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Pro Act threatens small business recovery

(Deposit Photos/Air Done)

(Deposit Photos/Air Done)

After reading a recent op-ed in the Arizona Capitol Times by Samuel Sprague (Contact Sinema, Kelly; support the Pro Act), we thought we’d give a different perspective and show the dangers of the PRO Act on the economy of Arizona.  Small and independent businesses across the state are still struggling to recover from the economic fallout of the pandemic. The road to recovery for small businesses has been a long and uneven one, due to varying government-mandated regulations on different industries and in different localities. Now, legislation in the U.S. Senate poses a potentially even larger threat to Arizona businesses than the pandemic.  

Chad Heinrich

Chad Heinrich

S-420, the Protecting the Right to Organize Act of 2021,or PRO Act, would enact a host of provisions that would restrict the normal business activities small businesses have practiced for decades. One of the most egregious provisions within the PRO Act is its rewrite of independent contractor law. It would adopt a stricter version of California’s ABC independent contractor test which would significantly curtail the ability of small-business owners to hire and work with independent contractors to fulfill tasks that are essential to their business. This limitation is not only a problem for small employers but also for independent contractors.The National Federal of Independent Business represents thousands of contractors that choose to operate independently and do not want to be considered W-2 employees. However, if the PRO Act passes, they won’t have a say in the matter, and in many cases, they will lose their contracts. Even California’s legislature and voters, when implementing its strict ABC test realized the flaws and have approved exemptions for dozens of different industries. The PRO Act’s ABC test contains zero carve-outs.    

The PRO Act also threatens the traditional franchise model by adopting a “joint-employer” standard that could end the ability to independently own franchises. The proposed standard would make all franchisees and franchisors jointly responsible for employees. This joint responsibility has the potential to end the independence that local franchisees have enjoyed for decades.    

Further, the PRO Act contains provisions that would unfairly put the proverbial finger on the scale in favor of organized labor during union elections. It would abolish all “Right to Work” laws passed by more than two dozen states, including Arizona. That means that Arizona employees would once again be forced to pay union dues even if they are not a member—or else face the possibility of losing their job. Here in Arizona, our “Right to Work” laws are written into our state constitution, and the PRO Act would rescind them all without Arizona lawmakers or voters having any say in the matter.   

Even businesses that have nothing to do with a labor dispute could find themselves facing economic damage under the PRO Act. That’s because it would lift all restrictions on unions, allowing them to participate in secondary boycotts up and down the supply chain. For example, a small manufacturer that supplies a widget used in the production of airplanes could be boycotted and picketed if the airplane manufacturer and their union have a dispute. For a small business, this type of boycott or picketing could ruin them.    

The PRO Act currently has 47 cosponsors in the United States Senate. Arizonans should be proud that Senators Kyrsten Sinema and Mark Kelly are not among those 47. I thank the Senators for standing up for small businesses and urge them to remain strong as they continue to be pressured by special interests in support of the PRO Act.     

Chad Heinrich is Arizona state director for the National Federation of Independent Business 

 

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