo.gov/content/pkg/CPRT-116HPRT46455/pdf/ CPRT-116HPRT46455.pdf [Questions submitted for the record and their responses follow:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [Mr. Weil response to questions submitted for the record follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [Whereupon, at 12:43 p.m., the subcommittees were adjourned.] [all]