Benefits don't need to be tied to a particular job or employer, they can follow the worker.
Portable benefits - benefits that remain with workers even as they move from job to job - are an idea whose time has come. Given that up to 60 million people in the US work independently for their primary or supplemental source of income, the traditional connection of benefits with full-time, permanent employment no longer makes sense for many Americans.
Indeed, New York, Washington, New Jersey, and California have all introduced varying types of portable benefits legislation, and according to Bloomberg News, there's an expectation that Senator Mark Warren (D-VA) will "soon introduce legislation that would use a Labor Department grant program to help nonprofits and local governments experiment with portable benefits for gig workers."
So how exactly could benefits like healthcare, retirement, disability, paid leave, and so on, be provided to gig workers? The Aspen Institute recently produced a report, "Portable Benefits in the 21st Century," to answer just that question. In terms of structure, the authors suggest three core elements:
- First, and obviously, the benefits must be portable, "not tied to any particular job or company...[workers] own their own benefits."
- Second, they must be pro-rated, in other words, "each company contributes to a worker’s benefits at a fixed rate depending on how much he or she works, or earns." For example, "if a person works an hour for a delivery platform and an hour for a house cleaning platform, both would contribute an equal amount toward that worker’s benefits on a per hour basis, such as $1 for each hour worked."
- Third, they must be universal. Simply put, they must "cover independent workers, not just traditional employees."
With these three elements in place, the authors outline several benefits models that might be inspirational in constructing a system of portable benefits for gig workers.
For instance, "The Black Car" fund is a system in New York that provides workers' compensation insurance to for-hire drivers who are independent contractors. The fund currently covers "33,000 drivers affiliated with approximately 300 black car companies." The fund generates its income from "a 2.5% surcharge on every black car ride, paid by the passenger and collected by the affiliate’s member base and remitted to the fund." While this particular model only applies to workers in one industry, and only covers workers compensation insurance, the report's authors note that "in theory, the statute could have been written to include a broader collection of benefits."
Be sure to check out the full report to learn about the other models. In the end, a mixture of legislative and policy solutions will be required, as well as employers who are willing to experiment. Either way, now is the time to move forward if we are to protect ALL workers and not simply those with full-time, permanent positions.