Portable Benefits for Growing Legion of Gig Workers a Possibility
Gig workers – like my colleagues and me at Mercer PeoplePro – are estimated to make up about 35% of the U.S. workforce, according to the annual report from Upwork and the Freelancers Union[i]. This flexible workforce – many of whom are highly skilled in their area of expertise – is loosely defined as independent workers who contract with organizations for short-term projects or temporary assignments.
Hiring gig workers can make a company more agile, giving it the ability to adapt and grow quickly, without taking on the ‘overhead’ associated with hiring permanent employees. It also can allow government and other organizations that have to follow an onerous procurement process to bypass the red tape.
Gig workers retain flexibility, but are generally responsible for their own professional development, getting new assignments and paying for their own benefits.
Legislation proposed by Senator Mark Warner (D-VA) and U.S. Rep. Suzan DelBene (D-WA) would test and evaluate innovative portable benefit designs for gig workers. The Portable Benefits for Independent Workers Pilot Program Act would provide $20 million for competitive grants to states, local governments, and nonprofits for pilot projects to design, implement, and evaluate new models or assess and improve existing benefit programs – including retirement savings, health care, workers’ compensation, income security and disability coverage – that allow workers to maintain benefits when changing jobs. In addition, some states and local governments, like Washington, New York and New Jersey, are trying to secure approvals for similar proposals.
Online platforms – like mercerpeoplepro.com – are driving the expansion of the so-called ‘gig economy’. Currently, there are roughly 4 million gig workers in the U.S., according to research from Intuit and Emergent. This research projects the numbers of gig workers to reach 7.7 million by 2020. The numbers of gig workers – and concern for their economic well-being – fueled the proposed legislation.
“Whether by choice or necessity, a growing number of Americans are working without a safety net and have difficulty planning and saving for retirement, health care needs, or on-the-job injuries. The nature of work is changing rapidly, but our policies largely remain tied to a 20th century model of traditional full-time employment,” Sen. Warner said. “As more and more Americans engage in part-time, contract or other alternative work arrangements, it’s increasingly important that we provide them with an ability to access more flexible, portable benefits that they can carry with them to multiple jobs across a day, a year, and even a career. These incentive grants will accelerate experimentation at the state and local levels to better support a more independent 21st century workforce.”
The bill has been introduced to the Senate and the House of Representatives, and would provide funding in 2018, with evaluation of the pilot program no later than September 30, 2020. Click here for the full text of S 1251.
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Written by Mercer PeoplePro Engagement & Communications Specialist, Lisa Jarmoszka
[i] Fast Company, January 5, 2017 “How the Gig Economy Will Change In 2017”