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Opposition to Senate Bills 6 and 7: Protecting Independent Contractors and Supporting Business

What It Is:

The Lansing Regional Chamber of Commerce (LRCC) strongly opposes Senate Bills 6 and 7 (2025), which introduce significant limitations on the use of independent contractors across various industries in Michigan. These bills impose strict criteria for classifying workers as independent contractors, replacing Michigan’s well-established “economic-reality test” with a burdensome “ABC test” similar to California’s. Employers would face the challenge of proving that workers meet all three components of the ABC test, leading to unnecessary legal and administrative hurdles.

Additionally, the bills propose steep penalties, including criminal charges for non-compliance, which could jeopardize Michigan’s business climate. The wage transparency provisions would require employers to disclose wage information for similarly situated employees, disregarding critical factors like merit pay, experience, and educational background.

Why It Matters to Our Business Community:

  • Impact on Flexibility: Independent contractors provide flexibility that many businesses and workers value. If passed, these bills could force many workers into permanent employee status, reducing their ability to choose their working conditions and schedules.
  • Increased Burden on Employers: The burden of proof under the new ABC test will create more obstacles for businesses, leading to higher costs and administrative overhead. Many businesses rely on independent contractors to meet fluctuating demands efficiently.
  • Threat to Small Businesses: These bills would disproportionately affect small businesses that rely on contractors to maintain flexibility and minimize overhead costs. The potential criminal penalties could place unnecessary risk on business leaders.
  • Economic Growth and Competitiveness: Michigan has long been known for a balanced approach to labor laws. These bills could undermine Michigan’s reputation as a business-friendly state, ultimately stifling growth and innovation.

The LRCC advocates for policies that support our members and foster a strong, dynamic business environment. We continue to oppose these bills and encourage the legislature to focus on solutions that benefit both workers and employers without stifling entrepreneurship.