Even in a contentious election year, many Democrats and Republicans agree: earn money It's time for freelance and gig platforms to focus on innovative ideas to better capture this growing self-employed workforce.
Portable benefits, or benefits tied to workers rather than employers, are rapidly rising to the top of the bipartisan agenda.
In fact, the next president and Congress, whoever they are, will have a realistic early opportunity to help many workers.
Sen. Bill Cassidy (R-Louisiana) made headlines over the summer with speeches like this: Interest in portable benefit reform. Prior to this, in April, the House Education and Labor Committee held the following meetings: hearing About the idea. Some lawmakers are introducing bipartisan policies. Portable Benefits Pilot Program Bill. At the same time, there is unprecedented momentum at the state level. Utah and pennsylvania.
ofcore ideaDriving these reforms is the recognition that current policies force workers to choose between self-employment and access to common workplace benefits.
Half a century ago, long before anyone could choose self-employment with a few mouse clicks, tax incentives were created to encourage people to tie fringe benefits to traditional W-2 employment jobs. Measures were created. This unintentional policy is now reflected in labor laws that restrict the flow of benefits to nontraditional workers. For a long time, this wasn't a big problem because most workers were traditional employees. But now that things have changed, our laws ignore a large and growing sector of the workforce.
It doesn't have to be that way. What federal policymakers can do Equalize tax treatment between the self-employed and payroll workers, create flexible benefits and savings opportunities, and improve access to health benefits for the self-employed.
First, policymakers can limit self-employed workers' access to benefits by simply stating that federal agencies cannot use the presence or absence of benefits to determine whether a worker is an independent contractor or an employee. can be legalized. This results in Risks your organization currently faces: If you agree to provide benefits to contracted self-employed workers, you could be subject to high fees and fines for misclassification. These penalties also pose challenges for workers who wish to maintain contractual relationships with multiple organizations.
At the same time, Congress should give self-employed workers the same tax benefits as employees. This means allowing the self-employed to create a “cafeteria” plan similar to what employees do. Article 125 of tax law. In such a scenario, the self-employed would contribute their pre-tax income to a flexible benefits account, which could be used to make the same purchases as a traditional canteen plan. These include retirement savings, medical insurance, life insurance, disability insurance, childcare, and more.
Last but not least, we need to improve access to health benefits for the self-employed. This could include a range of options, from easing restrictions on mobile health savings accounts to legalizing association health insurance plans for the self-employed. One simple, bipartisan solution is to Health insurance reimbursement system for individual insurance Allow self-employed individuals to purchase health insurance with pre-tax dollars, whether in the private market or through the Affordable Care Act exchanges.
Some critics of portable benefits reform want to force traditional employment arrangements on independent workers, arguing that they would enjoy more complete traditional employee benefits and rights. are. but investigation rear investigation It shows that the majority of independent workers do not want to become W-2 employees.
For some of them, independent work is simply a supplementary source of income to meet their financial needs. Some people may require complete autonomy over their work schedule, sometimes for health or family reasons. Therefore, independent work is the only opportunity to earn an income.
In fact, reclassifying independent workers into the compulsory employment system is already backfiring. harming the same workers that supporters were trying to help. For example, in California, under Assembly Bill 5, the nation's toughest law against independent workers, overall employment and self-employment in affected occupations decreased significantly.
For many Americans, self-employment is beneficial, desirable, and even preferred, unless common benefits are not available at work. Both Republicans and Democrats like to position themselves as “pro-worker” parties. Both companies have a great opportunity here to serve a huge segment of the working public.
Riya ParagashviliHe is a senior fellow and director of the Labor Policy Project at George Mason University's Mercatus Center.Jonathan WolfsonHe is the Chief Legal Officer and Policy Director of the Cicero Institute. They arenew research“Flexible and Portable Benefits for Independent Workers: A Federal Policy Guide.”
