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March 9, 2021 Issue:

House Passes H.R. 842, the Protecting the Right to Organize (PRO) Act

Action Taken: On March 9, the U.S. House of Representatives voted to pass H.R. 842, the Protecting the Right to Organize (PRO) Act along mostly party lines. This wide-reaching bill seeks to reform current labor law in a variety of areas. Impacting the insurance industry, the bill amends the National Labor Relations Act (29 U.S.C. 152(3)) by adding language that expands the definition of “independent contractor” by adopting an “ABC” test to define who is an “employee.”

A coalition of industry activists led by NAIFA and its partners worked for the inclusion of an insurance carve-out that would exempt insurance producers, independent broker-dealers (IBDs), and independent financial advisors (IFAs) from provisions of the act that could strip independent contractors in the insurance field of their current status and employment classification. The PRO Act redefines the relationship shared between these individuals and the insurance industry. This relationship ensures consumers have the greatest access to products being offered by the insurance industry. Creating a new standard that does not exempt these vital individuals from the PRO Act’s ABC test severely limits the scope of insurance products consumers would have access to as well as general distribution of insurance products and investment advice, thereby limiting consumers' ability to protect themselves and their loved ones.

Although multiple amendments that would have achieved this insurance carve-out were submitted by Members of Congress, the House elected to pass H.R. 842 without adopting an amendment.

NAIFA conducted a survey of its members to fully understand how the PRO Act would affect their business operations as well as their ability to best serve their clients. View survey results.

Next Steps: After passage in the House, efforts now move to the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP). NAIFA will continue to work with members of the Senate's HELP committee to educate members and staff on the importance of retaining independent contractor status for the insurance industry. NAIFA members wanting to take action can contact their Senators today to share their opinion on this important issue.