Legislation to Test-Drive Portable Benefit Models Introduced in the House and Senate
Sen. Warner & Rep. DelBene introduce bicameral legislation to create a portable benefits pilot program
May 25 2017
WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA) and U.S. Rep. Suzan DelBene (D-WA) introduced legislation to test and evaluate innovative portable benefit designs for the growing independent workforce. As many as one-third of the U.S. workforce is currently engaged in temporary, contract or on-demand work, and the Warner-DelBene proposal seeks innovative ways to provide these workers with access to many of the social insurance protections typically provided to workers through traditional full-time employment. The legislation establishes 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.
“Whether by choice or necessity, a growing number of Americans are working without a safety net and have difficulty planning and saving for retirement, health care needs, or on-the-job injuries. The nature of work is changing rapidly, but our policies largely remain tied to a 20th century model of traditional full-time employment,” Sen. Warner said. “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. These incentive grants will accelerate experimentation at the state and local levels to better support a more independent 21st century workforce.”
“We need to support innovative policies that address the rapidly changing workforce to ensure we have an economy that works for everyone,” Congresswoman DelBene said. “That’s why I'm excited to join Senator Warner in taking an important step forward on the portability of benefits. Whether you make a living through mobile car services or by selling crafts online, workers deserve access to benefits.”
While the composition of the workforce has changed, 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. As the workforce changes, employers and policymakers need to consider a system of portable benefits that allow workers to carry these benefits with them from job to job across a lifetime in the workforce.
The Portable Benefits for Independent Workers Pilot Program Act would establish a portable benefits pilot program at the U.S. Department of Labor. It authorizes 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 such as contractors, temporary workers and self-employed 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. In order to encourage innovative thinking on these challenging issues, programs focused solely on retirement-related benefits will not be eligible. In awarding grants, the Secretary of Labor is directed to prioritize models that can be replicated on a large scale or at the national level.
“With 55 million Americans freelancing, the time has come to build a new safety net to support independent workers as they move from gig to gig,” said Sara Horowitz, founder and executive director of the 350,000+ member Freelancers Union. “The lack of portable benefits is one of the biggest impediments blocking independent workers from thriving in the new economy. I commend Senator Warner for recognizing the need to pioneer new benefits models to support a diverse and growing workforce, especially for those who are truly independent.”
"We are grateful for Senator Warner’s leadership in addressing the issue of portable benefits for all independent workers. The growing desire for flexibility among many workers has created a need to consider new approaches. A pilot program that encompasses all independent workers is a wise way to explore the development of a portable benefits program nationally, a concept Lyft supports,” said Lyft Vice President of Government Relations Joe Okpaku.
"Postmates applauds Senator Mark Warner for kicking off a national conversation that both celebrates the on-demand economy as an engine of commerce and economic growth in our communities; and also explores ways to extend a greater degree of financial certainty to those who provide their services on our platform. At Postmates, we believe our cities and communities are warehouses of talent, food, art and merchandise of all stripes. And our fleet of Postmates are instrumental to how we move those goods across cities, connect communities to local merchants, an create new experiences. That's why we welcome a discussion with government and industry leaders alike, on ways we can work together in protecting the flexibilities enjoyed by our independent contractors, while also experimenting with potential safety nets, like portable benefits, advanced by this legislation,” Postmates CEO and Co-Founder Bastian Lehmann said.
Sen. Warner has been a leader in Congress in pushing for policy solutions to address the seismic shifts that have been occurring for some time across our economy. He successfully pushed the Labor Department to update its annual workforce surveys to collect better data on the independent workforce, and he also convinced the Internal Revenue Service to update its tax-filing and record-keeping guidance for independent workers. Since 2015, Sen. Warner has co-chaired The Aspen Institute’s bipartisan Future of Work Initiative.
Before joining Congress, Rep. DelBene had a long career in the technology industry and as an entrepreneur. She is viewed as a forward-looking lawmaker trying to update laws for the way the world works today.
A copy of the bill text is available here.