Unions, businesses urge legislators in opposite directions on independent contractor rules

May 11, 2026 - 18:51

Business associations and freelance advocates are pushing state lawmakers to roll back recently adopted worker classification rules, while labor unions are urging them to keep the regulations in place. The opposing appeals came during a legislative hearing on Tuesday, highlighting a deepening divide over how to define who qualifies as an independent contractor.

The rules, which took effect earlier this year, tighten the criteria for classifying workers as independent contractors rather than employees. Supporters, including major labor unions, argue the changes protect workers from misclassification, which can deny them access to minimum wage, overtime pay, unemployment benefits, and workers' compensation. They say many companies have exploited the independent contractor label to avoid paying taxes and providing benefits.

But business groups and freelance organizations contend the rules are too broad and harm the gig economy. They claim the new standards make it harder for legitimate freelancers, such as graphic designers, writers, and delivery drivers, to find work. Several trade associations testified that the regulations create confusion and increase legal risks for small businesses that rely on contract labor. They asked lawmakers to either delay enforcement or rewrite the rules to exempt certain industries.

The hearing ended without a vote, but both sides plan to continue lobbying before the next session. The outcome could affect thousands of workers and employers across the state.