The Department of Labor (DOL) rang in the New Year by finalizing a rule on independent contractor classification. The rule provides another way forward for freelancers after California’s disastrous AB 5 law decimated the incomes of hundreds of thousands of independent contractors in the state.

Unlike AB 5, the new DOL rule doesn’t assume that full-time employee status is what’s best for most workers. Instead, the rule establishes a clear method for distinguishing between a full-time employee and an independent contractor. It considers whether workers are economically dependent on their employer or mainly in business for themselves. It also takes into account how much control a worker has over their own profit and responsibilities.

Before finalizing the rule, the DOL accepted almost 2,000 comments regarding the proposed classification method, including hundreds from gig workers who voiced support for the rule. Below are just a few comments from workers who prefer the choice and flexibility that comes with being an independent contractor over full-time employment. 

• “With our family and other responsibilities it is impossible for me to work a regular job with fixed hours. The gig flexibility allows me to work nearly every day when and where I can and still earn the needed income.”
• “In a year with a pandemic, record high unemployment and, for me, Covid-related heart failure, I made more money than I did last year. How? By being an independent contractor.”
• “As a working mom, the flexibility I have from being my own boss is priceless. I’m able to be there for my son and balance work and family obligations as I see fit, without having to depend on getting an employer’s approval.”
• “Driving as an independent contractor allows me the opportunity that no other part-time job can. As a father of 4, flexibility around my work schedule is CRITICAL for me to be able to uphold family values and still be able to fight to survive on this added income.”

According to DOL officials, the rule received about 900 comments from rideshare drivers alone, the majority of whom supported the rule. More than 200 comments came from other freelancers. Overall, freelancers supported the rule 20 to 1.

The DOL rule, which goes into effect on March 8, allows actual workers to decide how they earn a living — not the government. You can bet unions won’t be thrilled about this deference to worker choice, and will likely see the rule as yet another roadblock. (Classifying more freelancers as employees would make organizing much easier, particularly in the gig economy.) But workers will be better off for it.

Yesterday, the Center for Union Facts submitted commentary on a proposed rule from the Department of Labor that would update the way labor unions report financial information to the federal government. The commentary notes that the changes proposed in the Federal Register’s notice of Proposed Rulemaking — published October 13, 2020 — would help weed out corruption in the ranks of union leadership.

As the years-long federal investigation into corruption at the United Auto Workers comes to a close, these updates are a critical way to minimize opportunities for fraud and embezzlement at our country’s labor unions. Former high-ranking officials at the UAW were able to get away with their crimes due, in part, to a lack of reporting standards surrounding union travel. In fact, the Department of Labor has since ​observed​ tha​t “much of the illegal conduct at issue in the UAW scandal was facilitated by or concealed through false and inadequate financial reporting by union officials.

As the ​Wall Street Journal​ editorial board​ has pointed out,​ the UAW is not the only union that’s been marked by scandal: “Such corrupt labor practices are widespread. The Labor Department audits unions, and in 2016 nearly one in five such inspections led to a criminal case.” Clearly, the current mechanisms by which union members and government oversight bodies gauge union fiscal health and spending do not go far enough.

Our commentary highlights two proposed updates in particular that would bring more transparency to union finances. The first would require unions to report “indirect disbursements for travel-related expenses when payment is made” directly through a union credit card. Currently, union travel expenses that are paid for directly by the union are not disclosed on LM-2 forms. A second update would alter the language for discovering a shortage of union funds from “discover” to “aware of/discover.” Though small, this change would drive more reporting of questionable union financial activity.

While the DOL’s proposed rule would apply certain reporting changes only to unions with receipts of $8 million or more, CUF recommends applying the suggested changes to all unions with receipts of $250,000 or above. This way, members of mid-level unions will have access to the same information as those at larger unions.

It may be too late for the UAW, but the DOL’s recommended changes should be finalized immediately to mitigate similar corruption schemes from taking place in the future. 

Former president of the National Education Association (NEA) Lily Eskelsen Garcia is reportedly in the running to be president-elect Joe Biden’s Education Secretary. But Eskelsen Garcia has a history of prioritizing teacher union interests over students — a track record the Center for Union Facts (CUF) will highlight tomorrow in a full-page ad in the Wall Street Journal. 

Eskelsen Garcia is known for vehemently opposing credible education reforms. Under her leadership, her union even sued to get rid of teachers’ evaluations. As the ad states, she’s attacked certain performance assessments as “the mark of the devil,” and likened some school reformers to zombies that are “eating our childrens’ brains.”

Her attacks on efforts to partially gauge teachers’ performance on test scores have demonized student improvement reforms. Claims that using test scores as a metric for success mean that teachers must “hit [their] number or…get punished” are unfounded. In fact, for teachers whose test scores are available for review, these scores have rarely accounted for more than half of their evaluation. In 2019, 41 states required “more than two rating categories in their evaluation systems,” and 37 states “required all or some of their teachers to be evaluated multiple times.” One study reported that even after assessment reforms were made, less than one percent of evaluated teachers were found to be “unsatisfactory.”

Eskelsen Garcia has also made her stance on charter schools clear, calling them “very misguided.” But multiple studies have shown charter schools “provide substantial academic benefits” to the students that attend them.

Eskelsen Garcia’s efforts to diminish competition and accountability in our education do more to promote teachers unions’ selfish interests than help students. A former union boss who opposes credible school reforms shouldn’t be in charge of the future of education.

This Holiday Season, more than a few union bosses can expect to get coal in their stockings. Check out the latest labor rackets from November below.

In Maryland, Sarah Geddes Holmes, former Secretary-Treasurer of International Association of Machinists (IAM) Local Lodge 24, was charged in a criminal information with one count of embezzlement from a labor organization (29 U.S.C. 501(c)) and one count of bank fraud (18 U.S.C. 1344) for embezzling $294,585 from the union.

In Michigan, Joseph Ashton, former United Auto Workers (UAW) International Vice President in the General Motors (GM) Department and former director of the UAW-GM Center for Human Resources (CHR), was sentenced to 30 months in prison and 12 months of supervised release. Ashton was also ordered to forfeit $250,000 in proceeds from his crimes and to pay a $200 special assessment. On December 4, 2019, Ashton pleaded guilty to one count of conspiracy to commit honest services wire fraud (18 U.S.C. 1349) and one count of conspiracy to commit money laundering (18 U.S.C. 1956(h)). Ashton knowingly joined a conspiracy whereby he and others used their positions with the UAW and CHR to enrich themselves by obtaining a $250,000 loan from a vendor, assisting the same vendor in obtaining a contract from CHR valued at over $3,900,000, and then suggesting that the profits would repay the vendor what was owed on the loan. After the vendor was awarded the contract from the CHR, Ashton demanded at least $250,000 in kickbacks. .

In New Jersey, Angel Luis Garcia, former Financial Secretary of Amalgamated Transit Union (ATU) Local 1614, was sentenced to 12 months of home confinement with electronic monitoring and three years of supervised release. Garcia was also ordered to pay $119,021 in restitution and a $100 assessment. On June 23, 2020, Garcia pleaded guilty to one count of embezzling union funds in the amount of $117,000.

In Arkansas, Michael Johnson, former President and Business Manager of International Brotherhood of Electrical Workers (IBEW) Local 1658, was sentenced to five years of probation, with the first six months on a curfew with location monitoring. He was also ordered to pay $9,317 in restitution. On March 6, 2020, Johnson pleaded guilty to embezzlement of union funds.

In Virginia, Alexandria Division, Arthur Penn, former chairman of the Fraternal Order of Police Defense Protective Service Labor Committee (located in Arlington, Va.), was indicted on seven counts of wire fraud for embezzling $384,001 from the union, in violation of 18 U.S.C. 1343.

In Ohio, Douglas B. Dye, former unit chairman of United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) Local 12, was sentenced to one year of probation on each of the two counts in the indictment (probation to run concurrently) and 60 hours of community service. He was also ordered to pay a $2,500 fine and a $125 special assessment. The court acknowledged that Dye previously paid restitution of $8,490. On July 15, 2020, Dye pleaded guilty to one count of embezzlement of labor union assets in the amount of $8,443 and one count of falsification of union records.

In South Carolina, Columbia Division, Brenda Wilson, former President of American Federation of Government Employees (AFGE) Local 3841, was indicted for willfully and knowingly making a false, fictitious, and fraudulent statement in a matter within the jurisdiction of the executive branch of the Government of the United States.

In Maryland, Tyrone Johnson, former President of American Federation of State, County and Municipal Employees (AFSCME) Local 3374, was indicted on one count of theft having a value of at least $100 but less than $1,500 and one count of embezzlement.

In Maryland, Dorothy Jordan, former Secretary-Treasurer of American Federation of State, County and Municipal Employees (AFSCME) Local 3374, was indicted on one count of theft having a value of at least $1,500 but less than $25,000 and one count of embezzlement for embezzling $2,206 from the union.

The “most significant fraud on taxpayer funds in California history” occurred under the watch of Julie Su, a top contender to become Joe Biden’s Labor Secretary.

According to a New York Times report, tens of thousands of inmates — including 133 death row inmates — scammed the state of California out of tens of millions of dollars in unemployment benefits. Su is the secretary of the California Labor and Workforce Development Agency, which oversaw the almost $1 billion in fraudulent payments.

The checks were distributed to some of the worst offenders in the state, including Cary Stayner, Scott Peterson, Isauro Aguirre. Stayner, one of the serial killers who received payments, has been in prison since he murdered several women in Yosemite National Park in 1999. Peterson has been in prison since killing his pregnant wife Laci in 2004. Aguirre was convicted of torturing an 8-year-old to death in 2013.

These were just a few inmates who were dolled taxpayer-funded unemployment checks under Su’s watch. Meanwhile, as many as 1.8 million Californians had their unemployment payments delayed because of the influx of applications during the pandemic. Su took responsibility for the delays in April and vowed to correct the agency’s response, but it’s evident that deep problems — from chronic fraud, to countless Californians missing benefits — still exist. The delays and other major glitches prompted the audit which uncovered the fraudulent payments to California prisoners.

The investigators noted that California lacked the technology to crosscheck unemployment applications with the state’s 58 county jails, state hospitals, and other institutions. The state did, however, have the ability to crosscheck state prisons where fraudulent disbursements were still uncovered. Fraudulent payments were spotted in each and every one of the state’s prisons.

California Gov. Gavin Newsom called the problem staggering. While investigators did shine a light on the fraud, there are no guarantees that Su’s agency will be able to stop it. This track record suggests that more scrutiny is needed before elevating Su to a higher-profile position.

The current administration has been committed to weeding out corruption at the United Auto Workers (UAW). A multi-year investigation found two former union presidents, and numerous other high-ranking officials, guilty of helping embezzle hundreds of thousands of members’ dues dollars. Now, government oversight of the union is on the table — but perhaps not for long.

Joe Biden has made it clear that “unions are going to have increased power” once he’s president, and the UAW is no exception. During his presidential campaign, Joe Biden was sure to make an appearance at the UAW Region 1 headquarters in Michigan — despite the union’s ongoing scandal.

Now, as he prepares to take office in 2021, Biden has met with several political allies in union leadership, including UAW President Rory Gamble. In fact, Biden met with the UAW leadership on the same day that federal prosecutors recommended a jail term of almost three years for a former UAW vice president.

It remains to be seen whether Joe Biden will choose to cut the UAW a break; the current U.S. attorney who has suggested government oversight of the union is a political appointee. But Biden should avoid prioritizing his pals in union leadership over rank and file workers.

After all, union members are still reeling from the crimes committed by their disgraced union leadership. This includes a long-standing scheme to funnel union funds toward luxury expenses, including “private villas, high-end liquor and meal expenses, golfing apparel, golf clubs and green fees.” With that track record, it’s no wonder workers at the Chattanooga Volkswagen plant have twice chosen to reject the UAW. As the investigation continues, more auto workers will likely do the same.

Holding labor unions accountable shouldn’t be a partisan issue. If government oversight is the only way to reverse years of entrenched corruption at the UAW, the next administration should be committed to pursuing it.