Are “Portable” Benefits The Wave Of The Future For Workers In The Gig Economy?

Employment Law Attorneys Discuss Benefits for “gig” Workers in Washington

Unless you live under a rock, you are likely aware of how the “sharing economy” has changed the fabric of the American workforce. Decades ago, many workers punched a proverbial time clock, working designated hours at a designated location. Nowadays, he or she is just as likely to be engaged as a “gig worker” – someone without a traditional relationship with a single employer.

These workers typically jump from one project or assignment to the next. They may find work via a digital platform (e.g., Upwork or TaskRabbit). They may provide transportation services via Uber or Lyft. Others may be engaged in construction work or be assigned duties through a temporary labor agency. They may also have a traditional job, using the gig economy to supplement their income.

Many gig workers have one thing in common: Since they aren’t considered “regular” employees, they do not have the typical fringe benefits, such as health care coverage or retirement plans. Several states – Washington among them – are exploring alternatives to assist those in the gig economy.

House Bill 2109

Proposed by Rep. Jessyn Farrell, D-Seattle, House Bill 2109 would create a portable, prorated, universal benefit for workers in the sharing economy. Generally speaking, the bill would require sharing economy companies to contribute money toward a benefits system for independent contractors who work on their platforms. The bill is similar to another that has been proposed in New York. Representative Farrell has indicated that the law would maintain the flexibility employees and employers like about contingent work.

Contracting Agents

If passed in something like its present form, the bill would apply to all “contracting agents,” generally defined as those persons or entities that facilitate the provision of services by at least 50 individual workers in a consecutive 12-month period. These agents would be required to contribute funds to qualified benefit providers who in turn would provide employee benefits to the gig workers.

As proposed, the contracting agents’ contribution would be the lesser of (a) 25 percent of the total fee collected from the consumer for each transaction of services provided or (b) six dollars for every hour that the worker provided services to the consumer. If determined per hour, the determination must be prorated per minute. The proposed law would allow companies to add this amount to the invoice or billing submitted to the consumer for the services.

Some Issues Remain

Some critics of the proposed law argue that it does nothing to solve the important employee misclassification issue that is currently on the minds of many in Washington State. They argue that many in the gig economy should already be treated as employees and not be forced to fend for themselves when it comes to retirement income and health care insurance.

Is Passage of House Bill 2109 Likely?

It is too early to say whether HB 2109 will gather sufficient momentum to be passed into law. It does offer some ground for compromise between those who say that all gig workers should be classified as employees, on the one hand, and business owners who seek flexibility in engaging workers on a project-by-project basis.

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