American labor organizations are experiencing a period of activity rarely seen in decades. Marty Walsh, who took office as Secretary of Labor in March, is the first secretary to have been a union official since the Ford administration. President Joe Biden established a special task force in April dedicated to enhancing workers' ability to organize.

Now, a bill is pending before the Senate — if passed, it could either give workers a greater voice or be seen as the end of small businesses, depending on one's perspective. At a July 22 Senate hearing on the Protecting the Right to Organize Act (PRO Act), Gracie Heldman, a worker at an industrial bakery in McComb, Ohio, testified that her employer harassed and intimidated organizers; Jyoti Sarolia, a California hotel business owner, stated that the bill's independent contractor and joint employer provisions would harm franchisees.

The bill, which passed the House in March, seeks to amend the National Labor Relations Act (NLRA) and parts of the 1947 Labor Management Relations Act and the Labor-Management Reporting and Disclosure Act, restrict certain employer practices, and give union organizers greater power in the workplace.

Here are ten key changes the bill could bring about.

1. More workers would be classified as employees rather than independent contractors

The independent contractor provision is arguably the "most controversial" part of the bill, Patricia Campos-Medina, executive director of Cornell University's Worker Institute, told HR Dive. The provision would expand the definition of "employee" to cover many workers currently classified as independent contractors by their employers.

The bill adopts the "ABC" test, which would classify a worker as an independent contractor only if all of the following conditions are met: (a) the worker is free from the employer's control and direction; (b) the service performed is outside the usual course of the employer's business; and (c) the worker is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as the service performed.

States like California already use the ABC test in areas such as wage and hour and unemployment. California and a few other states have also passed laws excluding app-based drivers from independent contractor classification.

Mark Pearce, former chairman of the National Labor Relations Board and a witness at the July 22 hearing, said the PRO Act would "codify" the ABC test, "making it applicable to determining who is entitled to the protections of the National Labor Relations Act." In other words, workers would be classified as employees precisely to more fully enjoy the organizing and collective bargaining rights expanded under the NLRA and the proposed law.

Campos-Medina noted that many app-based gig workers are misclassified as independent contractors, especially in warehousing, administrative, and healthcare fields. "We call it the 'permanent independent workforce,'" she said, "because they've been doing the same job for the same employer for years, yet they're still considered independent contractors." A October 2020 report by the progressive organization National Employment Law Project estimated that the worker misclassification rate in the U.S. ranges from 10% to 30%.

The business community has expressed concerns about expanding the definition of "employee." Sarolia, representing the International Franchise Association, testified at the hearing that the ABC test "could define franchisees as employees of the brand, rather than the independent small business owners they actually are."

2. State "right-to-work" laws would be overturned

According to the National Conference of State Legislatures, 27 states have "right-to-work" laws, which prohibit employers and unions from reaching "fair share" agreements, where employees must pay a "fair share fee" to the union that represents them. In other words, workers in right-to-work states cannot be forced to pay union dues (sometimes people mistakenly think right-to-work laws give workers the right to refuse to join a union, but that right is already guaranteed at the federal level by the NLRA).

The PRO Act would require states to allow private employers and unions to reach fair share agreements, so unionized workplaces could charge all workers fees, even if they are not union members.

Supporters of repealing right-to-work laws argue they weaken organizing power. Heidi Shierholz, senior economist and policy director at the Economic Policy Institute and a witness at the hearing, told HR Dive that right-to-work laws "starve unions," "They (unions) are legally required to represent everyone in the bargaining unit, but they can't charge any fees for it."

Opponents argue these laws are about worker freedom and necessary for economic growth. Alabama Republican Senator Tommy Tuberville said at the hearing: "Alabama's right-to-work law is extremely beneficial to our state because we're in the automotive industry. Without these laws, many industries would stagnate, especially in Alabama. Employer costs would skyrocket, potentially leading to job losses. Not to mention, states like Alabama would lose their ability to recruit businesses."

3. Employers would face significant fines for firing workers who organize unions

One of the most critical provisions of the PRO Act is that employers who fire workers attempting to organize their workplace would face fines ranging from $50,000 to $100,000.

Shierholz told HR Dive that currently "there are no civil penalties for violating the NLRA; ... if a worker is illegally fired for organizing activity (which happens often), even if the employer is found guilty (by the National Labor Relations Board), there are no penalties. They just have to pay the fired worker back pay, minus what the worker earned in the meantime." She said the current penalties are too light, often giving employers an incentive to break the law to prevent unionization risks.

Campos-Medina said: "The biggest obstacle to organizing workplaces right now is the employer's ability to fire workers and retaliate for union activity. If we can eliminate retaliation... I think there would be more unions."

4. Employers could no longer hold mandatory "captive audience" meetings

Another way some managers influence union campaigns is through so-called "captive audience" meetings, which employees may be required to attend. Campos-Medina called these events "fear meetings," "They tell employees: 'If you join the union, you'll lose your job.'"

In her testimony, Heldman described such meetings that workers faced after filing a representation petition with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union: "They told us the plant could close, we would lose wages and benefits, and we would be forced to strike. If we didn't go to these meetings, we would be fired."

The PRO Act would prohibit employers from forcing or coercing employees to attend captive audience meetings and other employer "campaign activities" unrelated to their job duties.

5. Union-employer contracts would be reached more quickly

Shierholz told HR Dive that after employees vote to form a union, employers sometimes delay reaching a collective bargaining agreement through "delay tactics," a strategy that can leave workers who voted for a union in limbo for years. According to an analysis of NLRB data, hundreds of newly formed unions fight for contracts, and only 48% reach one within the first year; a quarter of unions still haven't reached an agreement within three years of formation.

Campos-Medina said: "Even if a union wins an election and is certified as the workers' representative, the company can refuse to bargain with the union indefinitely. Negotiations get tied up in court proceedings, and a contract is never reached."

Pearce, now executive director of the Workplace Rights Institute at Georgetown University Law Center and a visiting professor, testified that a rehabilitation nursing center delayed a collective bargaining agreement for seven years and was eventually ordered by a court to bargain.

The PRO Act sets a timeline for collective bargaining, and if an agreement is not reached, it requires timely mediation and the introduction of a tripartite arbitration panel — consisting of one member chosen by the union, one by the employer, and a neutral third party.

The bill also prohibits delaying elections by setting union election procedures through workers and the NLRB.

6. Union organizers could access employee contact information

A particular concern for some opponents is that the bill would require employers to provide voter lists to labor organizations seeking to represent employees. The lists would include employees' home addresses, work locations, shifts, job classifications, and, if the employer has them, landline and mobile phone numbers and personal email addresses.

Supporters of labor organizations argue that providing such information is necessary for union representatives to communicate with employees, but opponents worry about potential coercion and harassment. The conservative think tank Competitive Enterprise Institute wrote: "Providing (employee) contact information would only ensure that workers who wish to be left alone cannot be left alone."

7. Employees would have the right to use work equipment for organizing activities

The PRO Act would require employers to allow employees to use work communication devices and systems for organizing activities, "unless there is a compelling business reason to deny or limit such use."

David Pryzbylski, a labor and employment attorney at Barnes & Thornburg in Indianapolis, told the Society for Human Resource Management: "This means managers could see more distractions in the workplace due to increased organizing conversations."

8. Employers could not require employees to waive collective or class action rights

In documents employees sign upon hiring, employers sometimes include arbitration agreements in which employees waive their right to participate in collective or class action lawsuits. Although the NLRB has challenged such agreements, in 2018 the Supreme Court in Epic Systems Corporation v. Lewis upheld employers' right to use collective arbitration agreements under the Federal Arbitration Act.

The PRO Act would not allow employers to enter into such agreements with employees.

9. Joint employer provisions could affect franchisees and staffing agencies

Sarolia testified at the hearing that the provision of concern to the International Franchise Association is the joint employer provision, which would amend the NLRA to define a joint employer as a party that "codetermines or shares control over employees' essential terms and conditions of employment." This standard would make "franchise brands responsible for the actions of unit-level small businesses," Sarolia said, "This exposes franchisees to liability for things they never did and have no power to prevent."

Under the joint employer provision, staffing agencies could also be interpreted as joint employers, and therefore liable for some of the conditions experienced by employees in their temporary workforce.

Sarolia testified: "These changes mean that at the franchisee level, you'd need to hire a lot of lawyers to oversee employment issues and claims you can't control. Ultimately, the additional costs for franchisees would be passed on to independent owners like me, making the franchise business model unsustainable."

Shierholz disagreed that the joint employer provision would harm the franchise model. "The joint employer standard actually protects franchisees," she told HR Dive. "In the current situation, franchisees... already bear all the responsibilities of an employer. They're already responsible for sitting at the bargaining table. The joint employer standard just says: 'The parent company that actually controls how you operate — they also have to sit at the bargaining table.'"

10. Wage gaps for workers of color, especially Black employees, could narrow

Finally — and of particular concern to Shierholz — the PRO Act, by strengthening unions, could create a more level playing field for workers of color, especially Black workers.

Shierholz said: "It's worth emphasizing the importance of unionization for racial economic justice. People of color are unionized at higher rates than white people. There are more white people in unions because there are more white people overall. Black workers are unionized at higher rates than white workers, and Black people gain more from unions than white people. Everyone benefits from unions, but people of color benefit more."

A 2016 report by the Center for Economic and Policy Research found that Black union workers earn on average 16.4% more than non-union Black workers, "even after controlling for systematic differences between union and non-union workforces."

Shierholz said that over the past 40 years, the Black-white wage gap has widened, and unions could be one corrective factor. "A key factor in (the widening gap) is the decline of unions over the same period."