WASHINGTON – At an event today on Capitol Hill to discuss policy solutions for the contingent and alternative workforce, Sen. Mark R. Warner (D-VA) announced two new bipartisan co-sponsors for his legislation to establish a portable benefits pilot program.
As much as a third of the U.S. workforce is currently engaged in temporary, contract or on-demand work, but those who earn all or some of their income as independent contractors, part-time workers, temporary workers or contingent workers find it difficult and expensive to access benefits and protections that are commonly provided to full-time employees, such as paid leave, workers’ compensation, skills training, unemployment insurance, tax withholding and tax-advantaged retirement savings. Initially introduced last year with Sen. Todd Young (R-IN), 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 that would allow workers to carry these benefits with them from job to job.
At today’s event, hosted by the Aspen Institute’s Future of Work Initiative – for which Sen. Warner serves as honorary co-chair – Sen. Warner announced that Sen. Michael Bennet (D-CO) and Sen. Ben Sasse (R-NE) have signed on to sponsor the portable benefits legislation.
“The nature of work is changing rapidly, but there’s a growing recognition that our policies are still mostly tied to a 20th century model of traditional full-time employment. As more and more Americans engage in part-time, contract or other alternative work arrangements, it’s increasingly important that we provide them with an ability to access more flexible, portable benefits that they can carry with them to multiple jobs across a day, a year, and even a career,” said Sen. Warner. “I’m grateful to have the support of Sen. Bennet and Sen. Sasse for this important bill, which will encourage experimentation at the state and local levels to find ways we can better support a more independent 21st century workforce. This issue doesn’t break down on partisan lines, nor should it – it’s more about whether we are going to stay stuck in the 20th century policies of the past, or put ourselves on strong footing for the economy of the future.”
Also at today’s event, which was convened to discuss the findings from the June 7 release of the Bureau of Labor Statistics’ (BLS) Contingent Worker and Alternative Work Arrangement Supplement (CWS) to the Current Population Survey (CPS), Sen. Warner announced that he will be seeking two additional studies – one from the Treasury Department and one from the Government Accountability Office (GAO) – to equip policymakers with better data about the tax situations of people in the contingent and alternative workforce.
“Between 2005 and 2018, the federal government collected basically no data about the size and scope of the contingent workforce. This month’s release from BLS was an important step, but there’s frankly still a lot we don’t know about this population of the American workforce. Without more data on this diverse population, it’s hard for policymakers to develop solutions to support them,” noted Sen. Warner. “For instance, we know from tax data that Americans are consistently reporting more self-employed or independent income than they did twenty years ago. And whether they rely on this work for all or just some of their income, one of the biggest complaints I hear from independent and contract workers is that tracking expenses and filing their taxes is just too complicated. But how many people are using that work as a ‘side hustle,’ and how many are actually relying on this work as their primary source of income? Are their tax challenges really the same? There are still big questions we don’t have the answer to, and better information is going to be key to bringing our workforce policies in line with the employment realities of the 21stcentury.”
“We learned last week that there are fifteen million Americans, or about a tenth of the workforce, who rely on nontraditional work as their primary source of income. Unfortunately, there are still many unanswered questions about how Americans are working today, including how many rely on nontraditional work to supplement their income. The federal government needs to collect comprehensive and consistent data in order to better identify the challenges of today’s workers. With additional information, policymakers can develop policies to modernize the social contract for all workers,” said Alastair Fitzpayne, Executive Director, Aspen Institute’s Future of Work Initiative.
Sen. Warner today introduced legislation that would direct the U.S. Department of the Treasury to study tax issues for a broad set of these workers – all those earning “non-employer business income.” This research would examine how tax compliance can be made easier and more effective for many independent and contingent workers, addressing issues such as information reporting, withholding, and tax filing. In addition, as follow-up to the release of the BLS contingent worker survey data, this research would examine changes in the relative share of workers earning wage or non-employer business income, looking over multiple years and across the income spectrum. This would provide new information on how workers are using non-employer business income as a supplement to wages. Bill text is available here.
In addition, Sen. Warner sent a letter today to the GAO requesting a study on the tax situation of “platform workers” – those workers who earn income through online and mobile platforms. Policymakers currently have little data on the tax situation of these workers. The GAO study would help Congress understand the tax challenges faced by these workers, how the tax code can help the platform workforce comply, and what the U.S. government needs to do to ensure appropriate revenue collection. A copy of that letter is available here.
“On behalf of Airbnb's 465,000 U.S. hosts, more than 50 percent of whom are using the money they earn on our platform to stay in their homes, we welcome efforts to create an easier, updated tax reporting system that reflects the new realities of how Americans are earning money. The typical Airbnb host in the United States earns $7,300 annually – supplemental, but meaningful income – and this research is an important step towards ensuring it is easier, not harder, for everyday Americans to supplement their income and follow tax rules,” said Casey Aden-Wansbury, Director of Federal Affairs, Airbnb.