PIA Opposes Narrowing “Independent Contractor” Definition

June 22, 2021

PIA is raising concerns about the draft legislative text of the Unemployment Insurance Modernization Act, which is being championed by Senator Ron Wyden (D-OR), Chairman of the Senate Finance Committee, and addresses unemployment insurance reform. Specifically, the discussion draft would require states to use an “ABC test” to determine whether a worker is considered an independent contractor or an employee.

The ABC test would essentially create a presumption that all services performed by someone for pay constitute “employment,” unless the employer can satisfy all three elements of the ABC test.

Using the ABC test, insurance agents who are independent contractors could be forced into “employee” status by virtue of their contractual relationship with the carriers they work with and their supervision by their carrier partners.

This change would upend the employment classification of independent agents and, by imposing federal law on our state-based insurance regulatory system, threaten the very existence of that system. PIA will continue to oppose any legislation that would substantially narrow the definition of independent contractors to the detriment of independent insurance agents.