Portable Benefits Resource Guide
by Natalie Foster, Greg Nelson and Libby Reder Fellows, The Aspen Institute Future of Work Initiative PORTABLE BENEFITS RESOURCE GUIDE PAGE 1 - - - - is nonpartisan a year-long effortidentify to concrete THEFUTURE OF WORK INITIATIVE Copyright © 2016 by the Aspen Institute the © 2016 by Copyright and others. Foundation,PeterThe PetersonFoundation, G. The Pew Charitable Trusts, Foun Markle The dation, TheRockefeller Foundation, Brian Accenture,Sheth, Parker, Apple,Sean BlackRock, foundations,individuals, and corporate partners, including: Emanuel Friedman J. Philan thropies,Foundation,The Hitachi Foundation, Ford The JPMorgan Chase TheCo., & Kresge This paper is made possiblethethrough generousphilanthropic support of a broadrange of Senator Mark Warner and Purdue University President Mitch Daniels with Co-Chairs John Bridgeland and Bruce more information Reed. For visit as.pn/futureofwork. inspire a 21st-century capitalism a 21st-century for incenting by workforce to employers ahead. get workers help The Initiative is drivenby leadership the Honoraryof Co-Chairs turyand workplace The workforce. Initiative willfocus on key two challenges in par ticular: first, how best to advance protect and the economic interestsof Americans in the rapidly growing shared of economy goods and services; and best second, how to ways to strengthen the social contract in the midst sweeping of changes in the 21st-cen PORTABLE BENEFITS RESOURCE GUIDE PAGE 2
Advocacy to Support Public Efforts for Pilots and Public Efforts to Support Advocacy More Experiments More Design Policy Based on Early Models/Settlements Based on Early Design Policy (in particular with Uber in New York, California, and California, York, (in particular with Uber in New Massachusetts) More Information and More Input: Initial Steps and More Information More Short of a Pilot f. g. HOW DO WE START MAKING PROGRESS? HOW DO WE START KEY DESIGN QUESTIONS FOR POLICYMAKERS KEY DESIGN QUESTIONS FOR GROWING MOMENTUM FOR UPDATING THE THE FOR UPDATING GROWING MOMENTUM THE CHANGING AMERICAN WORKFORCE AND WORKFORCE AMERICAN THE CHANGING c. Creating a Portable Benefits Innovation Challenge Benefits Innovation c. Creating a Portable an Existing Provider with Partnership d. Public-Private e. a. Federal Social Safety Net Reform Legislation Reform Net Safety Social a. Federal Zones) State Pilot Projects (Benefit Innovation City or b. b. Who Administers? b. c. Who Pays? d. Is It Mandatory? Who Is Eligible? e. a. What Could Be Included? SAFETY NET Benefits Portable a. Defining Broad Appeal b. Action Policy for c. Momentum a. Context Economy On-Demand Significant Is the How b. THE ON-DEMAND ECONOMY THE ON-DEMAND ABOUT THE AUTHORS 6. CONCLUSION 5. 3. LEARNING FROM EXISTING MODELS 3. LEARNING FROM EXISTING 4. 2. 1.
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PAGE 5 PAGE TABLE OF CONTENTS TABLE PORTABLE BENEFITS RESOURCE GUIDE PAGE 3 ------
We are seeing a fundamental shift away away shift fundamental a seeing are We However, the social safety net our nation built to help ensure economic se net our nation built to help ensure the social safety However,
This resource guide is intended to be a response to that request. It is not an overall overall This resource guide is intended to be a response to that request. It is not an As policymakers across the country grapple with these shifts and major work across the country with these shifts and major grapple As policymakers
questions that will confront policymakers at all levels. at all levels. questions that will confront policymakers workers should be able to organize. Rather, it is meant to provide a thorough if a thorough to provide it is meant Rather, should be able to organize. workers of portable benefits — along with a discussion of overview various high-level the review of questions about weigh in on the current review the ODE, nor is it an attempt to forms or in what is an independent contractor or an employee, a worker whether next steps for action, particularly at the state and local level. at the state and local level. action, particularly steps for next of conversations with policymakers at the municipal, state, and federal levels, one levels, and federal at the municipal, state, of with policymakers conversations on again — a single resource with background and over repeated over request was highlights of of and suggestions issues, current policy ideas, possible the interwoven are federal, a growing number of state and local policymakers have expressed an expressed number of a growing are federal, have state and local policymakers policy ideas to address some of In dozens interest in developing these challenges. that better reflects the needs the better reflects that While traction. — has gained workforce a modern of net questions and related safety rules workforce ofmany governing the regulations force adjustments, the idea of adjustments, force net safety portable benefits — a stable and flexible tions of individual and household financial stability — have not kept pace with these kept pace not tions of and household financial stability — have individual in the economy. changes curity for hard-working Americans — in particular the suite of — in particular the suite Americans hard-working benefits and protec curity for founda to be key know we and which access through employers, tions most workers using on-demand work opportunities as a vital tool for supplemental income when income when supplemental as a vital tool for opportunities using on-demand work needed. pect to have multiple jobs over the course of a lifetime. Indeed, some workers have of have the course Indeed, some workers jobs over multiple a lifetime. pect to have Amer Many will hold multiple jobs simultaneously. that they to expect grown even crafting careers as freelancers and this increased flexibility, embraced icans have THE AMERICAN WORKFORCE IS CHANGING. IS WORKFORCE AMERICAN THE ex workers where of career an economy from the single-employer the 1950s toward a Changing Economy Stable Safety Net for for Safety Net Stable A Flexible and Flexible A Introduction: Introduction: PORTABLE BENEFITS RESOURCE GUIDE PAGE 4 - - It is also important to note that this resource guide recognizes that federal poli that federal guide recognizes resource that this important to note It is also ing ideas that could later be broadened to a national scope. ing ideas that could to form the basis for national solutions. This resource guide therefore outlines what outlines This resource guide therefore national solutions. the basis for to form experimentation, pilot for local policymaking: near-term role could be a beneficial for businesses and workers alike. On the other hand, we also know that any federal federal that any also know the other hand, we On alike. businesses and workers for models and successful need evidence and will time to develop take policy will likely cy would provide the most workable and consistent response, and that a patchwork and that a patchwork and consistent response, the most workable provide cy would quilt of problems nation might cause around the and benefits policies labor different PORTABLE BENEFITS RESOURCE GUIDE PAGE 5
— time period. Between 2005 and 2015, the number of workers in “alternative relationships” by increased than half, more 10% to 16% from of workforce nearly 10 that’s million people. Put new another way, contingent jobs accounted for all the net new job during that growth - - -
- Finally, according to according Finally,
3
Put another way, new contingent contingent new Put another way, 4 And there has been a significant in 2 This trend has also likely been driven by been driven This trend has also likely 5 opened an app to pick up a passenger, or the a passenger, opened an app to pick up is growing. Reasonable people may disagree may people Reasonable growing. is 1
and the On-Demand On-Demand and the Economy The ChangingThe Workforce American Some of this trend has been driven by workers seeking increased flexibility and al seeking increased flexibility workers ofSome by this trend has been driven The number of number The workers non-traditional 1 In their recent study “Dispatches from the New Economy: The On-Demand Workforce,” Intuit and Emergent Research Research Intuit and Emergent the New Economy: The On-Demand Workforce,” study “Dispatches from In their recent “Contingent Workforce: Size, Characteristics, Earnings, and Benefits.” GAO-15-168R. Government Accountability Office. “Contingent Workforce: Mason George Center, Mercatus of the 1099 Workforce.” “Evaluating the Growth Dourado, Eli and Koopman, Christopher. in the United States, Arrangements of Alternative Work Alan B. “The Rise and Nature and Krueger, F. Katz, Lawrence For the purpose of this paper, “non-traditional” workers includes contingent workers, workers in alternative “non-traditional” workers includes contingent workers, work ar For the purpose of this paper, Chriss, Alex. “How The On-Demand Economy is Reshaping the 40 Hour Work Week.” LinkedIn Pulse. 29 January 2016. Week.” Chriss, Alex. “How The On-Demand Economy is Reshaping the 40 Hour Work 28 January 2016. Web. of Work.” the New Economy: The On-Demand Economy and the Future Intuit, Inc. “Dispatches from http://www.slideshare.net/IntuitInc/dispatches-from-the-new-economy-the-ondemand-workforce-57613212 1995-2015.” 29 March 2016. https://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_ 1995-2015.” 29 March march_29_20165.pdf work in the on-demand reasons [on-demand economy providers] concluded as one of their key findings that “The primary and autonomy.” control work flexibility, money and to have greater economy is to earn more DC. 20 April 2015. http://www.gao.gov/assets/670/669766.pdf Washington, December 2015. http://mercatus.org/publication/evaluating-growth-1099-workforce University. rangements (including independent contractors, self-employed, on-call, and agency temps), and standard part-time work rangements (including independent contractors, self-employed, on-call, and agency temps), and standard in the work relationships in the labor market, while focusing in on a trend broadly arrangements. Our intent is to capture that some of appreciate We 1099 independent contractor relationships. most frequently which are on-demand economy, with their plain English meaning in mind. these terms have specific legal definitions, but use them here 5 2 3 4 1 consideration in where and how they work. they and how consideration in where reduced at major employers, payroll on pressures of range a downward from factors, ternative work relationships — surveys show workers citing flexibility as a primary citing flexibility workers show relationships — surveys work ternative to 16% of workforce — that’s nearly 10 million people. nearly to 16% of that’s — workforce during that time period. job growth all the net new jobs accounted for of Alternative Work Arrangements in the United States,” between 2005 and 2015, the 2005 between in the United States,” Arrangements of Work Alternative more than half, from 10% by relationships” increased number of in “alternative workers (approximately 22% since 2000) according to a 2015 Mercatus Center study. During the During study. Center to a 2015 Mercatus 22% since 2000) according (approximately around 3.5%. stagnated, falling by have same period, W2 forms Nature and Larry Rise and “The on paper recent their in Katz Krueger Alan economists of employed workers in 2006 and 40.4% in 2010. and 40.4% in 2006 of workers employed crease in the total number of the last 15 years the IRS in by issued 1099-MISC forms a 2015 GAO study, contingent workers (defined by the GAO broadly to include those in broadly by the GAO (defined workers contingent study, a 2015 GAO comprised 35.3% standard part-time workers) as as well arrangements work alternative about the merits or methodology ofmethodology or merits the about research com the because part in studies — various But according to right questions. to ask the how munity is still building muscle around employees and employers had been going through a long but accelerating divorce. had been going and employers employees LONG BEFORE A DRIVER IN SAN FRANCISCO LONG BEFORE A DRIVER York City, New desk in up to assemble an Ikea showed first app-contracted handyman PORTABLE BENEFITS RESOURCE GUIDE PAGE 6 adventure world world adventure for benefits and protections. In an economy everything where workplace from health safety, disability, care, and retirement has traditionally by been provided and administered through employers, workers are increasingly entering a complex, choose- your-own------
Shayna Shayna
7
net emerged in mid-centuryAmerica from net emerged
this social contract was formed by two key decisions: key two by formed this social contract was 6 write, t terms oflegal definitions. particular art that have —
While the number of non-traditional workers has been on the rise, the rapid growth While the number of the rapid growth has been on the rise, non-traditional workers While this model started with the “Treaty of “Treaty the with started model this While auto Three the Big between Detroit” own interest; second, a decision by labor that it was better off better labor that it was by benefits linked a decision to obtaining second, interest; own to act.” for government waiting than a specific employer “First, a recognition by business that the security and well-being of its workers was in its ofbusiness that the security and well-being was by its workers a recognition “First,
do not grant these benefits to independent contractors. However, the lack of these types of benefits does not necessarily the lack of these do not grant these benefits to independent contractors. However, mean the worker is an independent contractor.” https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee http://www.hamiltonproject.org/assets/files/modernizing_labor_laws_for_twenty_first_century_work_krueger_harris.pdf categories of common law evidence that help deter the IRS has identified three For its own determinations of tax liability, and weighed against considered in question. All factors are associated with the business relationship mine level of ‘control’ includes “employee type benefits,” described thusly: “Employee One factor looks at whether the relationship one another. generally benefits include things like insurance, pension plans, paid vacation, sick days, and disability insurance. Businesses other employment laws is largely determined by the likelihood that the employment relationships will continue beyond the determined by the likelihood that the employment relationships other employment laws is largely completion of a given task, even if only for a specified term, and whether the employer gives the worker instructions about relating to the context of on-demand economy how to do the work. For discussion of legal worker classification specifically work, see the following paper by Alan Krueger and Seth Harris: The ‘Indepen Work: for Modernizing Labor Laws for Twenty-First-Century Alan B. “A Proposal Harris, Seth D. and Krueger, December 2015. The Hamilton Project. dent Worker.’” Schmitt, Mark and Strom, Shayna. “Protecting Workers in a Patchwork Economy.” Century Foundation and New America. in a Patchwork Economy.” Workers Shayna. “Protecting Schmitt, Mark and Strom, 6 April 2016. https://tcf.org/content/report/protecting-workers-patchwork-economy/. Web. and selected Act (FLSA), Internal Revenue Code (IRC), common law, Employee status as outlined in the Fair Labor Standards 6 7 a higher profile to this trend, and in some ways provided policymakers with a more policymakers provided ways a higher profile to this trend, and in some criticized the out have Some to approach the issue. interface through which intuitive of online platforms — both labor marketplaces such as Lyft, Taskrabbit, and Instacart of as Lyft, such — both labor marketplaces online platforms brought — have and Etsy eBay, Airbnb, as such marketplaces as capital or goods as well ply if one’s work relationship is categorized as employment and not as independent con independent as not and employment as categorized is relationship work if ply one’s tracting makers and organized labor, it soon spread throughout the unionized workforce and it soon spread throughout the unionized workforce and organized labor, makers ap only protections and benefits these But economy. the across norm the became then later endorsed and codified into federal, state, and local laws and regulations. As and regulations. and local laws federal, state, later endorsed and codified into tt Strom and Mark Schmi THE MODERN EMPLOYER-CENTRIC SAFETY EMPLOYER-CENTRIC MODERN THE It was labor and management. as a bargain between tight labor market an exceptionally CONTEXT save for retirement and your child’s education are fewer if are fewer education not nonexistent. child’s and your retirement for save entering a complex choose-your-own-adventure world for benefits and protections, protections, benefits and for world choose-your-own-adventure entering a complex or to to enroll in coverage costs are often higher and incentives out-of-pocket where workplace safety, health care, disability, and retirement (to name a few) has tradition a few) name (to retirement and disability, care, health safety, workplace increasingly are workers employers, through and administered by been provided ally and whether this trend is reversible or even able to be decelerated — there is broad to be decelerated able or even trend is reversible this and whether from of agreement everything where ofset one economy an in workers: for implications enforcement of labor laws, and the increasing ease of ease the increasing and ofenforcement global mar across tasking work laws, labor about the causes — uncertainty as there remains Even technology. by facilitated kets PORTABLE BENEFITS RESOURCE GUIDE PAGE 7 Some have criticized the attention that these platforms have received… But the additional attention also an provides opportunity to some of address the longstanding disadvantages that come with being an independent worker.
- - - - -
JP Morgan Chase Institute analysis Chase Institute JP Morgan that these platforms have received, especially received, have these platforms that — economy, and what role is it playing in the in role is it playing and what economy, 9 positive and negative and negative positive — of the size and nature of us a sense for gives account holders this workforce: 8
Participation is sporadic — after the initial month ofParticipation participation, individuals participate in 56% of only earning income on labor platforms months subsequent their total income 14% from two) (only one platform earn from only Most about one-fourth ofabout one-fourth participants — and about 17% of labor platform active active of75% than more for accounts platforms online from income — capital platforms period from 2012-2015 as a secondary tend to use the platforms income earners source ofMost income: for About 0.5% of adults were observed to earn money from a platform in a given month in a given from a platform of to earn money observed adults were About 0.5% About 4.2% of during a three-year platform from an online adults earned money
JP Morgan Chase Institute. “Paychecks, Paydays, and the Online Platform Economy: Big Data on Income Volatility.” February Chase Institute. “Paychecks, Paydays, and the Online Platform Economy: Big Data on Income Volatility.” JP Morgan in the United States, Arrangements of Alternative Work Alan B. “The Rise and Nature and Krueger, F. Katz, Lawrence march_29_20165.pdf 2016. https://www.jpmorganchase.com/corporate/institute/report-paychecks-paydays-and-the-online-platform-economy. htm 2016. https://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_ 1995-2015.” 29 March 8 9 ing through an online intermediary. the “online gig workforce” relative to alternative arrangements that are brokered offline that are brokered arrangements to alternative relative gig workforce” the “online are work indicating they labor force of the entire U.S. 0.5% remains quite small — only In their 2016 paper “The Rise of Alternative Work Arrangements in the United States,” in the United States,” Arrangements Work In their 2016 paper “The Rise of Alternative also look at this question, and come to the conclusion that the size of and Krueger Katz (JPMCI) creased fissuring of the relationship between employees and employers? No compre and employers? ofcreased fissuring employees relationship between the a recent has been completed, but survey hensive ON-DEMAND ECONOMY? ON-DEMAND SO JUST HOW BIG IS THE ON-DEMAND HOW SIGNIFICANT IS THE IS HOW SIGNIFICANT efits. However, policymakers could certainly work to extend the eligible population toextend work to certainly could policymakers However, efits. ofinclude other types workers. non-traditional easiest place to start because they aggregate workers who have an established digital an established have who workers aggregate they to start because easiest place ben could facilitate contributions to portable that with platforms financial relationship portunity to address some ofsome address to portunity anbeing with come that disadvantages longstanding the the are potentially online platforms policymaking purposes, For worker. independent sized attention attention sized an op also provides the additional attention But economy. their size in the to relative PORTABLE BENEFITS RESOURCE GUIDE PAGE 8 The quick pace of business in the on- growth demand economy coupled with the dramatic growth of of this area the labor market suggest that both consumers and workers value these online platforms, and likely here they are to stay. ------it ap — doubling — https://itif.org/publica https://tcf.org/content/re with companies, third-party think with companies,
—
SUGGESTIONS FOR FURTHER READING: FURTHER FOR SUGGESTIONS
While efforts continue to generate better data continue to While efforts But as venture capitalists point out when evaluating new disruptive industries, the industries, disruptive new evaluating when out point capitalists venture as But tions/2016/04/18/three-paths-update-labor-law-gig-economy tions/2016/04/18/three-paths-update-labor-law-gig-economy Kennedy, Joe. “Three Paths to Update Labor Law for the Gig Economy.” Informa Economy.” for the Gig Paths to Update Labor Law “Three Joe. Kennedy, April 2016. Foundation. and Innovation tion Technology Lehrer, Eli. “The Future of Work.” National Affairs. Summer 2016. Affairs. National Work.” Future of Eli. “The Lehrer, ty_first_century_work_krueger_harris.pdf ty_first_century_work_krueger_harris.pdf Century Work: The ‘Independent Worker.’” The Hamilton Project. December 2015. December Project. Hamilton The Worker.’” ‘Independent The CenturyWork: http://www.hamiltonproject.org/assets/files/modernizing_labor_laws_for_twen Harris, Seth and Kreuger, Alan. “A Proposal for Modernizing Labor Laws for 21st for Labor Laws Modernizing Proposal for Alan. “A and Kreuger, Seth Harris, Schmitt, Mark and Strom, Shayna. “Protecting Workers in a Patchwork Economy.” Economy.” Patchwork in a Workers “Protecting Mark and Strom, Shayna. Schmitt, 2016. April 6, America. and New Century Foundation port/protecting-workers-patchwork-economy/
approach, others are eager to understand the implications of to understand the implications approach, others are eager changes these workforce strategies to address it.and consider different on-demand economy coupled with the dramatic growth of coupled with the dramatic growth on-demand economy this area of the labor market are and they these online platforms, value and workers that both consumers suggest are taking a reasonable watch-and-wait While some policymakers here to stay. likely est growing section ofest growing ahead of the labor market, home care and software The quick pace of ofas a percentage in the business growth each year. the labor force pears that online platforms may be accelerating an existing trend towards independent trend towards an existing be accelerating may pears that online platforms fast the were platforms labor online that showed research JPMCI same The workers. tanks, foundations, and the Department of foundations, data collaborations Labor exploring tanks, to come, accounting giant PwC this Winter unveiled its Talent Exchange, a marketplace a marketplace Exchange, its Talent unveiled accounting giant PwC this Winter to come, work. with PwC project workers to connect indpendent moving onto platforms, including food and restaurants (EatWith), business consulting and restaurants (EatWith), including food platforms, onto moving In a sign of things medicine (Doctors on Demand). and even and HourlyNerd), (Upwork tion of online/digital platforms alone (not counting the cash and informal transactions cash and informal (not counting the alone platforms tion of online/digital to start should prompt policymakers years the last three of over most freelance work) the breadth ofwe observe work now true as This is especially the future. designing for absolute numbers ofabsolute numbers rate of as important as the that aren’t participation To adoption. in the adop seen 47x growth have cities U.S. that major JPMCI finding end, the recent PORTABLE BENEFITS RESOURCE GUIDE PAGE 9 - - - - http:// - - https:// http:// https://www.jpmorganchase. http://www.techolicy.com/modernizing-employ
https://techcrunch.com/2015/11/22/the-real- SUGGESTIONS FOR FURTHER READING ON ON READING FURTHER FOR SUGGESTIONS DATA: ECONOMY GIG FREELANCE/ http://www.rstreet.org/policy-study/6-charts-that-debunk-the-gig-economy/ TechCrunch, November 22, 2015. November TechCrunch, reason-on-demand-startups-are-reclassifying-workers/ Lang, Noah. “The Real Reason On-Demand Startups Are Reclassifying Workers.” Workers.” Reclassifying Are Reason On-Demand Startups Real “The Lang, Noah. Lehmann, R.J. “Six Charts That Debunk the Gig Economy.” R Street Blog, July 22, July R Street Blog, Economy.” Charts That Debunk the Gig “Six Lehmann, R.J. 2015. http://mercatus.org/sites/default/files/Evaluating-Growth-1099-Dourado-MOP.pdf Dourado, Eli and Koopman, Christopher. “Evaluating the Growth of the Growth the 1099 “Evaluating Christopher. Eli and Koopman, Dourado, December 2015. Washington University. George Mercatus Center, The Workforce.” www.upwork.com/press/2015/10/01/freelancers-union-and-upwork-release-new- study-revealing-insights-into-the-almost-54-million-people-freelancing-in-america/ Freelancers Union and Upwork. “Freelancing in America.” October 1, 2015. America.” in “Freelancing Freelancers Union and Upwork. com/corporate/institute/report-paychecks-paydays-and-the-online-plat form-economy.htm JP Morgan Chase Institute. “Paychecks, Paydays, and the Online Platform Econo and the Online Platform Paydays, “Paychecks, Chase Institute. JP Morgan 2016. February Volatility.” on Income Big Data my: march_29_20165.pdf rangements in the United States, 1995-2015.” NBER, March 29, 2016. 2016. NBER, March 29, 1995-2015.” in the United States, rangements krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_ Krueger, Alan and Katz, Larry. “The Rise and Nature of Alternative Work Ar Work Nature of “The Rise and Alternative Larry. Alan and Katz, Krueger, dent-worker-category/ ‘independent worker’ category.” Economic Policy Institute. March 17, 2016. 2016. 17, March Institute. Policy Economic category.” worker’ ‘independent www.epi.org/publication/uber-business-model-does-not-justify-a-new-indepen ment-policies-to-unleash-the-new-economy.html ment-policies-to-unleash-the-new-economy.html model does not justify a new “Uber business Ross. Mishel, Larry and Eisenbrey, Lazar, Richard. “Modernizing Employment Policies To Unleash the New Econo New Unleash the To Policies Employment Richard. “Modernizing Lazar, 2015. December Techolicy. my.”
PORTABLE BENEFITS RESOURCE GUIDE PAGE 10 One approach is One approach to make benefits and protections portable: more to decouple them employment from new and create access models that would apply to the workers and businesses who power the ‘patchwork’ economy.
- - -
number of are earning income outside workers 10
ously or who may regularly switch jobs or employers. A worker should worker A jobs or employers. switch regularly may or who ously their and year, year to from select and maintain their benefits able to be open. have currently protections should not depend on the app they PORTABLE they particular job or company; benefits are not tied to any Workers’ benefits are attached to a specific Traditionally, benefits. their own own econ This does not match the reality of in today’s for many job. work simultane sources multiple from income their derive may who omy, the structure of such a system, most envision the system to contain of to the system the structure most envision system, a such tenets: core three While there are currently more questions than answers regarding regarding questions than answers more currently are While there
Safety Net Net Safety Growing Momentum Momentum Growing the Updating for
Here’s how Shelby Clark, CEO of Peers, David Rolf, president of president Rolf, ofCEO Clark, David 775 SEIU Washing in Shelby how Peers, Here’s
Rolf, David, Clark, Shelby, and Bryant, Waterson. “Portable Corrie Benefits in the 21st Century: Shaping a New System files/content/upload/Portable_Benefits_final2.pdf of Benefits for Independent Workers.” Aspen Institute. Web. June 2016. http://www.aspeninstitute.org/sites/default/ Web. of Benefits for Independent Workers.” Aspen Institute. 2 10
ton State, and Corrie Watterson-Bryant, Senior Research Assistant ofResearch Senior SEIU 775, define and Corrie Watterson-Bryant, ton State, Benefits”: “Portable not had the benefit of net. a safety make benefits and protections more portable: to decouple them from employment and employment benefits and protections more portable: to decouple them from make historically that have and workers to work apply that would access models create new our safety net. We must rethink our policies and programs in areas like retirement and in areas like must rethink our policies and programs net. We our safety is to One approach on our long-held values. deliver that we sure health care to make IN A WORLD WHERE AN INCREASING IN A WORLD WHERE modernizing face an important challenge: of we relationships, employment traditional DEFINING PORTABLE BENEFITS PORTABLE DEFINING PORTABLE BENEFITS RESOURCE GUIDE PAGE 11 tools or wage insurance. The system should at likely provide of least a core health insurance, and retirement, insurance for workers, injured but could be expanded to cover optional types of insurance, paid education time off, and training, and potentially even like novel products income-smoothing ------Each company contributes to a worker’s benefits at a fixed rate de at a fixed benefits to a worker’s contributes Each company organization in an era where traditional collective bargaining is increas is bargaining collective traditional where in an era organization workers. sector most private to inaccessible ingly injured workers, but could be expanded to cover optional types of cover to be expanded but could insurance workers, injured and and training, education paid time off, etc.), life, dental, vision, (like insur or wage tools income-smoothing like products novel even potentially voice worker resourced of the basis form and also It could ance. an effective A Portable Benefits system could apply to any type of worker, though it is though it type ofto any apply could worker, Benefits system Portable A benefits, name affordable to access do not have who designed with workers should likely The system workers. and part-time independent contractors ly for and insurance of retirement, a core at least health insurance, provide insurance. Other benefits of Other such as paid time offinsurance. employment, and independent workers. for exist don’t simply insurance, unemployment individu must cover economy for the new system viable benefits Any outside of als working relationship. a traditional employment Benefits cover independent workers, not just traditional employees. All not just traditional employees. workers, independent Benefits cover need. benefits they access to the critical universal must have workers it can be difficult worker to for an independent if not impossible Today, compensation as disability or workers access a critical protection such cleaning platform, both would contribute an equal amount toward that contribute an equal amount toward both would cleaning platform, worked. for each hour such as $1 hour basis, benefits on a per worker’s UNIVERSAL should support contributions from companies that can be pro-rated by by from companies that can be pro-rated contributions should support of ways mi new covering or time worked, done, dollars earned, jobs ifexample, For a or platforms. employers across different cro-working a house and an hour for platform a delivery for an hour person works PRO-RATED are earning People or earns. or she works, much he how pending on of of model a variety income from any so Benefits sources, Portable
economy, due in part to the meteoric rise of the services like Uber, Lyft, and Instacart. and ofrise the meteoric to in part due Lyft, Uber, services the like economy, the employer-employee relationship. Similarly, we’ve seen significant momentum we’ve Similarly, relationship. the employer-employee the idea ofbuilding for gig work in the who for those portable and pro-rated benefits have figured out how to support a flexible and shifting workforce over the last cen workforce and shifting support a flexible to figured out how have beyond benefits for health portability Act further enabled Care Affordable The tury. The idea of portable benefits isn’t new — construction workers and Hollywood guilds Hollywood and workers new — construction The idea of portable benefits isn’t
PORTABLE BENEFITS RESOURCE GUIDE PAGE 12 Worker advocates advocates Worker have expressed in interest portable benefits and protections because such a system has the potential to serve such as groups, domestic workers, who have been working without a functional set for of protections many years. ------have — for non-traditional workers appeals to a broad appeals workers non-traditional for including groups organizing low-skill workers as well as unions as well workers including groups organizing low-skill Policymakers at the city, state and federal levels have expressed interest interest expressed have levels and federal state at the city, Policymakers innovation to support continuing protections while worker in extending policymakers, For balance. that strikes benefits Portable creation. job and portable benefits arrangements for certainty on the classification portable benefits arrangements of platform as independent contractors. workers effort to retain their workforce. However, platform companies have steered companies have platform However, workforce. to retain their effort would it fear ofclear they because part well large in benefits these providing or indepen of are employees impact the legal view these workers whether to trade participation in see an opportunity Companies may dent contractors. certainty in the face of misclassification litigation. While mounting employee driv (e.g. users supply-side their that maintain companies platform many companies several are independent contractors, and caregivers) cleaners, ers, servicesto bene to their users akin providing in interest an expressed have programs - in part as an compensation, training, and savings worker’s fits — Platforms in the on-demand economy have found portable benefits interest found have on-demand economy in the Platforms of in the context ing largely liability business model and financial achieving — system such a because interest in portable benefits and protections expressed been have who as domestic workers, such groups, has the potential to serve set of without a functional working years. many protections for access a safety net in exchange for the value they create for companies and companies for create they the value for net in exchange access a safety if ofdone outside Second, is even work relationship. an employment society, without sacri crave workers flexibility that the would offer portable benefits advocates Worker employment. ficing the stability associated with traditional Individual independent workers find portable benefits and protections ap find portable benefits independent workers Individual could a couple of pealing for they appreciate the idea that First, they reasons. GOVERNMENT: GOVERNMENT: PLATFORM COMPANIES: PLATFORM WORKERS AND WORKER ADVOCATES: ADVOCATES: WORKER AND WORKERS
set of reasons: different albeit for interested parties, THE CONCEPT OF PORTABLE BENEFITS OF PORTABLE THE CONCEPT BROAD APPEAL BROAD PORTABLE BENEFITS RESOURCE GUIDE PAGE 13 States and cities want entrepreneurs and businesses to succeed and innovate – portable benefits have the potential to allow businesses to manage their obligations to their workers and while focusing on their core more competencies. ------“Individual “Shared Securi “Shared
focused on savings (not benefits) called “Individual Devel (not benefits) called “Individual on savings focused 13 the debate over the on-demand economy had become in had the on-demand economy over debate the in his recent book. As far back as 2005, U.S. Treasury officials were officials Treasury U.S. As far back as 2005, in his recent book.
12 that was widely circulated, and author Steven Hill called for Hill called for Steven author circulated, and widely that was 11 and while focusing more on their core competencies. focusing and while this solution also addresses long-term economic concerns associated with associated concerns economic long-term addresses also this solution sub if which, costs, and health care retirement could have unmanaged, entrepre and cities want States impacts on the economy. stantial negative the benefits have — portable and innovate businesses to succeed neurs and to their workers their obligations businesses to manage potential to allow
In mid-2015, a group of worker advocates, on-demand economy platforms, labor platforms, on-demand economy In mid-2015, a group of advocates, worker
Hanauer, Nick and Rolf, David. “Shared Security, Shared Growth.” Democracy Journal. Summer 2015. No. 37. Web. 37. Web. Hanauer, Nick and Rolf, David. “Shared Security, Shared Growth.” Democracy Journal. Summer 2015. No. http://democracyjournal.org/magazine/37/shared-security-shared-growth/ Howard, Susan, Frumkin, Samuel, et al. “Individual Development Accounts: An Asset Building Product for Lower Income Howard, Susan, Frumkin, Samuel, et al. “Individual Development Accounts: An Asset Building Product for Lower Consumers.” Community Development Insights, Office of the Comptroller of the Currency, U.S. Department of the U.S. Consumers.” Community Development Insights, Office of the Comptroller of the Currency, February 2005. Treasury. http://www.occ.gov/news-issuances/news-releases/2005/nr-occ-2005-25a.pdf Rview. 22 July 2015. Web. http://bostonreview.net/us/steven-hill-uber-economy-individual-security-accounts 22 July 2015. Web. Rview. Hill, Steven. “The Future of Work in the Uber Economy: Creating a Safety Net in a Multi-Employer World.” Boston Hill, Steven. “The 11 12 13 unions, VCs, and thought leaders from both sides of and thought leaders from both sides the political spectrum came togeth VCs, unions, Men Emeritus Lenny Director McKinsey common ground. Organized by er to look for opment Accounts.” Security Accounts” Security a similar idea for advocating preneur Nick Hanauer wrote a piece in Democracy Journal calling for for calling Journal Democracy in piece Hanauer wrote a Nick preneur ty Accounts” ability that it imposes? In response to this polarization, many thought leaders beganleaders thought many polarization, this response to imposes? In it that ability of In the summer Rolf solutions. looking for entre 2015, labor leader David and activist creasingly polarized, particularly in the media. Is the growing on-demand economy economy on-demand growing in the media. Is the polarized, particularly creasingly in the vulner workers for bad or is it ultimately with its flexibility, workers for good THROUGH 2014 AND 2015, MOMENTUM FOR POLICY MOMENTUM FOR ACTION goal ofgoal access to the benefits and to maintain or expand designing policies must be in the last 50 years. protections the middle class has gained incentivizing companies to shift low-income employees to less stable work arrange to less stable employees companies to shift low-income incentivizing design, and a core to be addressed in system this is a challenge believe We ments. about portable benefits — and some advocates have raised concerns about whether whether raised concerns about have — and some advocates about portable benefits while further net would create a second-tier safety implementing portable benefits cause this new agreement could forge what may be the future offuture the be may what net. forge could agreement safety the social new this cause of agreement on many questions the fundamental there is not universal However, Overall, society stands to gain from a system of society stands to gain from a system be portable benefits and protections Overall, PORTABLE BENEFITS RESOURCE GUIDE PAGE 14 President Obama President highlighted the need for safety net flexibility and portable benefits in his State of the Union Speech saying, “for Americans short of basic retirement, benefits should be just as mobile as everything else is today.” ------Most re Most The Feder The 20
— created and
The Wall Street Jour Wall Street The 16 President Obama high to examine existing mod existing to examine 21 “Common Ground for Independent Ground for “Common
The San Francisco Chronicle. The San Francisco for portable benefits demonstration projects. portable benefits for
Uber entered into a proposed settlement for two misclas for two Uber entered into a proposed settlement 19 and the 15 , a policy event to discuss the idea ofa policy event portable benefits and protec bipartisan Aspen Institute Future of Work Initiative of Future Aspen Institute bipartisan Work in exchange for $84 million and several key changes to its employ changes key $84 million and several for in exchange 22 Department of asking Congress to fund the were Labor announced they many of many section of in the next those models are summarized this paper. with design principles for a new, portable, and pro-rated social safety net for net social safety and pro-rated portable, a new, principles for with design
— saying, “for Americans short of “for saying, benefits should be just as mo retirement, basic 18 for a new kind of work. The event was keynoted by Labor Secretary Tom Perez, Tom Secretary by Labor keynoted was kind ofevent a new for The work. The Washington Post Washington The 17
14 , Even as we write this primer, we’re seeing significant steps forward in the landscapeforward significant steps seeing we’re write this primer, as we Even In January of 2016, momentum gathered at the federal level. ofIn January level. gathered at the federal momentum 2016, In December, the In December, https://www.fmcs.gov/wp-content/uploads/2016/02/2017_Budget_Congressional.pdf 2016. Web. Federal Mediation and Conciliation Service. “Congressional Budget Submission & Annual Performance Feb Plan.” Mclean, Robert. “Uber will pay up to $100 million to settle labor suits.” CNN. 22 April 2016. Web. http://http:// 22 April 2016. Web. Mclean, Robert. up to $100 million to settle labor suits.” CNN. “Uber will pay money.cnn.com/2016/04/22/technology/uber-drivers-labor-settlement/ https://www.dol.gov/newsroom/releases/20160209 http://www.sfgate.com/business/article/2-new-initiatives-call-for-benefits-safety-net-6628645.php Department of Labor. “President’s 2017 Budget Bolsters SupportDepartment “President’s for Working Families.” 9 February of Labor. 2016. Web. Said, Carolyn. “2 new initiatives call for benefits, safety net for gig workers.” SF Gate. 13 November 2015. Web. 13 November 2015. Web. Said, Carolyn. “2 new initiatives call for benefits, safety net for gig workers.” SF Gate. social safety net.” The Washington Post. 12 November 2015. Web. https://www.washingtonpost.com/news/wonk/ Washington Post. 12 November 2015. Web. social safety net.” The wp/2015/11/12/tech-companies-labor-advocates-and-think-tankers-of-all-stripes-call-for-sweeping-reforms-to- the-social-safety-net/. DePillis, Lydia. “Tech companies, labor advocates, and think tankers of all stripes call for sweeping reforms to the DePillis, Lydia. “Tech Street Journal. 10 November 2015. Web. http://http://www.wsj.com/articles/on-demand-workers-need-portable- Street Journal. 10 November 2015. Web. benefits-tech-and-labor-leaders-say-1447199167 Silverman, Rachel Emma. “On-Demand Workers Need ‘Portable Benefits,’ Tech and Labor Leaders Say.” The Wall Leaders Say.” Labor Tech and Silverman, Rachel Emma. “On-Demand Workers Need ‘Portable Benefits,’ https://www.whitehouse.gov/the-press-office/2016/01/12/remarks-president-barack-obama-%E2%80%93- prepared-delivery-state-union-address speech.” Medium. 13 January big idea buried in Obama’s “The 2016. Web. Foster, Natalie. https://medium.com/ondemand/the-big-idea-buried-in-obama-s-speech-30fe2832c0c#.uirijr2js “Remarks of President Barack Obama—State of the Union Address as Delivered.” The White House. 13 January White House. 2016. “Remarks of President Barack Obama—State of the Union Address as Delivered.” The Block, Sharon and Borzi, Phyllis. “Lunchboxes, Carry-on Bags and Retirement.” U.S. Department Blog. 22 April of Labor Block, Sharon and Borzi, Phyllis. “Lunchboxes, Carry-on Bags and Retirement.” U.S. 2016. https://blog.dol.gov/2016/04/22/lunchboxes-carry-on-bags-and-retirement/ Department April 2016. See DOL blog: of Labor. Aspen Institute. The Next Big Idea: Portable Benefits for Independent Workers. 16 December 2015, Washington, D.C. D.C. Next Big Idea: Portable The Benefits for Independent Workers. 16 December 2015, Washington, Aspen Institute. http://www.aspeninstitute.org/events/2015/12/16/Portable-Benefits-for-Independent-Workers Web. 22 20 21 19 16 17 18 15 this conversation is a change stemming in part from that settlement: the formation of stemming in part from that settlement: the is a change this conversation 14 sification lawsuits to Most relevant by the court). ment practices (the settlement still needs to be approved around systems that could provide benefits and protections to those who work in the gig who protections to those benefits and that could provide around systems April of In late 2016, economy. portable cently, in April, the Department of in Labor hosted a gathering cently, part of as retirement moresystems make work to portable benefits els for their ongoing creation of a $100 million fund fund. pilot its own proposed since has Service and Conciliation Mediation al Speech Then in Act is all about.” Care Affordable what the That’s else is today. bile as everything the February, lighted the need for safety net flexibility and portable benefits in his State net flexibility safety lighted the need for of the Union el including New America Foundation President and CEO Anne-Marie Slaughter and and CEO President America Foundation el including New President Douglas Holtz-Eakin. Forum Action American tions pan diverse as an ideologically well as Warner, included Senator and the discussion co-chaired by Senator Mark Warner and Purdue University President Mitch Daniels — President Mitch Daniels University and Purdue Mark Warner Senator co-chaired by the first to host was nal Workers” in the was reported The letter economy. in the gig work those who donca and Future of Work Initiative Fellow Natalie Foster, about 40 of about these cross-sector Foster, Natalie Fellow Initiative of and Future donca Work Medium entitled on a public letter leaders signed PORTABLE BENEFITS RESOURCE GUIDE PAGE 15 ------
https://medi https://tcf.org/con
November 9, 2015. 9, November https://www.dol.gov/newsroom/releases/20160209 http://www.cnn.com/2016/05/25/opinions/uber-guild-agreement-porta SUGGESTIONS FOR FUTHER READING: FUTHER FOR SUGGESTIONS This contemporary spin on an 11th centurythe potential to beguild structure has 23 Foster, Natalie. “Uber’s Major Step Forward for Workers.” CNN.com. May 25, May CNN.com. Workers.” for Major Step Forward “Uber’s Natalie. Foster, Strom, Shayna and Schmitt, Mark. “Protecting Workers in a Patchwork Econ Patchwork in a Workers Mark. “Protecting and Schmitt, Strom, Shayna Fact Sheet from Department of Sheet from Retirement. De Fact and Benefits Labor on Portable 2016. 2016. ble-benefits-natalie-foster/ tent/report/protecting-workers-patchwork-economy/ omy.” Century Foundation and New America. April 6, 2016. 2016. April 6, America. and New Century Foundation omy.” cember 9, 2016. 2016. cember 9, um.com/the-wtf-economy/common-ground-for-independent-workers-83f3fb cf548f#.150vs3edo Common Ground for Independant Workers Letter. Letter. Workers Independant for Ground Common
The conversation has further been driven forward with the release of release the with forward driven been further has several conversation The Web. http://www.cnn.com/2016/05/25/opinions/uber-guild-agreement-portable-benefits-natalie-foster/ Web. May 2016. http://www.nytimes.com/2016/05/11/technology/uber-agrees-to-union-deal-in-new-york.html?_r=0 25 May 2016. Major Step Forward for Workers.” CNN.com. “Uber’s Foster, Natalie. Scheiber, Noam and Isaac, Mike. “Uber Recognizes New York Drivers’ Group, Short of a Union.” New York Times. 10 Drivers’ Group, Short of a Union.” New York “Uber Recognizes New York Scheiber, Noam and Isaac, Mike. 23 swer to the challenges of 1099 and contingent work. The next step is for policymakers to for policymakers of step is to the challenges The next work. swer 1099 and contingent start crafting those answers. thoughtful papers on the topic, and gatherings at think tanks and academic institutions. and academic institutions. tanks at think the topic, and gatherings thoughtful papers on an an for advocates and worker business owners among both is growing Momentum to health insurance, workers’ compensation, access to retirement savings, and more. and access to retirement savings, compensation, workers’ to health insurance, economy workers. While the guild’s leaders are still working out the details, it would would it out the details, leaders are still working While the guild’s workers. economy of range a members its access as such offer to ability the protections, and benefits have York. because it today, American workers a 21st century net for safety a critical step toward on-demand to benefits portable providing for model workable a to lead well very could the Independent Drivers Guild, recently formed by the International Association of Association International the by formed recently Guild, Ma Drivers Independent the in New drivers black car labor union representing the Workers, Aerospace chinists and driver associations. In mid-May 2016, Uber recognized a new worker association called association worker a new recognized Uber 2016, mid-May In associations. driver PORTABLE BENEFITS RESOURCE GUIDE PAGE 16 - - - - work
24
25 in this area are still nascent, though there are some nascent, though there are some in this area are still
were passed that required pro-rated contributions from platforms to support passed that required pro-rated contributions from platforms were the is Union the Freelancers platforms, on the work finding are who those supporting those who work outside the traditional social safety net. Currently, net. Currently, safety social the traditional outside work those who supporting that the Freelancers Union opt in to the benefits and protections individuals insurance. and term life as medical, disability, them, such for has negotiated work, but ifto need a policy change a mandate The current model doesn’t And other third party benefits administrators And other third foreseen this era of has Horowitz, by Sara in The Freelancers Union, led decades and built an organization around two nearly creased freelancing for income from a 2.5% surcharge on every ride, paid by the passenger and col the passenger paid by ride, on every surcharge income from a 2.5% from (Adapted remitted to the fund. member base and the affiliate’s lected by Clark/Rolf/Watterson) purposes of the state statute, affiliated drivers are the fund’s employees and employees purposes of are the fund’s affiliated drivers the state statute, if injured compensation coverage workers’ to be afforded are able therefore employees the structure of are only By drivers the working. while the statute, of its the purposes of the fund for compensation. The fund derives workers ers compensation insurance to “Black Car” (for-hire livery) drivers who are who drivers livery) (for-hire Car” “Black to compensation insurance ers access to traditional otherwise not have independent contractors and would driv affiliated than 33,000 There are more compensation insurance. workers’ Uber. and Lyft for plan, including drivers the Black Car Fund’s by ers covered the for contractors, are independent drivers industry’s Although the for-hire The Black Car Fund was established in the state of New York to provide York to provide was established in the state ofFund The Black Car New FREELANCERS FREELANCERS UNION BLACK BLACK CAR FUND
Learning from from Learning Models Existing Rolf, David, Clark, Shelby, and Bryant, Waterson. “Portable Corrie Benefits in the 21st Century: Shaping a New System of Benefits for Independent Workers.” Aspen Institute. of Benefits for Independent Workers.” Aspen Institute. http://www.aspeninstitute.org/sites/default/files/content/upload/Portable_Benefits_final2.pdf June 2016. Web. 3 25 Ibid 24
existing models that provide inspiration. Here are several concepts that many are many concepts that are several inspiration. Here models that provide existing models: illustrative pointing to as potentially POLICY DESIGN DISCUSSIONS PORTABLE BENEFITS RESOURCE GUIDE PAGE 17 ------26 Act, these plans are governed by a board comprised equally of and a board comprised equally by employer these plans are governed Act, (Ex applicable to unionized workforces. only and are union representatives, cerpted from Clark/Rolf/Watterson) provides a useful mechanism to share the costs of has worker provides when a benefits as actors or con such employers, switches regularly or multiple employers The terms of bargained between the plan are collectively struction workers. or group of and a union, in the Taft-Hartley As set forth the employers unions. banks.” banks.” The benefits geographic area or industry. are often in the same who ployers, contribution made to hourly are based on a negotiated to workers provided This on behalf plan his or her employer. the multiemployer of by an employee Such as those used by Hollywood guilds and building trades to set up “hour to and building trades guilds Hollywood those used by as Such or more em two by benefit plan shared plan is an employee multiemployer A City Pool, which funds both a coordinated health care program and individ funds both a coordinated which City Pool, medical accounts can These individual ual medical reimbursement accounts. time. or over simultaneously employers contributions from multiple receive Plan, Health Francisco San the by administered are accounts Reimbursement structure. entity with an independent governance is a government which local health care dollars as well as contributions from employers. Employers Employers as contributions from employers. local health care dollars as well of health care expenditures are required to make (depend a certain amount Expendi ing on size) on behalf than 8 hours. more work of who all employees or a contribution to the health insurance toward tures can be direct payment of Prior to the enactment of Ordinance. Security Care the Health Afford the to uninsured healthcare coverage SF aimed to provide Healthy Act, able Care of 18-64, regardless immigration status, ages individuals status, employment and federal, state, by The program is funded health conditions. or preexisting A city or state could also create and administer portable benefits accounts. The benefits accounts. could also create and administer portable city or state A of cited example most commonly model, a San Francisco this is the Healthy Board of the city’s Supervisors by 2006 through approval program created in ensuring a fiduciary responsibility to the workers given its non-profit status. non-profit status. its given workers a fiduciaryensuring to the responsibility independent for benefits offering are currently companies that such Other Even. and Stride Health, include Peers, contractors type oftype while those benefits up to administer scale that could organization MULTIEMPLOYER MULTIEMPLOYER PLANS HEALTHY SAN FRANCISCO SAN HEALTHY
26 Ibid.
PORTABLE BENEFITS RESOURCE GUIDE PAGE 18 - 27 http://
http://www.occ.gov/news-issuances/news- http://democracyjournal.org/magazine/37/shared- SUGGESTIONS FOR FURTHER READING FURTHER FOR SUGGESTIONS BENEFITS PORTABLE ON the form ofthe form who choose not to contribute to the cost. Those tax subsidies) and, if fee become unemployed, a lower they pay participate via a union from Clark/Rolf/Watterson) basic benefit. (Adapted a lower-level receive commonly administered by trade unions in Nordic countries. It operates It countries. in Nordic unions trade by administered commonly is volun participation where Iceland, and Sweden, in Denmark, Finland, incorporates that a compulsory operates Belgium system quasi-Ghent tary. a small portion offees comprise only Membership retirement benefits. (in government the and employers, benefits as employees, unemployment The Ghent system is a publicly subsidized unemployment insurance system system insurance subsidized unemployment is a publicly system The Ghent THE GHENT SYSTEM GHENT THE
Insights, Office of the Comptroller of the Currency, U.S. Department Department U.S. Office of Insights, Comptroller the of Currency, the of 2005. February the Treasury. releases/2005/nr-occ-2005-25a.pdf Howard, Susan, Frumkin, Samuel, et al. “Individual Development Accounts: An Accounts: Development Frumkin, Samuel, et al. “Individual Susan, Howard, Community Development Income Consumers.” Lower Asset Building Product for security-shared-growth Hanauer, Nick and Rolf, David. “Shared Security, Shared Growth.” Democracy Shared Growth.” Security, “Shared David. Nick and Rolf, Hanauer, (2015). 37 No. Journal benefits_for_the_rest_of_us059188.php Workers Need a New Deal.” Washington Monthly. January/February 2016. 2016. January/February Monthly. Washington Deal.” a New Need Workers www.washingtonmonthly.com/magazine/januaryfebruary_2016/features/ Hill, Steven. “Benefits for the Rest of Ranks for the “Benefits Growing Us: The of Contingent Steven. Hill,
27 Ibid.
PORTABLE BENEFITS RESOURCE GUIDE PAGE 19
it may also be a good time to expected rethink and necessary benefits for a new As policymakers debate what benefits could be included in a portable system, work reality. - - - - -
to support innovation and independent work, and independent work, innovation to support
Access to or automatic enrollment in retirement savings program, em program, savings in retirement enrollment or automatic to Access contribu pre-tax employee savings, retirement to contributions ployer savings retirement tions to Although the Affordable Care Act improved the portability ofAct improved health in Care Affordable Although the contributions or could still benefit from non-traditional workers surance, and more in costs more manageable health for paying mechanisms to make receive. full-time employees line with what Access to health insurance; employer-funded health insurance; pre-tax pre-tax insurance; health employer-funded health insurance; to Access savings health care to contribution employee RETIREMENT HEALTH CARE CARE HEALTH
Key Design Questions Key for Policymakers
4
of a partial list is Below could be included: benefits that potential including new benefits — such as wage fraud protection — that address issues that issues address that — protection fraud wage as such — benefits new including freelancers and independent contractors. are more acute for bate what benefits could be included in a portable system, it may also be a good time good also be a may it system, portable benefits could be included in a bate what involve This could work reality. and necessary a new for to rethink expected benefits employees as for non-traditional workers, others such as unemployment insurance insurance as unemployment others such non-traditional workers, as for employees de As policymakers is not a binary status. employment less sense when might make of income, and encouraging financial saving and future planning. And while many of many while And and future planning. saving and encouraging financial income, for of — are just as relevant savings health care and retirement — like these benefits ant role in supporting stability and productivity in the economy and society more society and economy the in productivity and stability supporting in role ant — protecting against risk ofbroadly loss protecting against sudden injury or illness, Over time, employer-based benefits and protections have evolved to play an import to play evolved and protections have benefits employer-based time, Over WHAT COULD BE INCLUDED? WHAT here are several questions that policymakers should ask about the potential design should ask about the potential design questions that policymakers here are several ofsystem: a portable benefits AS POLICYMAKERS CONSIDER WAYS CONSIDER WAYS AS POLICYMAKERS PORTABLE BENEFITS RESOURCE GUIDE PAGE 20 - - - - nobody works while contagious out of while works ofnobody fear Non-traditional lost income. (young, old ones loved for also face difficult choices around caring workers about Amidst a national conversation the same reason. for or in between) companies are aiming to address this pain point through income smooth point through pain this to address aiming are companies as well. and states are innovating ing tools, FMLA, vacation Sick leave, that help ensure would worker the non-traditional for sick leave Solving policymakers to consider. One significant challenge would be determining One significant challenge to consider. policymakers if insurance is determining unemployment is eligible for who the worker should strengthen outcomes rather policy and any to work, and how when startup technology Several workers. than reduce benefits to unemployed While most elements of the safety net are regulated at the federal level, While most elements of level, net are regulated at the federal the safety administered at the regulated and is usually insurance unemployment type of appealing a particularly making this state protection for level, state al’s inability to work doesn’t cause financial catastrophe. Because non-tra catastrophe. cause financial doesn’t inability to work al’s are more vulnerable in this type ofditional workers situation, without of protection a extend to how out figuring protection, job or leave medical important. be especially may this type to gig workers If workers are disabled — at work or otherwiseIf — and rendered unable to are disabled — at work workers that an individu to ensure payments provides disability insurance work, a worker is injured on the job in exchange for a shield from legal liability/ a shield for is injured on the job in exchange a worker of in the context Since injuries could also occur torts. work, non-traditional are that these workers to ensure ways new to explore wish may policymakers costs associated with on-the-job injuries. compensated for remains to be done. been applicable in has only is an idea that, to date, compensation Workers’ applies when that coverage for pay employers context: the W2 employment devastating in the area of retirement security, where a shift away from em away a shift where of in the area devastating security, retirement distressingly in resulted has that trend a started pensions ployer-provided and as the MyRA such approaches New of levels retirement savings. low more but direction, right the in step a are plans Choice Secure state-run The effects effects The and obvious be most may the unraveling of net safety of the PAID LEAVE PAID UNEMPLOYMENT UNEMPLOYMENT INSURANCE DISABILITY INSURANCE DISABILITY WORKERS’ COMPENSATION WORKERS’
PORTABLE BENEFITS RESOURCE GUIDE PAGE 21 ------federal, state, and local. It’s un It’s and local. state, federal, —
in particular in transportation and in- — such as minimum wage, overtime and fam overtime as minimum wage, such — are generally not applied to non-W2, non-traditional workers. workers. non-traditional not applied to non-W2, are generally
— ing a workforce with relevant, current training. There are significant state current with relevant, ing a workforce are independent workers which for dollars available workforce and federal could be unlocked. but which ineligible currently transportation industry, but similar efforts are still progressing in other but similar efforts transportation industry, industries. interest in ensur a shared have individuals and companies, Governments, Liability insurance is covered through third-party providers, and can be third-party providers, through is covered Liability insurance required in some professions and transportation insurers between agreements Multi-state home care. for the a template provided Uber have and Lyft companies like network Non-traditional workers in contracting relationships often indicate that indicate often relationships contracting in workers Non-traditional ofsome are tax obligations 1099 their meeting and understanding their to automate withholding could be a A solution most significant pain points. benefit of collecting entities alike. and tax workers value to great for example in the case of drivers working a number of in the case of example for hours working consecutive drivers of Some be deemed unsafe. that would these protections could potentially bene portable or associations alongside with guilds directly be negotiated fits. ily leave leave ily administered at all levels are These laws set workers ofwhere to a world work, these will apply flexible clear how or task rather the project paid by is work or where schedules own their corollary interest in exploring be a public ideas, but there may than hourly, Wage and hour protections and hour Wage mandating paid leave, an innovative city or state could include non-tradi could include or state city innovative an leave, paid mandating like specific situations — at least for proposal in a paid leave tional workers York as New — such states Some care. family or leave maternity/paternity indepen with including experimenting begun Island — have and Rhode laws. FMLA state-level new dent contractors in TRAINING AND DEVELOPMENT AND TRAINING LIABILITY INSURANCE LIABILITY TAXES Withholding, guidance WAGE AND HOUR LAWS LAWS HOUR AND WAGE overtime Minimum wage,
PORTABLE BENEFITS RESOURCE GUIDE PAGE 22 There are a wide are There variety of options for how a third- party administered system could work, and a wide range of opinions on what would be best for workers and business. ------
there are several options there are several She suggests benefits and protections should be She suggests 28 argue for a non-profit third party administrator of a non-profit third party administrator argue for ben er. However a pooled resource for workers could potentially fulfill could potentially workers for a pooled resource However er. ifthis need — especially contribute. able to were platforms For ridesharing and other on-demand tasks, access to the neces tasks, other on-demand ridesharing and For sary — and under independent is critical tools and equipment employ the by directly provided be wouldn’t likely law contractor EQUIPMENT FINANCING OR LEASING OR FINANCING EQUIPMENT
There are a wide variety ofThere are a wide a third-party administered for how options Benefits and protections for workers could be delivered through a gov through a be delivered could workers for Benefits and protections
Horowitz, Sara. “Help for the Way We Work Now.” The New York Times. 7 September 2015. Web. Times. 7 September 2015. Web. New York The Horowitz, Sara. “Help for the Way We Work Now.” http://www.nytimes.com/2015/09/07/opinion/help-for-the-way-we-work-now.html?_r=0 28 should be a strong preference for groups who are most effective in serving are most effective groups who for should be a strong preference munity organizations that would collect payments and distribute benefits distribute and collect payments would that organizations munity the case that there also makes Horowitz freelancers needed them.” when efits and protections. groups and other com faith-based nonprofits, unions, by “administered system could work, and a wide range of and a wide range be best could work, would opinions on what system at the Free as Sara Horowitz such Advocates and business. workers for lancers Union one time. ment accounts for workers, paid into by employers and accessible by by and accessible employers paid into by workers, ment accounts for or hold multiple jobs at transition from job to job, as they even workers level, an example of this is Healthy San Francisco, profiled above. Among profiled above. of an example San Francisco, level, this is Healthy reimburse health individual created Francisco San Healthy things, other ernment program at the city, state, or federal level. At the federal level, level, federal the At level. or federal state, city, the program at ernment At the city program. and universal effective, is a popular, Security Social third party administering the benefits. third party administering the benefits. a wide-range of — within these cate a wide-range overlap models — and significant or an independent all models contemplate either the government gories, efits — taking in fees and contributions, determining available benefits, benefits, available determining fees and contributions, efits — taking in the terms of and contracting eligibility and service provisions, governing While there could be the benefits. to implement with specific providers AS IN THE EXISTING MODELS OUTLINED ABOVE, OUTLINED THE EXISTING MODELS AS IN ofthe task for responsible could be who for ben portable administering WHO ADMINISTERS?
PORTABLE BENEFITS RESOURCE GUIDE PAGE 23 - - - - - Rolf 29 worker earnings (perhaps with a certain maximum) and flexible workers and the workers maximum) and flexible with a certain (perhaps earnings worker voluntary contributions. pretax their own make could also self-employed the self-employed) and a broker for job-related benefits. These WCBEs would WCBEs These benefits. job-related for broker a and self-employed) the the that opt-into platforms mandatoryfrom contributions be funded through behalf on made be would and classification worker flexible workers. flexible of to of Mandatorylevels minimum according set be would contributions these In particular, a “safety net” for gig economy workers should consist ofconsist should struc new workers gig economy net” for “safety a In particular, combine some that (WCBEs) exchanges” benefits “worker-controlled called tures for vehicle of savings of the features a SEP IRA retirement most versatile (the between taxi, livery, on-demand) taxi, livery, between A uniform surcharge is applied to all hired car fees (the tax currently differs differs (the tax currently is applied to all hired car fees surcharge uniform A
From a more right of center perspective, in a recent article for National Affairs Affairs National From a more right of in a recent article for center perspective, SEIU International Vice President David Rolf 2015 op-ed with venture President David whose — Vice SEIU International Hanauer, Nick and Rolf, David. “Shared Security, Shared Growth.” Democracy Journal. Summer 2015. No. 37. Web. 37. Web. Hanauer, Nick and Rolf, David. “Shared Security, Shared Growth.” Democracy Journal. Summer 2015. No. http://democracyjournal.org/magazine/37/shared-security-shared-growth/ 29 worked out, and this model relies on a state-level tax change in revenue, here is the in revenue, tax change out, and this model relies on a state-level worked rough plan as announced: emerge in the on-demand space is the Independent Drivers Guild announced in mid- space is the Independent Drivers in the on-demand emerge While details are still being discussed at the end of 2016, above. May two section Interestingly, one of the first third-party administrator frameworks we have seen we have one of the first third-party administrator frameworks Interestingly, consumer choice: consumer change, which translates the portable benefits concept to a framework similar to oth translates the portable benefits concept to a framework which change, of in the form choice presented with worker er healthcare and retirement markets and have a board consisting of a board consisting representatives. and have at least 50% worker President of type of a new Eli Lehrer, is calling for R Street Institute, ex benefits provide these benefits. At a minimum, RolfAt a minimum, for requiring qualified providers argues benefits. these provide strong conflict maintain of interest policies, a fiduciary duty, have to be non-profit, argues that if the government mandates participation in a portable benefits system, system, participation in a portable benefits mandates argues that if the government of ownership from the organizations that and accountability must have the workers capitalist Nick Hanauer proposed a version ofSecuri “Shared proposed a version capitalist Nick Hanauer calls portable benefits similar views. in this paper) — has expressed earlier (referenced Accounts” ty the best possible access to benefits and supports.” supports.” and access to benefits the best possible groups to work closely with the workers they represent, implementing structures structures represent, implementing they the workers with closely work groups to to negotiate workers for power aggregating market and their top needs, aligned with the diverse, disaggregated, and hard-to-reach populations of populations hard-to-reach and disaggregated, the diverse, work non-traditional enable these benefits will groups to administer worker unions and ers: “positioning PORTABLE BENEFITS RESOURCE GUIDE PAGE 24 One of the most important questions is who should pay for the benefits and of protections the independent Should worker. all contributions a single come from or type of entity, be should there multiple types of contributors? ------and any solution could ultimately ultimately could solution any and — is who should pay for the benefits and pro for should pay is who
classification of the workers. Many are calling for any policy developing policy developing for any are calling Many classification ofworkers. the econo the on-demand portable benefits to broaden participation beyond ofportion itselfis growing though small which the relatively a still my, 1099 every could mandate that for a law example, For American economy. Platforms such as Lyft, Instacart, and Handy could be responsible for pay could be responsible Instacart, and Handy as Lyft, such Platforms work done on ing into these portable benefits accounts based upon the the employment this should not affect Ifthe platform. law, mandated by COMPANIES
York City York The guild is a separate non-profit, rather than a union, but it is affiliated with but it is affiliated non-profit, rather than a union, The guild is a separate District 15 of in New represents black car drivers which the Machinists Union, also represents the drivers in conversations between the IDG and Uber’s man and Uber’s IDG the between in conversations drivers also represents the agement the Independent Drivers Guild (IDG) Drivers the Independent and who are members, protections to drivers benefits and provides The IDG The funds resulting from that charge or tax go to a third-party administrator, administrator, go to a third-party or tax from that charge resulting The funds
include a mix of or all of some these options: of entity, or should there be multiple types of contributors? We see four possible con see four or should there be multiple types ofof contributors? We entity, protections and benefits funding to tributors ONE OF THE MOST IMPORTANT QUESTIONS IMPORTANT MOST THE OF ONE Should all contributions come from a single type tections of the independent worker. WHO PAYS? Health and Peers, or larger companies like Intuit? One could see policymakers creat policymakers see could One Intuit? like companies larger or Peers, and Health to compete. of versions entities above ing the rules and allowing different the and non-profit intermediaries like TIAA play? And how should we include tech start- should And how play? TIAA and non-profit intermediaries like including Stride workers, independent for problems to solve are working ups who involved in creating these new vehicles so that they also serve as early examples of examples as early also serve so that they vehicles these new in creating involved for-profit What role should existing this disaggregated workforce? for voice worker a non-profit that administers the benefits and protections, to ensure that the con to ensure and protections, a non-profit that administers the benefits ofinstead worker the on focused administra the maximizing stays capital tributed should unions be a strong union presence, in jurisdictions that have profit? Or, tor’s Ultimately, policymakers will determine what guard rails to put on what such an in an such what on put to rails guard what determine will policymakers Ultimately, be body a such should example, For be. might administrator third-party dependent PORTABLE BENEFITS RESOURCE GUIDE PAGE 25 A poll commissioned by on-demand firm Handy found 72% of New York voters would support “changing the law to enable independent contractors to have access to benefits like worker’s compensation, disability and health insurance.” ------
A poll commissioned A primarily retirement and health care. In a retirement and health care. primarily — found 72% of New York voters would support support would voters 72% of found York New 30 W-2 environment, many of many environment, these contributions can be made pre-tax or as tax W-2 some kinds of while benefits workers, on-demand economy For advantaged. independently can be tax deductible, (health care and disability insurance) In a traditional employee-employer relationship, workers contribute to their workers relationship, In a traditional employee-employer varying levels at benefits own “changing the law to enable independent contractors to have access to ben contractors to have to enable independent the law “changing In some compensation, disability and health insurance.” workers’ efits like 2.5% as riders are charged is also set up this way, the Black Car Fund ways contribution. of and not a voluntary ride — although it is a direct fee every the cost of the healthcare requirement for many under the ACA, as employ the cost ofACA, under the many healthcare requirement for the the costs ofers are required to cover at least 60% of a bronze health care Opinion research $250 per month nationally. roughly averages plan, which portable benefits. for political support has also shown on-demand firm Handy by untarily contribute $1.00 per ride to their driver’s benefits. Fifty-five per Fifty-five benefits. per ride to their driver’s contribute $1.00 untarily could lead that rides per hour, 2.5 Assuming cent of said yes. respondents drives who contribution ofto a monthly driver a “full-time” about $220 for As a point of exceed 40 hours per week. would this contribution reference, There’s some reason to believe that consumers of that consumers some reason to believe economy the on-demand There’s of In Sum the wellbeing to support be willing to pay the providers. would ridesharing customers if 100 recent asked vol mer 2015, Peers would they Taking this concept to its logical extreme, some have even called for doing called for even some have this concept to its logical extreme, Taking and establishing individual entirely system with the employer-based away much equally, and workers income providers into by accounts that are paid Security. Social like opt-in. Therefore as a possible incentive to encourage the companies to the to encourage as a possible incentive opt-in. Therefore compa platform suggested have some system, participate in an optional such benefits under that funding portable worker nies could be guaranteed classification rulings. as a factor in employment be exempt a model would protection fund. This could also be done on the basis of time worked, or by basis of also be done on the fund. This could protection or worked, time rather than optional If pro rata measure. some other were a system such of then the question employ affect participation would how mandatory, to companies for many be a disincentive would likely ment classification dollar paid to a worker, a defined percentage is paid into a benefits and benefits into a is paid percentage a defined a worker, paid to dollar WORKERS CONSUMERS
Handy. “New Yorkers Say: Flexible Economy Companies Empower Workers.” 21 April 2016. “New Yorkers Handy. Web. http://blog.handy.com/nypoll-2/ Web. 30
PORTABLE BENEFITS RESOURCE GUIDE PAGE 26 the challenges that exist today. The status quo is that the individual worker opts in and bears all the costs. Policy is not needed for this, but extra income why is, and that’s many argue that a system where individual workers opt in and also cover the costs would not likely work – or would at least not solve - - - - -
either partial or full. either partial and one that has big implications on — (an incremental increase in the sales tax). This option is quite similar to the This in the sales tax). (an incremental increase slight — a more broadly be applied could the fee although Black Car Fund, example. on ridesharing, for rather than a per-use fee increase in sales tax Revenue to support a portable benefits model could also be generated generated could also be a portable benefits model to support Revenue Healthy similar to what fee, generalized through a new through taxpayers added to certain kinds of be only fee could The San Francisco created. prod across the board or platforms) online on-demand ucts and services (only models include a worker contribution contribution a worker models include purchasing benefits can be prohibitively expensive. Some portable benefits portable Some expensive. be prohibitively can benefits purchasing A NEW MANDATORY FEE FEE MANDATORY NEW A TAXPAYERS / GOVERNMENT THROUGH GOVERNMENT / TAXPAYERS
With respect to the nature ofWith participation, the status quo is that the in worker As mentioned elsewhere, some argue for a system that would allow companies or allow that would a system some argue for As mentioned elsewhere,
lection resulting in higher prices and fewer likely participants. likely in higher prices and fewer lection resulting cover the costs would not likely work — or would at least not solve the challenges the challenges at least not solve — or would work not likely the costs would cover risk se in adverse could result system an opt-in only Furthermore, today. that exist or the Stride Health or Peers model. Policy is not needed for this, but extra income is, income is, but extra this, is not needed for model. Policy or Peers or the Stride Health opt in and also workers individual where argue that a system many why and that’s would require new legislation. require new would model, Union Freelancers the with as costs, the all bears and in opts worker dividual playing field for companies experimenting with new business models by subjecting by business models experimenting with new for companies field playing them all to the same set of Either approach — mandatory or opt-in — expectations. tion without creating undue burden for contributors. Others argue that it makes far argue that it makes Others contributors. tion without creating undue burden for the level to as so contribution third-party other or company mandate to sense more payments toward portable benefits in exchange for certainty in their employment employment their in certainty for exchange in benefits portable toward payments experimenta advantage for market classification. This approach has the of allowing other third-party contributors to opt into an arrangement where they are providing providing are they where arrangement to opt into an contributors other third-party and optional for workers depending on a range of factors, such as whether they have have of they depending on a range as whether such workers factors, and optional for of source other or spouse a through care) health (like to benefits access employment? ty contributors), and second, would participation be mandatory for workers? And be mandatoryparticipation workers? for would second, and contributors), ty contributions are mandatory from companies where work, system could a hybrid THIS IS AN IMPORTANT QUESTION IN THE DEBATE, THIS IS AN IMPORTANT two sides to this There are for businesses. field playing the risk pools and the level third-par other mandatory (or be companies contributions for would first, question: IS IT MANDATORY?
PORTABLE BENEFITS RESOURCE GUIDE PAGE 27
------
that’s capturing the headlines right now, it’s it’s now, right headlines the capturing that’s or the “freelance economy” that has worked out worked that has economy” or the “freelance 31 “patchwork economy” “patchwork
the advances in payment processing, this seems solvable. processing, this seems solvable. in payment the advances work done, from care giving to freelance writing to plumbing, and regard to freelance writing to plumbing, from care giving done, work would Technology less of sourced online or offline. was the work whether to pay hire other individuals who individuals for easy it very need to make but given for their serviceinto the portable benefits accounts providers, services like Thumbtack or Craigslist where the platform’s business model business platform’s the where Craigslist or Thumbtack serviceslike parties). two in the financial transaction between does not entail intervening legislation could encompass all non-traditional wider, Casting the net even come through online platforms, essentially creating policy clarity on what creating policy clarity on what essentially come through online platforms, of the purpose for a platform example, (for platform an online constitutes a policy of as part of type could be one that collects fees this a peer-to-peer matching exclude explicitly policy could as Instacart or Lyft; transaction, such ride-share drivers, all building contractors, or all homecare workers – in a workers or all homecare all building contractors, drivers, ride-share approach. manner similar to the Black Car Fund earn in who legislation could encompass all workers Broadening further, workers. a particular industry across as all – such all workers One could legislate for In this model, workers who meet a minimum criteria on an individual plat an individual meet a minimum criteria on who In this model, workers per week) 5 hours than more drive who Uber drivers all example, (for form for protections benefits and contributions to support could be eligible for INDIVIDUAL PLATFORM INDIVIDUAL ALL NON-TRADITIONAL WORKERS NON-TRADITIONAL ALL PLATFORMS SPECIFIC INDUSTRY SPECIFIC WORKERS WORKERS THROUGH AN
Mark Schmitt and Shayna Strom define the “patchwork economy” as “a patchwork of jobs and a patchwork of pro Mark Schmitt and Shayna Strom define the “patchwork economy” as “a patchwork of jobs and a patchwork various ways.” Century Foundation and New Amer Schmitt, Mark and Strom, Shayna. “Protecting Workers in a Patchwork Economy.” ica. 6 April 2016. https://tcf.org/content/report/protecting-workers-patchwork-economy/ tections—encompassing gig workers and non-gig workers alike, all of whom struggle with gaps in the safety net in tections—encompassing gig workers and non-gig workers alike, all of whom struggle with gaps in the safety 31
Here’s the pyramid of the pyramid about thinking could consider when policymakers eligibility Here’s policy: portable benefits the broader the broader for decades. side of protections, and the related benefits and traditional employment, WHILE IT’S THE ON-DEMAND ECONOMY THE ON-DEMAND WHILE IT’S WHO IS ELIGIBLE? WHO PORTABLE BENEFITS RESOURCE GUIDE PAGE 28 - where worker resides vs. where service deliv where vs. resides worker where — ery takes place, with a solution for work initiating in one geography and in one geography initiating work with a solution for place, ery takes concluding in another Hours worked per week per week worked Hours Income strata Geographic boundaries Broadening out the furthest would be to establish a new system that has all system to establish a new be would out the furthest Broadening the accounts of into regardless ofpay classification, employee employers, percentage. based on a pre-determined work those who ALL WORK ALL
Other eligibility considerations could include: could eligibilityOther considerations
PORTABLE BENEFITS RESOURCE GUIDE PAGE 29 - - -
platform/app) out ance company) lancers Union, insurance co-ops or fraternal organization) worker center) part-time example, those in a particular field or those an online who connect with work through Only those who opt-in or choose not to opt- worker organizations) example, Free party (for third Nonprofit (for example, union or organization Worker All workers (universal) All contingent workers including standard Only a subsection of 1099 workers (for External parties (for example, foundations or External parties (for example, foundations or party (for example, insur Private sector third • All eligible workers • • Federal • State • Local • • • Government • • • All 1099 workers • • Employers/companies/other wage providers • Government / taxpayers • Workers • • Customers (for example, Uber passengers) • Mandatory • Default opt-out, optional opt-in • Default opt-in, optional opt-out • DESIGN OPTIONS unem retirement, Examples: health care, compensation, ployment insurance, workers’ tax withholding, liability paid leave, overtime, paid sick days or insurance, disability insurance, etc. vacation days, skills training, 32
32 bid. At what level of government will benefits be mandated and/or regulated? Who will receive the benefits? Who will receive Who would be eligible for portable benefits? Who will administer the benefits? How will the funding be structured? Who will fund the benefits? What benefits or protections What benefits or protections encompassed? are KEY DESIGN QUESTIONS Adapted from Strom/Schmitt Strom/Schmitt from Adapted PORTABLE BENEFITS PORTABLE CHECKLIST PORTABLE BENEFITS RESOURCE GUIDE PAGE 30 We believe that We cities or states should work to adopt new policy that will creatively inform a future federal change. Cities and states certainly the are laboratory of and democracy, that is particularly true as it pertains to building a new social safety net. - -
and most likely through Congressional and most likely — there is a clear preference among most of there is a clear preference the parties
for developing and implementing a portable benefits model and implementing developing for
and the ongoing controversies with on-demand companies at controversies and the ongoing
there are many questions to resolve about how to best design a por about how resolve questions to there are many —
How Do We Start We Do How Progress? Making
5 be the best route to better understanding the policy challenges and market impacts. impacts. and market be the best route to better understanding the policy challenges protections, and benefits Ifprovides that system a support to willing are companies AS NOTED ABOVE, NOTED AS yet the acute needs of - away years federal action likely With table benefits program. may ideas at the state or local level - piloting new here today non-traditional workers INNOVATION ZONES) INNOVATION PROJECTS (BENEFIT CITY OR STATE PILOT CITY OR STATE to building a new social safety net. social safety to building a new adopt new policy that will creatively inform a future federal change. Cities and states change. future federal a inform will creatively policy that adopt new true as it pertains that is particularly and the laboratory ofare certainly democracy, the local level only makes federal resolve to tackle this important issue all the more to tackle this important issue resolve federal makes only the local level work to should or states that cities we believe Therefore, in the near-term. unlikely to reimagine or reform the social safety net would be extremely difficult in today’s difficult in today’s be extremely net would the social safety to reimagine or reform political climate tions, even a statewide answer would still leave unanswered questions with the IRS, with the IRS, questions unanswered still leave would answer a statewide even tions, legislation federal However, Department of stakeholders. and other federal Labor, involved for resolution at the federal level level resolution at the federal for involved jurisdic with overlapping the number of and agencies rules, action. Given statutes, FROM A POLICY PERSPECTIVE, REFORM LEGISLATION — and how would a policymaker or coalition get started? or coalition get a policymaker would — and how NET SOCIAL SAFETY FEDERAL WHAT ARE THE OPTIONS ARE WHAT PORTABLE BENEFITS RESOURCE GUIDE PAGE 31 ------and federal and federal — without affecting the without affecting — with care taken to con with care taken — whether they be city statutes in home they whether — “innovation zones” “innovation — Time limited? (perhaps 36-48 months) Time or state level county, limited? (city, Regionally ofsider issues metropolitan areas that cross jurisdictional boundaries) (number of by? utilization What metrics will the pilot be judged enrollees, of etc.) randomized control trials, benefits,
Employment law exists at the Federal, state, and local levels, and is administered and is administered and local levels, state, Federal, at the exists law Employment One idea is to create and pilot “Benefit Innovation Zones” that would allow for allow would Zones” that and pilot “Benefit Innovation One idea is to create
workers to trade employment protections for social protections. A number ofA social protections. protections for key to trade employment workers need to be considered in addition to the checklist articulated above: questions would nies, it would significantly reduce concerns. However, it is crucial that ‘benefit in However, reduce concerns. significantly it would nies, nor force laws, state or local employment zones’ do not undermine federal, novation pening at the state level and relates to state wage and hour laws, so while reprieve at reprieve so while and hour laws, relates to state wage and pening at the state level for compa classification issues not eliminate all employment would the state level administrative guidance could lower risk enough to encourage companies to engage to engage companies encourage to enough risk could lower guidance administrative of majority the vast companies is hap litigation against Further, in experimentation. sible that a combination of local legislation or some combination in non-home rule states, state laws rule states, and regulated differently across the country. While only a federal law that pre-empts federal law a While only the country. across and regulated differently consistency and clarity of a perfect pos it is provide state and local rules would rules, with provision of benefits specifically. Without a mandate, it may be challenging to it Without a mandate, of with provision specifically. benefits participate if companies to fully convince the litigation risk remains significant. companies from federal litigation and regulatory risk associated with all W-2 / 1099 litigation and regulatorycompanies from federal risk associated with all W-2 the risk associated would rather seek to reduce or remove but classification issues, to their workers in pilot cities or states to their workers shield to seek not would a policy Such ofclassification employment workers. those other non-platform employers of pro with experiment to employers workers) non-traditional other non-platform workplace protections other training, and/or into benefit packages, viding or paying experimentation with different benefit and protection models. A local jurisdiction A local models. protection and benefit different with experimentation companies (and potentially on-demand economy to legislate and allow need would benefits. benefits. we should make it easier for them to do so. Pilot programs will help policymakers see will help policymakers Pilot programs to do so. them it easier for should make we and willing to provide, companies are what need, workers what might work, what the administer and support to formed to be need might intermediaries other what PORTABLE BENEFITS RESOURCE GUIDE PAGE 32 Building on the Department of $100 Labor’s million proposal to fund state-level pilots in portable benefits, we of believe a Future Community Work Challenge could be an important catalyst for the next creating social safety net the ideas from bottom up. - - - - - the grants — mentioned earlier in
33 agree that change is unlikely to happen is unlikely agree that change develop a unique solution that would provide provide would that solution a unique develop —
if chosen — “Common Ground For Independent Workers” letter Independent Workers” Ground For “Common would provide launch and early expansion capital. expansion launch and early provide would In this scenario, communities would need to fund startup costs themselves need to fund startup costs themselves communities would In this scenario, to launch (build the coalition and the model) and be ready In this scenario, the grants would include enough resources to do every the grants would In this scenario, net thing up until implementation: planning, building local stakeholders launch. on model, and preparation for economic analysis work, PROTECTIONS CAL SUPPORT CAL FUNDING INITIAL PILOT BENEFITS AND AND BENEFITS PILOT INITIAL FUNDING FUNDING IDEA GENERATION AND POLITI AND GENERATION IDEA FUNDING
The Challenge would be designed for cities, counties, or states to build multi-sector build to states or counties, cities, for designed be would Challenge The
work.” Medium. 10 November 2015. https://medium.com/the-wtf-economy/common-ground-for-independent-workers-83f3fbcf548f#.vydh2a12i Web. “Common ground for independent workers: Principles for delivering a stable and flexible safety net for all types of “Common ground for independent workers: Principles for delivering a stable and flexible safety net for 33
to pilot a new social safety net. Depending on the resources and the ambition, the ambition, the and the resources on Depending net. safety social new a pilot to could include: Challenge this paper. With $3-5 million in philanthropic support, we believe the Challenge could the Challenge believe we $3-5 million in philanthropic support, With this paper. ideas and implementing their innovative 5 cities or states with developing support originate from a set of principles outlined in a November 2015 letter from 40 leaders originate from a set of principles outlined in a November called the a safety net for non-traditional workers, one that maintains flexibility with stabili one that maintains flexibility non-traditional workers, net for a safety These criteria jobs. and portability between ty and enables multiple income streams teams to propose and Challenge could be an important catalyst for creating the next social safety net ideas social safety creating the next for could be an important catalyst Challenge from the bottom up. workable solutions. But getting started in any individual jurisdiction can be daunt individual started in any But getting solutions. workable Building on the Department ofing and challenging. $100 million proposal to Labor’s Work Community Future of a we believe pilots in portable benefits, fund state-level MOST SUPPORTERS OF PORTABLE BENEFITS PORTABLE OF SUPPORTERS MOST and help create local action can seed innovation but that level, at the federal quickly CHALLENGE BENEFITS INNOVATION BENEFITS CREATING A PORTABLE CREATING PORTABLE BENEFITS RESOURCE GUIDE PAGE 33
it — — Rather than a creating separate benefits organization especially for a pilot project may be feasible to work with the Union, Freelancers Peers, Stride Health, or another organization to manage the accounts and administration of a pilot. - especially especially —
would a pilot include enough would —
are moving more directly into the portable benefits more directly are moving policymakers and thought leaders at the city and state and thought leaders policymakers although it remains a narrow set of although it remains a narrow when compared benefits
it may be feasible to work with the Freelancers Union, Peers, Freelancers Union, Peers, with the to work be feasible it may — —
have each pilot community separately develop a platform, the Challenge the Challenge platform, a develop each pilot community separately have fund a shared set of could awards infrastructure. technology All ofreliance on share a common benefits models the future portable between the relationship that mediates platform a technology developing etc.), employer, funder (worker, (non-traditional workers), customer than Rather etc.). company, (insurance and the benefits administrator FUND TECH AND INFRASTRUCTURE AND TECH FUND
A PILOT SEVERAL YEARS, OVER THE PAST INITIAL STEPS SHORT OF INITIAL STEPS SHORT AND MORE INPUT: MORE INFORMATION as a labor union — that already has experience administering benefits for a worker worker for a administering benefits has experience as a labor union — that already scale here is likely challenge population. The biggest for a partnership? feasible it financially potential account holders to make Stride Health, or another organization to manage the accounts and administration of organization to manage or another Stride Health, organization — such worker with an existing option could be to work Another a pilot. ditional worker. Rather than creating a separate benefits organization than Rather ditional worker. a pilot project for and other benefits by the non-tra benefits and remains self-funded to traditional employer-employee local jurisdictions. Peers, Stride Health, and Freelancers Union each offer an entry and Freelancers Union each offer Health, Stride Peers, local jurisdictions. retirement health care and increasingly to access workers non-traditional point for SEVERAL FOR-PROFIT VENTURES partnership with state or and could present an interesting opportunity for market, EXISTING PROVIDER PARTNERSHIP WITH AN PARTNERSHIP PUBLIC-PRIVATE
PORTABLE BENEFITS RESOURCE GUIDE PAGE 34 The data on any particular city or remains region and the scarce best data is often held by the on- demand companies themselves. An important first step could be to initiate a local data process. - - - - - 35
“ambassador for the for “ambassador That said, the data on That said, the data 34
that is focused on how to support non-traditional work to support on how that is focused and named David Morris to the position in 2014. Morris and named David — 36
“Cities, the Sharing Economy, and What’s Next.” and What’s the Sharing Economy, “Cities,
self-employed” One step beyond the Advisory Council would be to create a position - part Council would Advisory the One step beyond time or full time ers in a particular jurisdiction. The UK established an broad range of stakeholders from labor, workers, worker advocates, com advocates, worker of workers, broad range from labor, stakeholders National League of The and other policymakers. Cities created a panies, a guide for Board” in 2014 that helped develop Advisory Economy “Sharing cities called A successful pilot project will require a robust discussion with key stake a robust discussion with key pilot project will require successful A initiating this discussion for One option holders within that community. a include would that Council” Advisory Work “Independent an create to is be to initiate a local data process. The Chiefbe to initiate a local data process. for the City ofEconomist San a member of by has been tasked example, his city council to for Francisco, the data particular to San Francisco. review variations in how independent work and freelancers are incorporated into and freelancers are work independent in how variations at dif sector is growing and that the on-demand each regional economy, cities. in different ways rates and in different ferent often held particular city or region remains scarce and the best data is any could step first important An themselves. companies on-demand the by Initial data work from sources such as JPMCI show that there are some that there are as JPMCI show from sources such Initial data work MARKET INDEPENDENT WORK OMBUDSMAN WORK INDEPENDENT ADVISORY COUNCIL ADVISORY DATA ANALYSIS AND UNDERSTANDING THE THE UNDERSTANDING AND ANALYSIS DATA
Web. http://www.thisismoney.co.uk/money/smallbusiness/article-2845393/David-Morris-MP-tsar-freelancers-ap Web. pointed.html Mail on Sunday, “David Morris MP becomes the first ever tsar for freelancers to be appointed.” 22 November 2014. Mail on Sunday, “David Morris MP becomes the first ever tsar for freelancers to be appointed.” 22 November Research at the National League of Cities. Nd. Research at the National League http://www.nlc.org/find-city-solutions/city-solutions-and-applied-research/sharing-economy Web. Hirshon, Lauren, et al. “Cities, the Sharing Economy, and What’s Next.” Center for City Solutions and Applied et al. “Cities, the Sharing Economy, and What’s Hirshon, Lauren, JP Morgan Chase Institute. “The Online Platform Economy: Who Earns the Most?” Insights, “The JP Morgan Chase Institute. Web. https://www.jpmorganchase.com/corporate/institute/institute-insights.htm#ope-most Web. 34 35 36
can begin to engage on these issues and their own markets: markets: and their own on these issues to engage can begin we believe pilot projects will provide the best opportunity to develop, test, and model test, to develop, best opportunity the provide pilot projects will believe we cities and states are a number of there how ideas for solutions, additional productive level have been engaging with on-demand companies and non-traditional workers workers non-traditional and companies with on-demand engaging been have level While and benefits. status, around regulatoryon questions employment permission, PORTABLE BENEFITS RESOURCE GUIDE PAGE 35 The challenge ahead will be to expand these guilds and associations to include not just multiple companies and multiple on- demand platforms, but additional categories of contingent workers beyond the on-demand economy. - - - -
is a long-standing trend, on-demand platforms are is a long-standing trend, on-demand platforms of resources to support possible pilot projects have been pro been of projects have possible pilot resources to support
ers beyond the on-demand economy. the on-demand economy. ers beyond just multiple companies (e.g. Lyft as well as Uber) and multiple on-demand platforms well as Uber) and multiple on-demand platforms as Lyft just multiple companies (e.g. of but additional categories work contingent and Instacart), Handy, Uber, Lyft, (e.g. could provide benefits and protections to specific classes of non-traditional workers. benefits and protections to specific classes could provide workers. of non-traditional expand these guilds and associations to include not will be to ahead The challenge that will represent Uber drivers. While these are preliminary steps, they will likely be will likely they While these are preliminary steps, that will represent Uber drivers. other cities to enable the creation of for a framework that an independent association agreeing to create a “Driver’s Association” in each state, and separately announced a and separately in each state, Association” agreeing to create a “Driver’s Guild” to create an “Independent Drivers York Union in New deal with the Machinists WHILE NON-TRADITIONAL WORK ofrate the accelerating ofrate the and change May and April In response. policy Massachusetts and in California settled class action lawsuits Uber tentatively 2016, MASSACHUSETTS) YORK, CALIFORNIA AND AND YORK, CALIFORNIA WITH UBER IN NEW NEW WITH UBER IN ON EARLY MODELS / / MODELS ON EARLY (IN PARTICULAR SETTLEMENTS DESIGN POLICY BASED BASED DESIGN POLICY ensure at least some ofensure pilots. resources are dedicated to supporting these ers, these resources may not survive the Congressional budget process — but bipartisan the Congressional budget not survive these resources may ers, could help and stakeholders policymakers and other Mayors, from Governors, support fits. These funds would likely create significant momentum toward pilots on the ground, significant momentum create would likely These funds fits. group of from a diverse Absent support local action. stakehold for as catalysts and serve posed through the President’s budget request for the 2017 fiscal year — a $100 millionyear the 2017 fiscal request for budget President’s posed through the Department ofgrant fund from the from the Federal Labor and a $5 million grant fund portable bene for pilot projects state-level to fund Services Conciliation and Mediation THE LARGEST BUCKETS EXPERIMENTS PUBLIC EFFORTS FOR EFFORTS PUBLIC MORE AND PILOTS ADVOCACY TO SUPPORT TO ADVOCACY PORTABLE BENEFITS RESOURCE GUIDE PAGE 36 -
of must the questions policymakers Conclusion
The future of work is coming fast, and it’s more imperative than ever to think to think ever than more imperative The future of coming fast, and it’s work is 6 thinking policymakers to take us into the 21st century. 21st century. us into the to take thinking policymakers around factories — or even traditional companies as we know it. The political will know traditional companies as we around factories — or even forward these with to work prepared is constituency a cross-sector and growing, is we as a nation created new standards of work when we moved from the fields into from the fields into moved of standards created new as a nation we when we work built of kind a future with a new prepare for that isn’t so must we work the factory, about social policy that protects workers and society as employment changes. Just as Just changes. employment as society and workers protects that policy social about ture of Work Initiative will gladly work with any city, state, or federal entity that is entity or federal state, city, with any work will gladly Initiative ture of Work models. with these interested in experimenting WE HOPE THIS BRIEF HISTORY AND OVERVIEW HISTORY WE HOPE THIS BRIEF Fu Institute Aspen The portable benefits is helpful. considering grapple with when PORTABLE BENEFITS RESOURCE GUIDE PAGE 37 ------
GREG NELSON GREG Greg spent six years at the Obama White House as at the Obama White House Greg spent six years energy, clean economic policy, the in leader senior a Fellow, Aspen Institute Future of Work Initiative of Future Institute Aspen Work Fellow, ChiefFormer to the of Assistant Special Staff, Advisor and Senior President, House Council, The White Economic National LIBBY REDER LIBBY Visa across sectors has worked Libby 15 years, the past For collab progress through multi-stakeholder to drive Lib an independent consultant, oration. Currently Fellow, Aspen Institute Future of Work Initiative of Future Aspen Institute Work Fellow, and eBay leader, responsibility corporate Former , Crowd Companies, Institute for the Future and Yerdle. Yerdle. and the Future Institute for Companies, , Crowd
Libby worked for eight years in leadership roles in Corporate Responsibility, Sustain in leadership roles in Corporate Responsibility, eight years for worked Libby
ability and Corporate Reputation at eBay Inc. and Visa Inc. In her first career chapter, In her first career chapter, Inc. Visa Inc. and at eBay ability and Corporate Reputation development with a focus on the sharing/on-demand economy. Clients have included Clients have economy. on the sharing/on-demand with a focus development Peers.org by advises a range of clients on strategy, marketing/communications and partnership marketing/communications of a range advises by strategy, clients on in energy and biomaterials, and consulted for businesses, nonprofits, and founda and nonprofits, businesses, for and consulted in energy and biomaterials, University. Yale science and history in political from holds a BA He tions. deputy director of the President’s Council on Jobs and Competitiveness. Prior to the Competitiveness. and deputy director of on Jobs Council the President’s startups developed a technology company, Greg helped build and sell White House, preneurship, and startups. Greg was also the chief also Greg was and startups. ofpreneurship, staffEconom National at the director ofand the deputy director Gene Sperling, ic Council for House the White including as Office partnerships, focused on public-private Engagement of Public Greg’s policy portfolio included international trade, economic policy, and US par economic policy, included international trade, policy portfolio Greg’s entre clean energy, technology policy, infrastructure, ticipation in the G7 and G20, technology, and strategic partnerships teams. During his tenure at the White House, his tenure at the White House, During and strategic partnerships teams. technology, About About Authors the PORTABLE BENEFITS RESOURCE GUIDE PAGE 38 - - - - -
NATALIE FOSTER NATALIE Institute for the Future for Institute on the future ofexpert is an Natalie work an She is currently and the gig economy. Fellow, Aspen Institute Future of Future Institute Aspen Fellow, Initiative Work and California America New Fellow, Natalie built the first digital department at the Sierra Club and served as built the first digital department at the Sierra Club and served Natalie Previously, Natalie served as digital director for President Obama’s Orga President Obama’s as digital director for served Natalie Previously, Natalie co-founded and launched Peers.org to support people who work work people who to support launched Peers.org and co-founded Natalie dine University. the deputy organizing director for MoveOn.org. She holds a BA from Pepper She holds a BA MoveOn.org. the deputy organizing director for ing through social, mobile, and email communication with the President’s the President’s and email communication with ing through social, mobile, millions of supporters. nizing for America (OFA) and the Democratic National Committee. She built Committee. and the Democratic National America (OFA) nizing for and fundrais message the president’s and directed the team responsible for change, with Van Jones. Van with change, in the sharing and on-demand economy. Prior to Peers, she was the CEO and she was Prior to Peers, in the sharing and on-demand economy. economic of co-founder people–driven for a platform the Dream, Rebuild ica California. advisor to the The Aspen Institute Future of Work Initiative and the Open So and the Open Work Initiative Future of Aspen Institute to the The advisor Amer and New the Future at Institute for and is a fellow ciety Foundations, School ofSchool Business. Subcommittee on Antitrust. She holds a BA in Government from Dartmouth from Government in BA She holds a Antitrust. on Subcommittee of Haas University from the at Berkeley California and an MBA College Libby spent four years with the United States Senate Judiciary Committee, Committee, Judiciary Senate the United States with years spent four Libby PORTABLE BENEFITS RESOURCE GUIDE PAGE 39 - www.aspeninstitute.org. the Wye River on Maryland’s Eastern Shore. It also has offices in New York New in has offices also It Shore. Eastern Maryland’s on River Wye the visit more information, ofCity and an international network For partners. during values and to provide a nonpartisan venue for dealing with critical with dealing for venue a nonpartisan to provide and values during and on Aspen, Colorado; DC; Washington, based in The Institute is issues. The Aspen Institute is an educational and policy studies organization Institute is an educational and policy Aspen The leadership based on en Its mission is to foster DC. based in Washington,