The Lady Problem
Overly restrictive independent-contractor policy has a disproportionate, negative impact on women. Here’s why.
“For the 11th consecutive year, women remain underrepresented at every level of the corporate pipeline—especially in senior leadership, where they make up just 29 percent of C-suite roles…”
I’ve been hearing statistics like that one from a recent McKinsey & Company report ever since I was a little girl in the 1970s and ’80s. Except back then, the percentage was even lower. The message I received as I entered the workforce and looked around in the 1990s was clear: No matter how smart I am or how hard I work, most of the time, the men will get the promotions.
And the sexism would be overt. When I dished pizza during summers on the Jersey Shore, l quickly learned that the men got to be the cooks with higher salaries while the women were always the waitresses, smiling pretty for tips.
When I became a daily newspaper editor, I had a boss who would only speak to me on the days that I wore miniskirts.
When I earned the job of executive editor at a national boating magazine in the early 2000s, the men informed me that my writing was perfect for “the girlie beat.” That’s really what they called coverage of the global yacht charter industry. They would write about the boats as men do, about construction and how it felt to take the helm—they were captains, all of them, at least in their own minds—while I would write about how to be a guest on board, quite literally sitting in the back with the other ladies.
Entrepreneurial, hardworking women like me had to figure out how to achieve our potential within this reality, which is one reason why, in 2003, I quit my executive editor job and became a freelance writer and editor.
I found success within weeks of working from home, where all the in-office sexism vanished. An AOL dial-up Internet connection was my freedom to be out of sight, out of mind. All the editors ever saw was the copy I produced, which was quite often better than the copy they produced. When they gave me assignments, their jobs as editors became a lot easier.
Within a few years, I was earning more than almost all the men who were still on staff. I was building websites, writing books and doing all kinds of things that allowed me to succeed.
And for the next two decades, that solution to sexism held with precious few problems.
Until 2019, when lawmakers in my home state of New Jersey informed me and every woman like me across hundreds of professions that they were going to “protect” us all from misclassification by legally shoving us back into the category of employees.
We lined up at the State House in droves to tell them no, stop, you’re hurting us.
You’re spreading hysteria, they replied.
They were going to make all of my hard-won freelance business relationships illegal while trying to convince me it was for my own good, and while trying to make me feel crazy for being angry about it.
I’m Far from Alone
According to the U.S. Small Business Administration Office of Advocacy, among all the businesses that women own, about 90% have no employees. This is a significantly higher percentage than for men, who are more likely than women are to have other people working for them. Women small-business owners tend to go it alone as a sole proprietor, LLC or S Corp, just like I did.
This is why overly restrictive independent-contractor policy has a disproportionate, negative impact on women.
When lawmakers restrict self-employment, they are by definition disproportionately targeting and threatening women-owned small businesses.
Years’ worth of research bears this out. In California, after lawmakers passed the freelance-busting law known as Assembly Bill 5, the Biden administration created the California Advisory Committee to the U.S. Commission on Civil Rights to examine the law’s effects. Members of that committee listened to hours upon hours of testimony and then issued a report.
It stated:
“Many of the workers we heard from are women, immigrants, people of color and from other politically disadvantaged groups. While some workers had positive experiences with AB5, the bulk of the testimony we heard suggested AB5 had a decidedly negative impact, causing individuals to lose work and no longer have the option to be independent contractors.”
Similarly, when economists from the Mercatus Center (led by a woman, Liya Palagashvili) looked at the effects of New Jersey’s increasingly restrictive “ABC Test approach” to independent contractors, they found not only declines in W-2, self- and overall employment, but also this:
“The New Jersey data reveals stark gender disparities: women’s traditional W-2 employment declined by 7.40%, while men’s showed no significant change—raising concerns about disproportionate impacts on women following the policy change. This pattern suggests the policy may inadvertently create gender-specific barriers in the labor market while failing to deliver its promised worker protections.”
These results are common sense. As the Federal Reserve has noted:
“Compared to their male-owned counterparts, women-owned firms are less likely to be fully approved for the funding that they need to sustain and grow their small businesses.”
If you restrict the way of working solo that a lot of women choose as a way to solve all these kinds of systemic problems, you’re going to hurt a lot of entrepreneurial women.
New Jersey’s Legislature Should Act Urgently
On October 1, an overly restrictive independent-contractor rule is scheduled to take effect here in New Jersey unless our Legislature steps in to invalidate it.
Assemblywoman Vicky Flynn—one of just 36 women among 120 state lawmakers—is the primary sponsor on the Assembly version of a concurrent resolution that would invalidate the rule and protect us all.
As she rightly stated in opposing the rulemaking from the start:
“These rules punish workers who choose independence. Contracting isn’t a loophole—it’s a lifeline.”
The Legislature should support this concurrent resolution, not just because of testimony in recent months that revealed employee misclassification isn’t a big problem in the first place, but also to make clear that the state supports all of us women who own and operate New Jersey’s smallest of small businesses.
We are the translators, the financial advisers, the graphic designers, the traveling nurses, the dog walkers, the wedding planners, the writers, the photographers and so many, many more types of professionals who are worthy of real protection against this relentless, remorseless freelance busting.
The C-suite isn’t the only path to success. Never has been, never should be.