Until recently, persons who were self-employed or only worked on a freelance basis were relative rarities in our economy. Today, however, it is estimated that nearly 33% of the United States labor force are engaged in temporary, contract-based, or on-demand work. These members of the so-called “gig” economy have posed a number of new challenges to the companies that rely on their labor, and a new bill in the Senate aims to study this relatively new labor model.
The Portable Benefits for Independent Workers Pilot Program Act is set up to spend $20 million in the form of grants to states, local governments, and non-profits that are willing to design and implement new models or assess and improve existing models of portable benefits for workers in these types of occupations.
While individual employers are not eligible to receive direct compensation or grant money from the bill, they can choose how they will react to local governments and non-profits looking to partner with companies in order to conduct studies. Grant money will be given out to study a wide array of portable benefits including retirement savings, workers’ compensation insurance, life insurance, disability insurance, sick leave, educational benefits, and healthcare.
What does this mean for my company?
It’s important to note that this bill has not yet been passed into law, although there are several reports that it receives support from both major political parties. Nonetheless, the relatively small amount of funding will most likely mean that most of the studies that are funded will be done on a small-scale. It is entirely possible that most companies will not be affected at all by this new law.
It’s also important to note that the purpose of this bill is only to gather information; it cannot force companies to offer benefits or additional compensation to its temporary staff. All it is allowing local governments and non-profits to do is conduct studies and introduce trial programs.
For many companies that rely on temporary, contract, and/or freelance labor, the bigger problem to solve is whether or not they should participate in one of these pilot programs or studies that will be introduced with the help of this grant money. While there is bound to be a lot of variance between programs (the purpose of the bill is to explore new options), there are a few questions that employers should ask before jumping into one of these programs.
- What benefit is there to participating? Ideally, companies will want to participate in these programs because they perceive a benefit for their employees. That benefit, in turn, will provide them with a more productive and capable workforce. It’s crucial, however, to ensure that the benefits being offered by these programs are truly of use to your company’s temporary workers. Keep communication between your temporary workers and your HR department open so that your staff can tell you what they’re looking for out of their job.
- Do my employees see a benefit to participating? The benefits offered in some of these programs may be of little interest to your workers. In other cases, it may be possible that they have found better deals on the services offered on their own. If participation in the plan is mandatory and your staff finds themselves losing money for benefits they neither want nor need, they’ll look for other work.
- How is the data collected being shared? Participating in an experimental program always carries risks, but your company data should not be compromised. Insist on getting any agreements relating to employee or company financial data in writing, and ask a lot of questions about how employee personal data will be used and shared.
- Can benefits be varied? Just like your full-time staff, odds are your offer different compensation packages to each member of your temporary staff. If the pilot programs in your area only offer a one-size-fits-all solution to your employee benefits, think carefully before jumping to participate.
The Portable Benefits for Independent Workers Pilot Program Act has the potential to generate some very useful data and new ideas for companies to use when implementing benefit programs for their temporary staff. Even if this bill does not pass the Senate, it’s still important for companies that rely on temporary workforces to offer a benefits package that is in line with their competition. If you’re looking for assistance in staffing your temporary workers, call the professionals at ICS.