By Landon Jacquinot and Anna Petrini
By some estimates, more than a quarter of U.S. workers participate in the gig economy, whether that gig work represents their primary source of income or a supplement.
These non-traditional arrangements include growing numbers of workers who’ve been classified as independent contractors rather than employees.
Independent contractors are not eligible for many benefits traditionally offered within an employer-employee relationship, including paid sick leave, workers’ compensation, retirement plans, and health insurance.
Numerous surveys of independent workers suggest satisfaction with flexible work arrangements that can afford more control over schedules, additional income, and ease of access. But compared to traditional employees, they tend to experience considerably lower rates of workplace benefit coverage. State and federal policymakers are contemplating how a suite of portable benefits, or benefits that are linked to individuals rather than particular employers, might bridge this gap. Since 2018, state lawmakers in at least a dozen states have introduced legislation that would establish portable benefit programs for gig workers, create funds to foster innovative experimentation in this area, or study related issues.
Seizing on the spirited state discourse around portable benefits, NCSL hosted a breakfast session at its recent 2022 Legislative Summit in Denver that drew gig industry leaders, worker advocates, and government officials. The Summit featured a lively panel discussion that emphasized the promise and disruption of the on-demand economy, as well as how COVID-19 accelerated labor market changes while underscoring needs and inequities.
The panel reflected a bipartisan consensus that working people deserve meaningful benefits. Colorado Senator Jeff Bridges cited common ground with the business community and other stakeholders about the moral foundation of what is owed to workers. But when it comes to implementing a portable benefits program, legal and policy questions abound. Kelsey Desloover of DoorDash highlighted state legislative initiatives and ballot measures, including those in Pennsylvania and Massachusetts. She reviewed the interplay of new industry standards for worker flexibility and a much older and dizzyingly complex legal framework for worker classification.
In addition to this conversation at the 2022 Legislative Summit, NCSL has convened a year-long work group focused on portable benefits. The work group is comprised of nearly a dozen state legislators and legislative staff members interested in exploring the potential of portable benefits to acknowledge the evolving workforce, expand worker financial security, decrease future social spending, and drive broader economic prosperity.
The bipartisan group is developing a set of general principles to aid state policymakers as they think through how to evaluate labor force needs, which benefits could follow independent workers from job to job, along with eligibility, funding and administration considerations.
Landon Jacquinot is a policy analyst in NCSL’s Employment, Labor and Retirement Program.
Anna Petrini is a program principal in NCSL’s Employment, Labor and Retirement Program.