WASHINGTON – Today, U.S. Sens. Mark R. Warner (D-VA) and Steve Daines (R-MT), members of the Senate Finance Committee, introduced bipartisan legislation to establish a $500 million emergency portable benefits fund for states. Under this legislation, the U.S. Department of Labor would administer funds to states to assist them with setting up a portable benefits program for independent workers. The federal funds would also pay for a portion of the costs associated with modernizing states’ Unemployment Insurance (UI) technology systems – a move that would facilitate expanded benefits eligibility and support long-term innovation. Sens. Warner and Daines are seeking to include the proposed legislation in the next COVID-19 relief package.
“Right now, millions of independent, freelance, domestic, and entrepreneurial workers have no social safety net to fall back on. I’ve been sounding the alarm on this for years, and as this pandemic has shown, this is a problem that can wreak havoc on both individual families and on our economy as a whole,” said Sen. Warner. “As we continue to face this health and economic crisis, Congress must act to give states the tools they need to address this problem for the long term. We shouldn’t need an Act of Congress to get workers access to a safety net every time there’s a crisis or economic downturn. We will be right where we were before this crisis if we don’t find some innovative solutions. That’s why we’re introducing this legislation to provide funding for states to experiment with new models for assisting workers and learn what works through a national impact evaluation.”
“Allowing states to experiment with portable benefit models and providing funding to modernize Unemployment Insurance technology systems are just plain commonsense ideas,” said Sen. Daines. “This bill will help encourage bottom-up solutions to the problems we are seeing play out in real-time during this pandemic, and help make sure the country is better prepared to deal with these issues when the next crisis hits.”
The CARES Act granted these non-traditional workers access to state-administered unemployment insurance (UI) programs for the first time. However, reports indicate that millions of these workers have struggled to access these benefits in part due to clunky and outdated state IT systems that administer the benefits and implementation issues. What’s more, the programs created by Congress are temporary and do not address access to portable benefits in the long term.
Moving forward, this legislation would provide supplemental funds for states to update their unemployment systems for the 21st century, for the purposes of long-term innovation. The emergency benefits proposal would also provide funding for states – in partnership with cities, localities and worker advocate non-profits – to experiment with innovative proposals for portable benefits, such as paid leave, retirement plans, the longer-term expansion of UI eligibility, and other programs specific to local economies.
This bill will also help shed light on which experimental portable benefit models work best. Under this legislation, states are required to submit data on the effectiveness of their approach and its returns for workers, broken down by socioeconomic and racial figures. The Government Accountability Office will then evaluate this data and use it to create a report on the impact of the program.
For more than three years, Sen. Warner has led the bipartisan Portable Benefits for Independent Workers Pilot Program Act to establish a grant fund for states, localities and nonprofit organizations to experiment with portable benefits models for the growing independent workforce. Today’s bill – which comes after an initial bill proposal – builds on that effort in light of the COVID-19 health and economic crisis, which has left many self-employed entrepreneurs and independent workers with no or reduced incomes and little access to long-term traditional benefits programs.
This legislation has the support of a number of experts and groups including David Rolf the former President of SEIU 775, the National Domestic Workers Alliance, the Aspen Institute’s Future of Work Initiative, Marcela Escobari of the Brookings Institution, R Street Institute, the Center for American Entrepreneurship, and SAG-AFTRA.
“The Center for American Entrepreneurship applauds the introduction of the Emergency Portable Benefits for Independent Workers Act. The fact that critical benefits such as paid leave, worker retraining, child care, and retirement security are typically provided by corporate employers has emerged as a significant public policy challenge, as 1 in 10 Americans in the labor force are consistently in alternative work arrangements. In addition, the prospect of losing such employer-provided benefits is a major structural obstacle to entrepreneurship at a time when rates of new business formation have been in decline for years. By providing a framework for entrepreneurs to access benefits independent from employers, the Act will accelerate policy innovation within states with regard to the provision of critical benefits and enhance worker mobility. CAE thanks Senators Mark Warner (D-VA) and Steve Daines (R-MT) for their leadership, and looks forward to working with them toward swift passage of the Act,” said John Dearie, President, Center for American Entrepreneurship.
“We applaud Senator Warner’s long commitment to ensure independent workers have basic protections for themselves and their families when striving to make a living in the emerging gig economy. Establishing a basic set of benefit protections that working Americans can carry with them, when working and when between jobs, is critical to the safety and well-being of a growing workforce. This truth has become ever more essential in the era of a global pandemic, when so many Americans have lost jobs but still need to provide the protection of basic health care and other support for their children and families. Many of our SAG-AFTRA members take on all manner of jobs as they work to build a career in entertainment, and we want to see them supported throughout their journey,” said David White, National Executive Director, SAG-AFTRA.
“For years, a mix of too much regulation and too little creativity has led to near-stasis in the ways American firms and governments have allowed those working under alternative arrangements to access benefits. This bill promises to break through the morass and encourage real creativity. Anyone who wants to use this moment of crisis to innovate should strongly consider supporting it,” said Eli Lehrer, President, the R Street Institute.