Gig Economy Workers May See Benefits Relief

Two U.S. senators earlier this year introduced the first federal bill that addresses benefits and the on-demand workforce.

The Portable Benefits for Gig Economy Workers Act by Sens. Mark Warner, D-Virginia, and Suzan DelBene, D-Washington, comes at a time when an increasing number of workers rely on the gig economy, or contract work, and don’t have such employer-provided benefits as retirement, health insurance and workers’ compensation like many traditional employment relations.

The bill would ask the Secretary of Labor to put $20 million in grants toward a subsidized national incubator, said Matthew Steinberg, a New York employment law attorney at Akerman LLP. States, local governments and nonprofits could then apply for grant money to help them design programs to provide benefits to gig economy workers.

“It’s designed to put the priority on models that can be taken to scale and can be national,” said Steinberg.

One important aspect of this bill is that it requires eligible applicants of these grants to create programs that include more than retirement benefits, added Steinberg. They’d need to address a range of benefits including health care, workers’ comp and disability.

“I think everyone recognizes that the gig economy isn’t going anywhere, so we’re going to have to tackle this problem some way, somehow,” he said. “This is the first step to accelerate experimentation on different ideas.”

Steinberg believes the bill has a good chance at passage. The $20 million in grant money represents a slim percentage of the proposed $4.1 trillion federal budget, and it offers something to both sides of the political spectrum, he said.

The next step for the portable benefits bill is unclear, since no vote is scheduled yet.

The Freelancer’s Union is on board and so is the tech community, said Isaac Oates, founder and CEO of HR and payroll management startup Justworks.

“At Justworks we’ve come across many entrepreneurs who want to extend benefits and perks to their workers but are legally limited in what they can offer,” he said. “Portable benefits will help them provide protections to all of their employees.”

He added that gig economy jobs are integral to the new world of work.

“It’s time we embrace this and find a way to extend benefits and protections to gig economy workers,” he said.

Andie Burjek is a Workforce associate editor. Comment below, or email at editors@workforce.com. Follow Workforce on Twitter at @workforcenews.