New Bill Would Incentivize Portable Benefits Programs for the Gig Economy

May 30, 2017

Freelancers made up 35 percent of the workforce in 2016, according to a report from Upwork and Freelancers Union. Sixty-three percent said that they opted to freelance by choice, saying that “having a diversified portfolio of clients is more secure than having one employer.” But while working for themselves may feel safer for some workers than working for an employer, there’s one area in which employees often have the advantage: benefits.

Freelancers, contractors, and other gig economy workers don’t have access to the same health insurance, paid time off, and retirement benefits as full-time workers.

Freelancers make up 35% of the workforce, but many lack benefits available to traditional workers.

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But that might be about to change. Legislation recently introduced by U.S. Sen. Mark R. Warner (D-VA) and U.S. Rep. Suzan DelBene (D-WA) would create a $20 million fund under the Department of Labor. The fund would incentivize states and nonprofits such as unions to develop portable benefits programs covering sick leave, health insurance, retirement benefits, and education and training, among other benefits.

“The nature of work is changing rapidly, but our policies largely remain tied to a 20th century model of traditional full-time employment,” Sen. Warner said in a statement. “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.”

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“Should the bill pass, the government will need to decide if they want to use a conglomerate of different state models or a one-size-fits-all model to create a federal standard,” writes Amanda Eisenberg at Employee Benefit News. “The latter would make it easier for workers who frequently cross state lines, such as ride-sharing drivers and freelancers living outside the state they predominantly work in.”

Sen. Warner says he hopes the bill will result in multiple models of portable benefits programs that legislators can evaluate before rolling out a federal law.

“I think if we try to legislate top-down now, we’d probably get it wrong,” Warner told Quartz.