Rep. Eleanor Chávez of Albuquerque
STATE News:
ALBUQUERQUE — This week, New Mexico State Rep. Eleanor Chávez (D-Albuquerque) led 113 fellow state legislators across 23 states in a joint letter opposing a U.S. Department of Labor proposal that threatens the benefits of American workers and solvency of state governments.
The Department’s proposal would revoke rules in the Fair Labor Standards Act for determining whether a worker is classified as an employee or an independent contractor. This change is expected to reclassify 250,000 American workers as independent contractors, putting their benefits and worker protections at risk. It would also shift the responsibility for hundreds of millions of dollars in unemployment insurance, workers’ compensation, and Medicaid costs onto the states.
Despite the widespread repercussions of the proposed rule change, the Department has reportedly not conducted a thorough analysis on impacts of the rule or provided an estimation of its fiscal impact on states and workers.
“This is the latest example of the Trump administration turning its back on working people, and leaving states responsible for cleaning up their messes,” Rep. Chávez said. “Rather than protecting the hardworking people at the heart of our economy, the Department of Labor is trying to upend vital workforce systems, without even doing its homework on how much damage it will cause.”
The letter, signed by Chávez and 33 other state lawmakers from New Mexico, outlines the specific, quantified fiscal risks this rule would place on states. State legislators estimate that state social insurance programs could lose more than $970 million annually and note that the rule would place a substantial downstream burden on vital state programs like Medicaid and social services.
Independent contractors are nearly twice as likely as payroll employees to lack health insurance and more than twice as likely to rely on public insurance programs.
“By increasing the number of independent contractors by hundreds of thousands and removing their access to workplace benefits, this proposal essentially shifts the Department of Labor’s federal benefit costs onto the states and taxpayers,” Chávez added.
The letter issued this week calls on the Department to withdraw its proposed rule, or to at least conduct a comprehensive analysis of the rule’s fiscal impact on state governments before taking further action.
Read the full text of the letter, and its list of nationwide signatories: file:///C:/Users/caclark/Downloads/Letter%20to%20Dept.%20of%20Labor-2.pdf