Senators Ron Wyden (D-OR) and Michael Bennet (D-CO) have developed a proposal that they say would update and expand unemployment insurance so that the program is ready to respond to the next recession and meet the needs of the modern workforce.
NAIFA joined industry partners in a letter to Senate Finance Committee leadership to express strong concerns with a provision in the committee’s current discussion draft of the Unemployment Insurance Modernization Act.
Specifically, Section 212 of the discussion draft would require that states use the “ABC test” for the purpose of determining whether a worker is considered an employee eligible for unemployment insurance. This change would significantly disrupt the independent financial services and property-casualty insurance industries and negatively impact their ability to help Main Street American families and businesses build secure financial futures and protect their assets.
Using the “ABC test” would create the presumption that all services performed by an individual for pay constitute employment, unless the employer can satisfy all three prongs of the “ABC test.” The “A” prong of the test requires that the worker be free from the employer’s control. Financial services professionals who are independent contractors would likely be characterized as employees because they are not free from the control of the broker-dealer, registered investment advisor, or insurance company’s supervision – even though that supervision is solely to comply with federal and state securities and insurance laws and FINRA requirements.