AEO CEO Natalie Cofield Provides Congressional Testimony on Benefit Access for Independent Contractors

Testimony of the Association for Enterprise Opportunity

U.S. House of Representatives

Subcommittee on Workforce Protections

April 25, 2024

Unlock Opportunity: Allowing Independent Contractors to Access Benefits

The Association for Enterprise Opportunity (AEO) is a national association and network that takes an entrepreneurial approach to solving systemic market issues to support the development of a robust and inclusive marketplace for underserved small businesses. AEO’s mission is to create economic opportunity for these underserved entrepreneurs and small businesses by fostering the advancement of rigorously examined and impactful initiatives that encourage them in starting, stabilizing, and expanding businesses. AEO’s own research, as well as the research of many organizations, surmise that initiatives to bolster innovative and flexible approaches to employment that benefit both the worker and business, as examined throughout this hearing, are worthwhile to explore.

Further our recent research report, Self-Employment: How Independent Contractors Fuel the Growth of New and Existing Microbusinesses, validates the significance of self- employment as critical driver for microbusinesses, serving as a linchpin for the 96% of U.S. businesses with fewer than ten employees.

AEO agrees with the sentiments expressed throughout the hearing by Dr. Liya Palagashvili, Ms. Gabriella Hoffman, and Ms. Kristin Sharp, that independent contractors stand as a significant economic boon, desire the inherent work flexibilities, encourage entrepreneurship, and act as a pipeline to developing the small businesses that employ over 60 million Americans. As shown through the societal impacts of the COVID-19 Pandemic, how people work, when people work, where people work, and why people work continues to evolve.

More specifically, our research finds that:

90% of our survey respondents preferred self-employment over traditional employment
The self-employed sector fosters inclusive economic opportunities and facilitates economic participation for underserved communities
Independent contracting, a form of self-employment allows micro-businesses to tap into specialized talent as needed. It also gives entrepreneurs a business model to get started as microbusiness owners.

As such we believe that removing the autonomy of millions of Americans to choose the flexibility enjoyed by independent contracting eliminates economic mobility opportunities and automatically constructs a significant barrier to employment as pathways to work are narrowed, presenting potential downstream impacts on both the creation of small businesses and local economic sustainability. Innovations, like portable benefits, that address legitimate concerns regarding the benefits gap independent contractors face, should be further explored so all American workers can access benefits without sacrificing their autonomy.

Regards,