Portable Benefits Bill for Gig Economy Workers Introduced

Employment Law

Consistent with one of the recommendations in HR Policy Association's Workplace 2020 report, Sen. Mark Warner (D-VA) has introduced a bill to create a Labor Department grant program for states, local governments, and nonprofits to develop programs that would enable employers and workers to contribute to health insurance, retirement, skills training, and other portable benefits for on-demand workers without the fear that these workers would be classified as employees.  A companion bill (H.R. 2685) has been introduced in the House by Rep. Suzan DelBene (D-WA).  The bills address a major impediment to the creation of protections for "gig" economy workers and other contingent workers: the fear that companies paying into such benefits would thereby take on all the responsibilities and liabilities of an employment relationship.  Thus, the Workplace 2020 report, Making the Workplace Work, recommends:

[T]hose seeking to provide certain benefits to contingent workers in addition to their own employees should be protected through the creation of specific safe harbors such as. . . [a]llowing contributions to government insurance programs, such as unemployment insurance, workers' compensation, and paid family and medical leave insurance.

The Portable Benefits Pilot Program Act (S. 1251) comes amidst calls for Congress to update employment, labor, tax and worker classification laws to address the issue of on-demand, or "gig," workers that are independent contractors.  Meanwhile, several states, including Washington, New York, and New Jersey are considering measures to provide such benefits.  In addition to retirement and health insurance, eligible benefits would include workers' compensation, life or disability insurance, sick leave, and educational benefits.  Sen. Warner who is also co-chair of the Aspen Institute's bipartisan Future of Work Initiative said: "As more and more Americans engage in part-time, contract or other alternative work arrangements, it's increasingly important that we provide them with an ability to access more flexible, portable benefits that they can carry with them to multiple jobs across a day, a year, and even a career.  These incentive grants will accelerate experimentation at the state and local levels to better support a more independent 21st century workforce."  HR Policy CEO Dan Yager applauded the introduction of the measures, noting: “This legislation is an important step towards modernizing federal workplace law. In an economy involving a highly mobile and independent workforce, Congress needs to consider the removal of barriers to companies taking actions that directly benefit those who perform work for them but are not their employees."