“Less Red Tape, More Opportunity: Unleashing American Workers and Job Creators”
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House Education and Workforce Subcommittee on Workforce Protections U.S. House of Representatives
Follow its sittingsIlhan Omar
They have chosen to make labor cheap. This is what their bills will do: make it easier for an employer to treat a worker like an independent contractor instead of a full-time employee, letting employer employers off the hook for wage theft, making overtime cheaper and worth less for workers putting in the time. And they have chosen to make jobs more dangerous. Just last month, Committee Republicans voted to block OSHA from ever issuing any standard protecting workers from extreme heat in one of the hottest summers in our country's history.
Just as troubling is what they have chosen not to do. This committee has held zero hearings on issues that working people in my district and across this country care about most. Not one hearing on raising the minimum wage, not one hearing on addressing the violence in workplace, not one hearing on child labor laws, even as this administration announces a plan to weaken them for 14-year-olds. Mr. Chair, every worker in America deserves to come home safe at the end of the day. That should be one of the most basic obligations we have to our constituents.
Working families are not asking for much, they are asking for a fair shot, an honest wage, and a safe workplace. But this Congress and this administration are failing to meet the moment.
Stripping away labor protections will not unleash anything good. It will just move the cost of doing business onto the bodies and the livelihoods of working-class people who do the real work that power this economy. Working Americans deserve a government that works for them, not for corporate interests. Thank you, and I yield back.
Aaron McKenzie
Pursuant to committee rule 8C, all members who wish to insert written statements into the record may do so by submitting them to the committee clerk electronically in Microsoft Word format by 5:00 p.m. 14 days after this hearing.
And without objection, the hearing record will remain open for 14 days to allow such statements and other extraneous material noted during the hearing to be submitted for the official hearing record. Next we'll go to the introduction of our witnesses. Our first witness is Mr. Casey Mulligan, a senior policy fellow at Americans for Prosperity in Washington, DC. Our second witness is Ms. Elizabeth Milito. She is the executive director of the National Federation of Independent Business Small Business Legal Center in Washington, DC.
Our third witness is Ms. Rebecca Reindel. She is the director of occupational safety and health at the AFL-CIO in Washington, D.C. And our final witness is Mr. Douglas, or Dr. Douglas Holtz-Eakin, president of American Action Forum in also in Washington, D.C. I want to thank all of the witnesses for being here today, and we look forward to each of your testimony. I'll ask that you limit your oral testimony to a three-minute summary of the written testimony that you have provided.
The clock will count down from three minutes as committee members have many questions for you. However, pursuant to committee rule 8D and committee practice, we will not cut off your testimony until you reach the five-minute mark. I would also like to remind the witnesses to be aware of their responsibility to provide accurate information to this subcommittee. And with that, I will recognize our first witness today, Mr. Bannon, you are recognized for your testimony.
Austin Bannon
Chairman McKenzie, Ranking Member Omar, members of the subcommittee, thank you for having me. I'm Austin Bannon, employment policy fellow at Americans for Prosperity. AFP is the premier grassroots organization advancing policy so every American can pursue their version of the American dream. In my space, that means empowering workers with choice and opportunity to succeed in the 21st century. That includes Pennsylvanian Marilyn Kostick, a four-decade independent contractor in the retail cosmetics industry.
When her family relocated for her husband's job, she left her own medical lab job. Self-employment allowed her to earn income while raising three children and taking care of her parents.
American workers like Marilyn should be free to chase opportunity, not forced to seek government permission. The National Labor Relations Act and Fair Labor Standards Act were written approximately 90 years ago, when a third of workers were in manufacturing and many people worked one job for life. Yet in today's economy, manufacturing is under one in 10 jobs, and more than 70 million Americans now earn some or all of their income as independent workers. Since 2025, the Trump administration has committed to regulatory reform, building on the Supreme Court's 2024 Loper Bright decision that ended courts automatically deferring to agency decisions on ambiguous statutes.
Executive Order 14192 and an April 2025 memorandum directed agencies to move quickly against rules resting on thin statutory ground. AFP Foundation's Recasting Regulations tracker counts dozens of DOL actions since Trump took office, many citing Loper Bright by name. For instance, DOL proposed an independent contractor rule focusing on the degree of control a business exercises over work and the worker's own opportunity for profit and loss. This is set to replace a Biden-era 2024 rule forcing businesses to weigh six expanded factors equally.
From working mothers to budding entrepreneurs to people with disabilities, restoring a clear pathway for self-employment instead of treating it like a problem is exactly what workers want. A Biden-era Bureau of Labor Statistics survey found that less than one in ten independent contractors would prefer a traditional job. DOL has also proposed a new joint employer rule to protect millions of franchises and small businesses serving as vendors and contractors. Unlike Biden-era efforts, the rule requires direct control, not just theoretical control, before businesses are forced to share liability. As DOL continues regulatory reforms, Congress can help make pathways of opportunity more permanent as well.
Leaders can enact HR 1319, the Modern Worker Empowerment Act, and HR 1320, the Modern Worker Security Act.
These would enshrine DOL's pro-worker classification tests and a benefits safe harbor into law, allowing self-employed workers to acquire more affordable benefits. Eleven states have recently enacted bipartisan voluntary portable benefits laws, so the time is right to remove federal barriers. HR 4366, the Save Local Business Act, introduced by Representative Comer, would enact a sound joint employer standard across agencies, ending regulatory efforts to crush small businesses with ambiguous standards.
H.R. 2870, the Working Families Flexibility Act, introduced by Representative Miller, would let private sector workers choose paid time off or extra pay when working overtime, just as federal employees already enjoy. Lastly, the Employee Rights Act, H.R. 4154, offers a comprehensive agenda of pro-worker reforms on entrepreneurship, self-employment, and workers' democratic rights within their unions. To close, I'll simply reiterate: American workers should be free to chase opportunity, not forced to seek government permission. Thank you, and I look forward to your questions.
Thank you, and I'll now recognize Ms. Melito for your testimony.
Elizabeth Milito
Chairman McKenzie, Ranking Member Omar, and members of the subcommittee, thank you for the opportunity to testify today. I'm honored to be here on behalf of NFIB's members, the small business owners who are the backbone of communities across America.
They create jobs, support local economies, and provide opportunities for millions of workers. Since 1995, small businesses have generated more than 20 million new jobs, accounting for over 60% of new job creation in the United States. Behind those numbers are hardworking entrepreneurs who take extraordinary risks and make countless sacrifices to keep their businesses open. Most small business owners wear many hats: they are the CEO, HR manager, compliance officer, accountant, and sometimes even the person who sweeps up the floor at the end of the day in the business. They are passionate about serving their customers, supporting their employees, and strengthening their communities.
Because they operate with limited time and resources, public policy matters greatly to them.
Clear, predictable, and practical regulations can help businesses grow and succeed. Conversely, overly complex or costly requirements can create challenges that are particularly difficult for small employers to absorb. Over the past two decades, federal regulations have added significant compliance obligations and paperwork requirements for businesses of all sizes. While many regulations are well-intentioned, small businesses often lack the legal departments, compliance teams, and administrative resources that larger companies have to navigate new requirements.
As a result, regulatory burdens frequently fall hardest on small employers. Every hour spent understanding a new requirement, completing paperwork, filling out a form, or training employees is time that the business owner cannot devote to serving customers, training employees, expanding operations, or creating new jobs. For small business owners, the tradeoffs are a real concern. The good news is that policymakers from both parties have long recognized the importance of considering the unique challenges small businesses face.
We appreciate the efforts of Congress, the administration, and this committee that they have sought out input from job creators to ensure that regulations are workable for small business. In recent months, there have been encouraging steps toward greater clarity and certainty in several areas of labor and employment law, and NFIB appreciates the efforts to simplify complex compliance requirements and enhance uniformity across different standards. But one area where small business owners remain deeply concerned is OSHA's proposed heat standard. Small employers take employee safety seriously and recognize the importance of protecting workers from heat-related hazards. In fact, small businesses in all industries have adopted workplace practices tailored to their specific needs.
However, NFIB members are very concerned about the federal heat standard, and I've printed out a copy here, all 375 pages of the proposal there. These concerns are reflected in the more than 10,000 small business owners who have signed NFIB's petition urging policymakers to reject the establishment of a federal heat standard. Small business owners are grateful for the attention this committee and policymakers on both sides of the aisle have given to the challenges of America's job creators.
When regulations are practical, flexible, and clear, small business owners can focus their energy where it belongs: serving customers, creating jobs, investing in their employees, and strengthening their communities. NFIB looks forward to working with Congress, the administration, and with this committee to identify ways to reduce unnecessary burdens, improve regulatory certainty, and ensure that America's workers are safe and that America's small businesses can thrive. Thank you.
Rebecca Reindel
Chairman McKenzie, Ranking Member Omar, and members of the subcommittee, I appreciate the opportunity to testify on behalf of the AFL-CIO today. We are a federation of 65 national labor unions, and I'll be testifying about protecting worker health and safety through regulation.
As we approach Labor Day, I want to be clear about what we are actually talking about when we hear terms about regulations and red tape. This is about setting minimum requirements for businesses to follow in their efforts to be pillars of the community, to be responsible to those they employ, to their consumers, their environment, and to society. We are talking about workers being able to go home safely to their families at the end of the day with fair pay and dignity. The reality is that businesses of all sizes can be dangerous workplaces, including construction sites, restaurants, retail establishments, farms, mines, hospitals, manufacturing shops.
Carrie's daughter Brooke, a college student, died working part-time at a restaurant, crushed by equipment that didn't have safety mechanisms on it. Tammy's husband Kevin, 58 years old, was engulfed by grain in a silo on a farm. The site lacked proper safety procedures and safety and rescue equipment. Travis, 26-year-old engineer, died in a manhole helping to rescue a coworker who had lost consciousness from dangerous gases. They had safety equipment on site and monitoring equipment gathering dust in storage, and they were not trained on any of it.
These and the 380 people who lose their lives each day in the US because of work are tragic and are preventable.
In addition to education and support, regulations and enforcement are there to ensure that workers do come home safe. For employers, regulations level the playing field, provide a roadmap, and force technology spurring innovation and making the market competitive. Decades of regulation reviews have demonstrated this. When we hear about the sheer number of regulations or the total billions of dollars that they cost in industry, those figures, while they sound impressive, are skewed because as the economy grows, regulations naturally cover more businesses. These figures also do not reflect the cost of complying with regulations, which actually decrease over time, and that regulations have different shapes and sizes.
And they say nothing about the impact on family members for a lifetime.
So, this is a smokescreen. The deregulatory label is not really about putting less onerous requirements on businesses, it's about letting businesses pass more costs onto people's health and their wallets. Two-thirds of the 60 deregulatory actions issued by the Department of Labor in 2025 alone directly impact government rules that keep workers alive. So not only have these been dangerous exercises, but they're giving employers more discretion to make decisions about safety equipment that they have no expertise to make and will ultimately put their businesses at risk.
While we hear about burdens and red tape on employers, real protections are being pulled right out from under hardworking Americans. Some of the examples out of OSHA last year would allow employers to stop updates to ladder safety, to eliminate medical exams for workers required to wear respirators, to send workers into mines without MSHA approving their safety plans, and eliminate OSHA coverage for those in so-called inherently risky occupations or working with obvious hazards.
Others would allow employers to increase line speeds in food processing plants, increase radiation exposures to workers and the public, stop chemical facilities from planning for emergencies like explosions. These have been a waste of taxpayers' money and government resources, and they've ignored the very standards they are weakening are cited each year by these agencies because employers aren't following them or maintaining a safe workplace. Without rules, companies shift hidden costs of injuries, illnesses, pollution, and taxes onto the public instead of paying for them directly. Without rules, consumers will put less trust in their food, their banks, their environment, and their workplaces. American opportunity rests in the ability to go to work to feed your family and return home at the end of that shift unharmed.
It rests in the ability to have strong laws that push good employers to do the right thing and hold bad actors accountable.
It's a false choice that businesses need to take risks with people's health and safety in order to succeed economically. When we talk in theory or giant numbers, we lose sight of all of the reasons that those regulations are so necessary. Without them, it becomes a race to the bottom. Thank you for inviting me to testify today and I'll be glad to answer any questions.
Douglas Holtz-Eakin
I thank you, Chairman McKenzie, Ranking Member Omar, and members of the subcommittee. It's a privilege to be here today. Workers benefit from a vibrant labor market.
They benefit from a business environment that encourages rapid growth in productivity, leads to rising real wages, and thus increases the standard of living. Among the key policies that contribute to that are tax and regulatory policies, and I want to talk about some recent developments in each.
The 2025 reconciliation bill has been noted frequently for its business tax provisions, making permanent the expensing of equipment investment, R&D investment, the small business Section 179 provision, keeping the corporate rate at a low, internationally competitive level. But I think less well recognized is the fact that more than one-half of all business income is taxed on individual income tax returns through so-called pass-through entities: sole proprietorships, partnerships, limited liability corporations, and the like. So that all of the individual tax provisions are actually business tax reforms. Keeping those tax rates low is very important to the small business community. The pass-through taxation deduction was a central part of the tax bill, and the AMT relief is a disguised small business tax cut.
And so I think it can't be overstated just how important doing something was.
Letting it sunset would have been a disaster, led to a recession, and the reforms that are in there are not just for large corporations, they're for corporations and businesses of all size. The second thing I'd just note for at the outset is the regulatory environment. At the American Action Forum, we track the burden cost, the cost imposed by a regulation on the private sector of every regulation proposed and finalized by the federal government. And the the recent track record of that tabulation is quite informative. Over the eight years of the Obama administration, it averaged about $100 billion a year in new burden costs imposed on the private sector.
Turn to the first Trump administration, it averaged $16 billion a year in new regulations, most of that occurring during the pandemic. It was like night and day and showed up in all of the small business optimism indexes that are available, including the NFIB. The Biden administration averaged $470 billion a year in new burden costs imposed on the private sector. And thus far in the Trump administration, they have cut roughly $590 billion per year in burden costs. That has to have a dramatic impact on the climate for especially small businesses.
Those regulatory costs don't come out of thin air.
They come out of wage increases that would otherwise happen, investments that would otherwise be plowed into those businesses, and increases in their productivity and ability to deliver a standard of living to their workers. So I appreciate the chance to be here today, and I look forward to answering your questions.
Aaron McKenzie
Thank you. Under committee rule nine, we will now ask questions of the witnesses under the five-minute rule, and I will recognize myself first. Ms. Melito, your testimony makes an important connection between regulatory compliance costs and employees.
Money and time devoted to compliance are resources that cannot instead go towards raises, bonuses, hiring, or business expansion. When policymakers talk about the cost of regulation, why should we think about that not simply as a cost for the business owner, but also a potential cost for the workers employed by that business and workers who are seeking jobs?
Elizabeth Milito
Thank you, Representative McKenzie, for that question. I think it's important to recognize that small business owners and employees are on the same team. They want the same thing. We want a safe workplace. We want employees to go home, as Ms. Rundell said in her testimony, safe at the end of their shift.
And both want the business to succeed and grow and create opportunities. But when small businesses face new compliance costs, those costs don't just affect the owner, as you said. They impact the resources available for employee raises, for employee benefits, for employee training, and for hiring new employees and other investments that the business makes in the business, buying new equipment, that sort of thing. So again, I just want to wrap it up by saying that regulations serve important goals, but as you said in your opening statement, we need the appropriate regulatory balance there to do so. Thank you.
Aaron McKenzie
Thank you. Mr. Bannon, your written testimony describes significant changes that are underway at the Department of Labor. But you also urge Congress to codify several of these policies, including independent contractor and joint employer standards.
Your testimony also suggests that businesses have spent years adjusting to rules that change whenever presidential administrations change. Why is congressional action important even when an administration is already pursuing regulatory reforms, and what do you see as the long-term certainty that is necessary for employers when they're deciding to invest, expand, or hire?
Austin Bannon
At best, businesses and workers have to deal with the costs and the time of compliance, which slows down their ability to expand and to build on a mutually beneficial relationship, only to find out then when an administration changes, all the work they've put into understanding that regulation goes out the door and they have to plan for something else. But the worst part is it has a chilling effect where businesses may not make a decision at all to work with somebody, or somebody who wants to be self-employed, let's say a working mother who can't go back to a full-time job, no longer has this option to pursue self-employment, worried that there'd be some sort of regulatory barrier to that and not finding somebody that they can work through. So that's something that happens within independent contracting, and the same thing goes with joint employer standards. Individuals cannot be self-employed and then become small business entrepreneurs if they don't believe that they can work independently.
Yeah, thank you for that question.
Instead, they're worried that their business could be swallowed up by a larger one, and larger businesses can't engage in mutually beneficial relationships with small businesses that may be vendors or contractors for them and provide special functions that their business doesn't normally have. And without the work of Congress to sort of make this a permanent approach, then this is what happens again and again through different administrations. If we can create a pro-worker, pro-economic growth standard, it stops the inertia of these businesses that can't act. And Congress, you know, has very similar policies that have been introduced that would help make permanent some of the actions even that the Trump administration has undergone with regulatory policy right now.
Aaron McKenzie
Well, thank you. I appreciate both of the witnesses that I asked questions to, your answers, because what I see in here when I'm out in our local community is everybody does want the safe working conditions, environmental standards met.
They also want bad actors to be held accountable. But at the same time, it is the cumulative piling up of all of these regulations that holds back their businesses in terms of increasing wages, expanding job opportunities, and hiring new people. And then, like we're talking about here with Mr. Bannon, when there is that uncertainty, that slows them down because they say, "Well, we might wait, we might get a different decision if some period of time lapses, so we're going to hold up our investment or our decision-making process," which just slows down not only their company but the overall economy.
So I think it's critically important that we get this balance right and also bring certainty to those employers. I would also ask, I have a brief amount of time left here, Ms. Reindel, you were very critical of the idea of streamlining or reducing unnecessary regulatory burdens. So out of all of the thousands of regulations that our federal government has, there is not a single one that you can come up with that you say this could be reduced, this could be cut, it could be streamlined, which would help small businesses because of a lower regulatory burden and a lower cost? There's nothing you can come up with?
Rebecca Reindel
I'm going to speak to the lane that I sit in, which is focusing on worker safety and health. We actually just finished two weeks of OSHA hearings that went through this in lengthy, lengthy detail, which was also by the government's time to look. In my purview...
Aaron McKenzie
So the answer is no. You have... That's okay. If you have no answer, that's fine. But so you're saying that there is nothing that you would cut or reduce to help small businesses?
Rebecca Reindel
In my purview, there's nothing that OSHA has not already considered in history that would make any difference without removing protections.
Aaron McKenzie
The answer's no from your point that every regulation is necessary and right-sized for the business and the economy. That's okay. Thank you.
Ilhan Omar
To save lives, yes. Thank you. Thank you. Next, we will go to Representative Casar. Nurses, emergency room staff, social workers, healthcare aides, people who go to work every single day to help others are at constant risk of being hurt.
Mr. Randell, what are you hearing from members in the healthcare and social services and what are they facing right now in the job? Sure. So healthcare workers are increasingly assaulted on the job, as social workers are. This is quite frequent.
Rebecca Reindel
The rates for serious injuries from workplace violence, from assaults on the job for healthcare workers are five times what they are for other workers across the country.
Rebecca Reindel
There's no OSHA standard. OSHA's had guidelines for 30 years, but employers still haven't acted in putting in safe protections that would prevent these assaults. So there's no OSHA standard currently.
Ilhan Omar
Yeah, and when there isn't a safety standard in place, OSHA could still address this issue further under the general duty clause. Can you explain what this legal term is?
Rebecca Reindel
Yes, the general duty clause under OSHA allows or requires employers to maintain a safe workplace, but it doesn't specify for specific hazards. It has to meet a broader, higher burden of proof instead of actually helping employers understand what they should do to address something like workplace violence, also for heat and for other standards as well.
Ilhan Omar
Yeah, so we've heard a lot about the heat safety standard. It's something that I've worked on even before coming here, and I know some of my colleagues on this subcommittee on our side of the aisle have worked on and cared about. Ms. Melito testified that the proposed rule would require a small business to, quote, hire at least one full-time employee for compliance purposes. Does that sound accurate to you?
That's inaccurate.
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