Is the Gig Economy Accelerating the Move to Portable Employee Benefits?
The workplace is changing. In fact, post-pandemic, it already has. A “wonky” article takes a deep dive at not only how to deal with today’s workplace, but how to get ahead of the competition.
“Flexible Benefits for a Flexible Workforce: Unleashing Portable Benefits Solutions for Independent Workers and the Gig Economy”—a policy brief from the Mercatus Center at George Mason University by Liya Palagashvili—examines systemic and structural changes required to incorporate the growing population of independent, freelance, and gig workers.
“Political leaders from left to right are grappling with how to approach the challenges caused by the rapid growth of an independent workforce,” writes Palagashvili.
She notes that independent workers are a diverse group, “found across a multitude of industries, skill levels, and educational attainment—for example, they can be freelance creatives or knowledge-work professionals, medium-skilled contractors, gig workers, high-skilled consultants, self-employed merchants or sellers, and entrepreneurs.”
However, she adds, employment laws are a long way behind today’s workplace reality. “Even as more and more Americans are choosing these flexible forms of work, laws written almost 100 years ago prohibit and discourage common workplace benefits from flowing to these workers.”
In other words, how can a modern, independent worker carry their benefits from job to job? To address this challenge of independent work, as well as other issues, she says there are two buckets of policy solutions:
Bucket 1: Reclassification, i.e., policies that reclassify workers as employees instead of independent contractors.
Bucket 2: Access to portable benefits, i.e., policies that allow independent workers to maintain their nontraditional work arrangements and improve their access to flexible benefits.
However, she says, regulators and policymakers are pursuing only reclassification as they grapple with a changed and changing workforce. After offering six reasons why reclassification is not the solution, she offers three principles for implementing a flexible/portable approach to employee benefits:
Principle 1: The program should be voluntary for all participants.
Principle 2: The program should allow contributions from a variety of sources: customers, organizations and businesses, and the workers themselves.
Principle 3: The program should facilitate the creation of portable accounts that are tied to the worker rather than to an employer.
Download the full policy brief, which goes into much greater detail on these issues, here.
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