Portable Benefits System Would Allow More Workers to Secure Insurance, Save for Retirement
Legislation Assemblyman Troy Singleton sponsored to allow independent workers in temporary, contract and on-demand jobs to access health insurance, retirement savings and other essential benefits was advanced Monday by an Assembly committee.
“New technology has yielded a modern economy that allows greater flexibility for independent contractors, but because many of their jobs do not come with health insurance, retirement plans or paid leave, these workers are more vulnerable than many of their counterparts in the traditional workforce,” said Singleton (D-Burlington). “The way that people work may be transforming, but the notion that all workers deserve to be treated with respect and should have access to benefits that will foster their long-term well-being has not changed.”
The bill (A-4705) would establish a system of portable benefits that would allow men and women in the independent workforce, such as freelance writers and Uber and Lyft drivers, to access basic benefits available to workers in the traditional workforce. The system would tie benefits to the worker, as opposed to the traditional model of tying them to the employer, so that workers would not lose access to benefits upon moving on to a new job.
Under the legislation, contracting agents – or companies like Uber, Postmates and TaskRabbit that facilitate the provision of a service – that have facilitated the provision of services by at least 50 workers for at least one year would be required to contribute funds to qualified benefit providers to provide benefits for their workers. The required contribution would be the lesser of 25 percent of the total fee collected from the consumer for each transaction of services provided or six dollars for every hour that the worker provided services to the consumer.
“We are at a developing crossroads in our country as the modern workplace is rapidly evolving, whether we acknowledge it or not,” said Singleton. “The question we must ask ourselves is whether we intend to go back to the employment and social contracts of the last century, or are we going to reinvent them for a new period of American economic evolution with a creative solution to protect workers and employers?”
The measure would require qualified benefit providers to provide workers’ compensation to entitled workers, in addition to some or all of following optional benefits: health insurance, paid time off, retirement benefits and other benefits determined by the qualified benefit providers.
In order be eligible as a qualified benefit provider under the bill, an organization must:
- Be a nonprofit organization;
- Have a board of directors that holds a fiduciary duty to the workers with respect to provision of the benefits and is at least half made up of workers performing work for customers of contracting agents or representatives of bona fide independent organizations of those workers;
- Be independent from all business entities, organizations, corporations or individuals that would present a conflict of interest that compromises workers;
- Act solely to maximize benefits to the covered workers; and
- Demonstrate adequate viability and financial sufficiency, as determined by the Department of Labor and Workforce Development.
The measure was advanced by the Assembly Labor Committee.