The Tangled Web
In Congress this week, I detailed how "new" research that leads to freelance busting is actually as old as 1984—and in New Jersey, just plain wrong.
I’ve testified twice now before Congress about the need to protect independent contractors, first in 2023 and again this week. One thing I’ve learned in that particular Thunderdome is that a lot of the witnesses are professional testifiers. They make a living going from hearing to hearing, entering testimony into the public record so it can become the basis for more testimony, legislation and regulations. Their whole job is to perform this task just right, so they will be invited back to testify again.
But if you actually try to read these experts’ research and reports, your eyes will bleed. It’s always a slog that’s buried in footnotes, wrapped in acronyms and then smothered in so many statistics, it sometimes looks like binary code.
On top of that, congressional procedures only give lawmakers a few minutes to question these witnesses—which is why the professional testifiers don’t get publicly fact-checked very often. For that to happen, especially on a lower-profile issue like independent-contractor policy-making, somebody has to show up in the Thunderdome and be ready to launch when the right question gets asked.
Sadly for the freelance-busting brigade, I am one such person.
I’ve spent more than 30 years as a professional writer and editor, ever since I earned my journalism degree in 1994. The Thunderdome is not my usual hangout. Instead, I spend all day, every day working with words. I earn my living in large part by making sure facts are accurate, to the very best of my ability, in whatever I write and in quite a lot of what other people write, too.
Suffice it to say that I know how most writers’ minds work. I have a well-honed instinct for spotting a thread I should pull on because the facts might be tangled up in some kind of web.
That’s the feeling I got when I read this article in Newsweek a little more than a year ago. It was written by Rebecca Dixon, president and CEO of the National Employment Law Project. NELP is a think tank that has been deeply involved in pushing claims about independent-contractor misclassification, at the state and federal levels alike. If you are a person who believes we should all have the freedom to be self-employed, then NELP has long been your opposition—and has quite likely had somebody testify or supply information to policy-makers at a hearing near you.
This article in Newsweek made a claim I’ve seen attributed to NELP countless times, that 10% to 30% of independent contractors are misclassified:
The thing is, when I clicked on that hyperlink to view the “2020 analysis,” it didn’t go to a 2020 analysis.
And it wasn’t a typical URL typo. That’s what happens when a writer inserts something like .org where .com should be, or where two letters in the URL get transposed and send you to an error page. Writers make those kinds of mistakes all the time. They’re garden-variety typos. Sloppy, nothing more.
This hyperlink in Newsweek was a different kind of typo. The words “2020 analysis” actually did lead to a report about independent contractors—one that was written not in 2020, but instead in 2009.
A wrong hyperlink of that nature is a red flag to any decent editor that there’s probably an association in the writer’s mind between the words in the hyperlink and where that link goes. Any experienced editor will pull on that thread to figure out if there’s an actual problem with the facts.
Which is precisely what I did.
At the end of that slog through all the footnotes, acronyms and data, one glaring reality became shockingly apparent.
The “new” research about independent contractors that NELP has been pushing as the basis for freelance busting nationwide is shockingly old and biased—and my home state of New Jersey added its own questionable research to it.
The 10% to 30% (and New Jersey’s 40%) Claim
My full written congressional testimony about what I found is below. It’s available as part of the public record with footnoted citations here.
If you prefer video, then you can watch me read part of it in response to a question from Congressman Randy Fine of Florida here:
My testimony:
As a matter of routine, freelance busters claim that 10% to 30% of independent contractors in the United States today are misclassified. Congress should question this claim.
The 10% to 30% range is often attributed to 2020 analysis by the National Employment Law Project (NELP). This analysis is built in part on information that is shockingly old, devoid of independent contractor voices, and not representative of modern work:
• NELP’s 2020 analysis cites a February 2000 analysis known as the “Planmatics study” that was researched in the 1990s.
• Authors of the “Planmatics study” did not interview independent contractors. They did include viewpoints of the AFL-CIO and Economic Policy Institute, which claimed “the typical career paradigm is characterized by lifetime employment with a single employer, steady advances up the job ladder, and a pension upon retirement.”
• That is not the typical career paradigm today. The U.S. Bureau of Labor Statistics, in 2023, cited people having an average of 12.7 jobs over their working lifetime.
• In terms of how independent-contractor status is determined, the Planmatics study states: “The three requirements under the ABC test are the same for all states.” That is also demonstrably false today. Some states are now editing or interpreting this three-prong test to determine independent contractor status in ways that make it all but impossible for many independent contractors to pass without exemptions. Top attorneys noted that in California, Assembly Bill 5 used approximately 130 words to describe the ABC Test, and approximately 3,478 words to describe the exceptions. In New Jersey, a top labor attorney wrote that: “The proposed regulation pertaining to Prong A departs in a dramatic manner from virtually every other test for IC status under federal law and the laws in every state — and unless clarified in the final version of the regulation, would not merely tilt the balance in favor of employee status and against legitimate ICs but rather lead to the elimination of all ICs in New Jersey.”
Another frequent citation for this 10% to 30% range is a 2009 report from the U.S. Government Accountability Office—that is based on research as old as 1984. The first words of that 2009 GAO report actually state: “The national extent of employee misclassification is unknown.”
Here is the first paragraph of that 2009 GAO report in its entirety:
“The national extent of employee misclassification is unknown; however, earlier and more recent, though not as comprehensive, studies suggest that it could be a significant problem with adverse consequences. For example, for tax year 1984, IRS estimated that U.S. employers misclassified a total of 3.4 million employees, resulting in an estimated revenue loss of $1.6 billion (in 1984 dollars). DOL commissioned a study in 2000 that found that 10 percent to 30 percent of firms audited in 9 states misclassified at least some employees.”
In that last sentence of the 2009 GAO report, please note the use of the 10% to 30% figure from the 2000 “Planmatics study” that is based on outdated 1990s research.
Similarly, in my home state of New Jersey, Congress should be aware of the “Report of Governor Murphy’s Task Force on Misclassification” issued in July 2019. This report led to a package of six new laws that the state called “sweeping” in 2020. This 2019 New Jersey report cited research from NELP and misrepresented data from Harvard Business Review. The first two sentences of the New Jersey report state:
“Misclassification is the practice of illegally and improperly classifying workers as independent contractors, rather than employees. This practice has increased by approximately 40% in the last ten years, and is a growing problem in New Jersey (and other states).”
The footnote for that 40% figure in the New Jersey report cites a Harvard Business Review article whose author actually wrote this:
“The use of independent contracting has grown dramatically over the past decade, with one estimate suggesting it has increased by almost 40%, going from 6.9% of employment in 2005 to 9.6% in 2015. According to a 2009 report issued by the United States Government Accountability Office, a significant portion of independent contracting doesn’t pass the smell test and in fact represents misclassification of workers. …”
There is a Grand Canyon-size chasm of difference between the statement that independent contracting has grown by almost 40%—in a nation where two-thirds of Americans say they would prefer to be their own boss—and the assertion that misclassification of employees has increased by approximately 40%.
And, yet again, please note the reference to the 2009 GAO report that is in fact based on research as old as 1984.
Congress should also be aware of what appears to be circular report-writing, in which federal analysis is used as the basis for state analysis that becomes the basis for “new” federal analysis. This happened with NELP’s October 2020 policy brief titled “Independent Contractor Misclassification Imposes Huge Costs on Workers and Federal and State Treasuries”:
• Governor Murphy’s 2019 report on misclassification in New Jersey cites NELP research as the basis for its some of its claims.
• The 2020 NELP policy brief cites Governor Murphy’s 2019 report as the basis for some of its claims.
Notably, more than two years after Governor Murphy signed New Jersey’s sweeping package of misclassification laws in January 2020—with state Labor Commissioner Robert Asaro-Angelo saying they would “protect employees who are misclassified as independent contractors”—the state Senate Labor Committee held a hearing March 10, 2022, to question Asaro-Angelo. Committee Chairman Fred Madden, a Democrat, noted at one hour, eight minutes that when it comes to the enforcement of misclassification policy in New Jersey, Asaro-Angelo had only taken action in 44 cases after all those new laws had gone into effect.
The New Jersey Labor Department’s April 2025 announcement about proposed independent-contractor rule-making states that the department has now exercised its new powers 185 times, along with assessing a first-of-its-kind misclassification penalty—yet only about 12,500 misclassified workers had received payments since September 2021. The total amount paid to those workers was about $10.6 million, meaning an average per-person payment of $848.
At the same time, a recent estimate put the number of New Jersey independent contractors at just shy of 1.7 million, with the cost of reclassifying even half of them at more than $5 billion.
Asaro-Angelo is now claiming this new rule-making is needed to “prevent the illegal misclassification of employees,” while a top labor attorney says what’s being proposed “would not merely tilt the balance in favor of employee status and against legitimate ICs but rather lead to the elimination of all ICs in New Jersey.”
Scrutiny Must Be Applied
This kind of “expert” analysis by NELP and other members of the freelance-busting brigade is being used as the basis of testimony, task force reports, legislation and regulations all across the country. It’s been going on for years.
As I testified on Capitol Hill this week, Congress should question these claims about independent contractors. I’m working with a lot of lawmakers now to get the Modern Worker Empowerment Act into law as protection against freelance busting at the federal level, so this information is already on their radar in Washington, D.C.
I am also urging key people at the Statehouse here in New Jersey to apply scrutiny—and I’m pleased to say that after this week’s testimony in Washington, state-level lawmakers and lobbyists are already reaching out to me from Trenton with more questions of their own.
Feel free to share any or all of this with your own lawmakers, in every state and congressional district, all across the land.
You don’t even have to go through the slog. All you have to do is click “share.”