Workforce Development

New Federal Portable Benefits Legislation Follows State and Local Bills

May 25, 2017  • Natalie Foster & Libby Reder

The nature of work is changing, both in the United States and around the world. People are working for more employers over the course of their career (increasingly simultaneously), employers are engaging workers for smaller tasks or projects, and technology is changing the kind of work that people do. Whether you look at this through the lens of globalization, automation, or the gig economy, we need new approaches from employers and other organizations, new skills and capabilities among workers, and new policies at all levels of government.

For the past year, the Future of Work Initiative has been working to understand and address the challenges posed by the changing nature of work and identify concrete solutions to address those challenges. We have encouraged innovation and experimentation, focusing especially on new ideas for the social contract, including portable benefits and protections for independent workers. Last year we published Portable Benefits in the 21st Century, which reviewed five separate portable benefit models in existence today; and the Portable Benefits Resource Guide to help state and local policymakers forge partnerships with companies, benefits providers, and workers to create innovative portable benefit models. In addition, in March we released a policy proposal calling for the creation of a Benefits Innovation Fund, a federal competitive grant program to help organizations design, implement, and evaluate portable benefit models.

Today, Senator Mark Warner — also the Honorary Co-Chair of the Future of Work Initiative — introduced the Portable Benefits for Independent Workers Pilot Program Act in the United States Senate, which is based on our Benefits Innovation Fund proposal. Congresswoman Suzan DelBene introduced a companion bill in the House of Representatives.

This bill follows a flurry of activity at the state level as policymakers, private sector actors, and others have begun to innovate and experiment with new models around the U.S. and abroad. In February, Washington State Representatives Jessyn Farrell and Derek Stanford introduced a bill to create a system of portable benefits and protections for independent workers. This legislation would require hiring companies to contribute to the safety net of independent workers, which would be administered by a worker-led organization. The House Education and Labor Committee held the first-ever hearing on the concept of portable benefits in March and Future of Work Initiative Executive Director Al Fitzpayne testified alongside individuals representing both labor and business interests. New Jersey State Assemblyman Troy Singleton also introduced similar legislation in New Jersey in March.

In a related development, the State of New York recently passed legislation that expands rideshare service — such as Lyft and Uber — beyond New York City to the entire state. The bill would also expand the Black Car Fund to all for-hire drivers in the state. The program, previously available only to for-hire drivers in New York City, provides workers’ compensation to drivers who are independent contractors and wouldn’t otherwise have an affordable way to access coverage. Coverage is funded by a small consumer surcharge added to the cost of every ride. While this model only provides workers’ compensation coverage, and not other benefits or protections, it provides a protection that workers generally don’t carry on their own but which is of disproportionate value to low-wage workers. Future of Work Initiative collaborators David Rolf, Shelby Clark and Corrie Watterson Bryant highlighted the Black Car Fund as a promising model for portable benefits in their paper, Portable Benefits in the 21st Century, published in June 2016.

Finally, Uber has taken a series of steps to offer protections to their drivers. In eight states, the company has raised pay rates for drivers by $0.05 per mile, which drivers in those states can elect to use to pay for workers compensation coverage provided through Aon. In addition, in the United Kingdom, Uber will share the cost of joining a program run by the Association of Independent Professionals & the Self-Employed. Drivers who have active accounts and have completed at least 500 trips will pay two pounds a week to access medical leave, injury coverage and time off to serve on a jury. While these moves are limited in their geographic scope and impact a limited population of workers, they represent a notable step forward in protecting workers who would otherwise be vulnerable.

In the last century, benefits and protections such as the eight hour workday, the weekend, and minimum wage standards helped transform dangerous factory work into the good, stable jobs that built the American middle class. It’s time we write new rules for the 21st century economy.