Some years have been harder than others in terms of labor policies that enhance and further worker freedoms and independence for women. Thankfully, 2025 has seen remarkable improvement in the greater recognition of the role of independent professionals, contractors, and gig workers in our economy, along with greater freedom, greater flexibility, and policies that encourage thriving. Since the inauguration of President Donald Trump and his innovative shakeup of the American economy, key industries, and especially small businesses and the American worker, the end of 2025 is turning out to be a banner year for anyone who prizes worker freedoms.
As we round out 2025, here are three of Santa’s gifts to those who work independently or own a small business:
1. Modern Worker Empowerment Act
After decades of independent professionals and small business owners advocating for Congress to listen to them before crafting policies that targeted their livelihoods, the work done in 2025 through the House Education and the Workforce committee and the Senate Health, Education, Labor and Pensions committee has been a tremendous gift to independent contractors and small businesses. The committees’ first significant signal that changes were afoot: their recognition that the Fair Labor and Standards Act of 1938 must be updated to conform to a modern workforce, not work against it. As I reported,
This spotlight on independent contracting, with testimony from actual independent contractors, was illuminating and informative. With the Trump administration’s commitment to support the American worker in all its forms, hopefully, this hearing will make a positive difference to the policies and legislation that Congress crafts and votes on, which impact this sector of the American workforce.
The second is the introduction by Sen. Tim Scott (R-SC) and Rep. Kevin Kiley (R-CA) of the Modern Worker Empowerment Act in their respective houses. The Modern Worker Empowerment Act seeks to codify the contribution of the independent worker to our economy and their need to be recognized and their choice to work as such be protected. It has been a gift not only to see Congress put actual policy to their words, but that concerted effort is being made to change the viewpoint of what worker freedom truly looks like.
2. The Biden Administration Independent Contractor Rule Is DOA, Restoring the First Trump Administration IC Rule
After lawsuits and lobbying against the implementation of the Department of Labor’s Biden administration independent contractor rule, the Trump administration’s DOL was directed to pull back on the Biden rule’s enforcement, a huge gift that removed the stranglehold from independent professionals and right-to-work states.
Last week, the U.S. Department of Labor (DOL) released its regulatory agenda. Much to the delight of independent professionals, contractors, and small businesses everywhere, the 2024 Biden Independent Contractor rule was on the list for rescission and removal.
We expect the new proposed Trump rule, rescinding the Biden rule, to be released any day now.
The overall push by the Trump administration to reduce regulatory burdens on independent professionals and small businesses, starting with this onerous labor rule, has made for the prospect of not just a merrier Christmas, but a more prosperous 2026 for small businesses and entrepreneurs.
3. Portable Benefits Modernize Labor Policy for Freelancers
Independent professionals and small businesses will receive another huge win when portable benefits become widely accessible across the 50 states. Portable benefits allow freelancers who value flexibility and independence to continue their work and still receive necessary benefits such as health care and paid leave. These benefits are not contingent on being tied to one job but can be carried across a contractor’s career and work life.
In 2025, Independent Women unveiled its Voluntary Portable Benefits Act in order to protect worker freedom in states while expanding access to financial and healthcare benefits. This leads the way in motivating many states to empower their independent contractors without forcing them into traditional 9-5 employment. With California’s Assembly Bill 5 and the PRO Act aiming to force workers into traditional employment to secure benefits, this portable benefit legislation is a significant step states can take to ensure a growing class of workers is protected.
At the federal level, the Unlocking Benefits for Independent Workers Act in the Senate and the Modern Worker Security Act would both clear the way for portable benefits at the federal level as a complement to state efforts. We’re excited to see how portable benefits continue to pick up speed in 2026.
While small businesses benefited from good labor policy, Americans still received some coal in their stockings due to bad labor policies. These are the worst labor policies of 2025:
1. The PRO Act Still Looms Like a Bad Storm
The Protecting the Right to Organize (PRO) Act, a bill that restricts independent contracting and dismantles right-to-work laws, continues to hang around Congress, despite lying dormant on the House and Senate floors over several sessions of Congress. In 2025, Democratic House members and one Republican House member decided to revive it, introducing it into legislation. As Independent Women’s Gabriella Hoffman explained about a previous iteration of the bill:
The reintroduced PRO Act bill (S. 567), named in honor of the late AFL-CIO President Richard Trumka, contains provisions to abolish right-to-work laws, make union membership conditional for employment, and mandate workers submit to an ABC test that assumes they’re employees and not independent contractors.
IWF has raised alarm about the devastating impacts of the PRO Act on flexibility and the independent workforce in America.
There is a reason the PRO Act never moves past committee orders before coming to the legislative floor for a vote. It’s a bad policy that would destroy independent professionals and small businesses’ freedom of choice and economic advancement. However, should the midterms bode ill for Republican majority control, expect this latest push to return to the top of a Democrat legislative agenda.
2. New Jersey Proposed Rule Copycats California
In an effort to crack down on freelancers, the New Jersey Department of Labor and Workforce proposed altering the ABC test for independent contractors in a way that would trigger a mass reclassification of freelancers. A similar rule (AB5) was put in place in California in 2019 and quickly devastated the livelihoods of freelancers in over 600 occupations.
New Jersey already had an ABC test that defined independent contractors, but the proposed rule would make it more challenging to meet standards and ultimately introduce vague categories and factors. This is possible because the New Jersey Legislature did not codify the ABC test. In fact, the legislature sought to change protections for independent contractors but failed to pass legislation due to public outcry. The state legislature should be the entity responsible for making changes to employment policy, not an unaccountable state agency.
Independent Women stood against the Department’s proposed rule in a public comment, and legislation has been brought to counter the rule.
3. ACA Enhanced Tax Credit Extension
After a 43-day government shutdown that hinged on extending government healthcare subsidies, Congress is still debating whether or not to extend the Enhanced Premium Tax Credits. The tax credits extended by the American Rescue Plan Act in 2021 are set to expire at the end of 2025, but a retroactive extension is possible.
Costing $40 billion annually, the enhanced premium tax credit arm of the Affordable Care Act has helped subsidize 93% of enrollees in HealthCare.gov plans. They have also incurred a net revenue loss of $129 billion in fiscal year 2025.
Although these credits cost the government billions of dollars, the people who would see the largest absolute price increase are only a small group of people with higher incomes who did not previously qualify for ACA subsidies. The average American family will either continue paying market rates or continue being subsidized. Families in the middle, high-income earners who only qualify under the extension, will see the largest increase, as they will go from being subsidized to paying market rates once again. Lower-income families may also see price increases, but to a smaller extent.
U.S. healthcare costs should not seek to make expensive health care affordable for the few, but it should seek to incentivize healthcare providers to compete and provide quality, affordable care for all Americans without subsidies.
Bottom Line
2025 has been a fight toward empowering workers. We look forward to more sound legislation in the new year, with unwinding harmful policies and instituting pro-free enterprise policies that make work more enjoyable and productive for Americans.