Portable Benefits & Employer Sponsored Benefits For Independent Workers  

The Department of Labor (DOL) would get new funds to encourage the development of portable benefits models for independent workers such as contractors, temporary workers, and self-employed workers, under legislation introduced by Sen. Mark Warner, D-VA, and Rep. Suzan DelBene, D-WA. 

The Portable Benefits for Independent Workers Pilot Program Act authorizes a total of $20 million for competitive grants to states, local governments, and nonprofits for pilot projects to design, implement, and evaluate new models or assess and improve existing benefit programs that allow workers to maintain benefits when changing jobs. DOL is instructed to prioritize models that can be replicated on a large scale or at the national level. The models would need to encompass a variety of portable benefits, including retirement savings, health care, workers' compensation, income security, and disability coverage.

Next steps for the legislation are unclear, but it underscores the concerns of lawmakers from both parties and others that the current worker classification rules don't adequately address challenges faced by workers in the growing "on-demand" or "gig" economy. These independent workers are often classified as independent contractors (or self-employed, temporary, contract, freelance, or contingent workers), rather than employees, making them ineligible for many employer-sponsored benefits.

This article first appeared on Mercer Select Intelligence. Not a member? Learn more.