Proposed legislation would create $20M fund for portable benefits
The proposed fund would incentivize states, localities and nonprofit organizations to experiment with portable benefits models.
The nature of the U.S. workforce has changed significantly during the pandemic, and several members of Congress want employee benefits to reflect those changes.
The Portable Benefits for Independent Workers Pilot Program Act would establish a $20 million grant fund within the U.S. Department of Labor to incentivize states, localities and nonprofit organizations to experiment with portable benefits models for the independent workforce. Sen. Mark Warner, D-Va.; Sen. Todd Young, R-Ind.; and Rep. Suzan DelBene, D-Wash., introduced the legislation last week.
Related: Uber advocates for state-run portable benefits system
“More Americans than ever are engaging in part-time, contract or other alternative work arrangements,” Warner said. “As the workforce changes, it is increasingly important that we provide workers with an ability to access more-flexible benefits that can be carried to multiple jobs across a day, a year and even a career. This program will encourage experimentation at the state and local levels to find ways we can better support our independent, 21st century workforce.”
The pilot program would authorize a total of $20 million for competitive grants to states, local governments and nonprofits for pilot projects to design, implement and evaluate new models ($15 million) or assess and improve existing models ($5 million) for portable benefits for independent workers. Eligible models should provide any number of work-related benefits and protections — such as retirement savings, workers compensation, life or disability insurance, sick leave, training and educational benefits, health care and more.
The bill gives states and cities flexibility to determine what their portable benefits program will look like. Several states, including California, Massachusetts, Illinois, New Jersey and Colorado, have looked at implementing programs of their own. However, critics of portable benefits warn that such a system would mean benefit gig economy companies such as Uber, Lyft, DoorDash and others. Uber and other gig companies have backed portable benefits legislation in their fight to continue to classify their workers as independent contractors.
This is not the first time Congress has attempted to address portable benefits. Warner and DelBene originally introduced this legislation in 2017. Young believes the time is right to try again.
“Job opportunities in the gig economy provide workers with utmost flexibility, which is increasingly needed as parents continue to adjust schedules due to the pandemic,” he said “Supporting portable benefit options helps uncover creative solutions to addressing the needs of our drastically changing workforce.”
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