My focus has been on creating a system to provide 20th century employment benefits (sick leave, vacation time, health insurance subsidies, workers compensation insurance, etc) to all sectors of the 21st Century workforce (part-time employees and independent contractors). In 2015, SEIU 775 President David Rolf and entrepreneur Nick Hanauer proposed the framework for such a system. While there has been little movement on the national level, bills have been introduced in Washington state to provide these benefits to “1099 employees.”
This piece from the Aspen Institute outlines a bill introduced this year:
The Stonier bill requires businesses to make contributions to “benefit providers” for the purpose of providing benefits to workers. The businesses covered in the bill include any entity that “facilitates the provision of services by workers to consumers seeking services and where the provision of services is taxed under 1099 status.”
Washington State’s Department of Labor and Industries would determine the amount to be collected for the provision of workers’ compensation. In addition to this amount, businesses must contribute an amount equal to 15 percent of the total fee collected from the consumer for each transaction of services provided, or two dollars for every hour that the worker provided services to the consumer, whichever is less. Contributions must be made monthly.
The benefit providers are required to provide workers’ compensation and, based on worker input, can provide a range of other benefits, including health insurance, paid time off and retirement benefits. Benefit providers are allowed to use up to 10 percent of contributed funds for administrative costs.
A similar bill was introduced last year, but this year’s bill contains additional language that would promote a greater understanding of the independent workforce by requiring eligible businesses to submit annual reports to the Washington State Department of Labor with specific data about the business, and it would reform the state’s misclassification laws.
This new bill not only has the endorsement of Rolf and Hanauer, but also Uber CEO Dara Khosrowshahi. I find that to be an encouraging step, as I would have expected the major players of the gig economy to resist something that would cut into their bottom line. I’ve seen in New York City that Uber invested a ton of resources to oppose bills that will cap their operations. It’s great to see that they somehow see this as beneficial to them.
I imagine this will be a major topic in the next two years, as a slew of potential Democratic presidential nominees will no doubt be working to craft forward-thinking economic messages and proposals.
Reading about this bill leaves me with two questions:
- Why does a bill such as this leave out pro-rated benefits for part-time “W-2 employers.” Does that add logistical complications, or would it face too much backlash from small-businesses.
- On a similar note, should the government in some way subsidize the contributions made by smaller employers? And if it did, where could/should that revenue be raised?
I am curious to hear your thoughts.