In the United States, many social protections such as health insurance and unemployment benefits have traditionally been tied to an employment model that is changing rapidly. Work full-time at a white-collar job, and you will likely be offered health insurance, worker’s comp, and paid vacation (although there’s still no federal law mandating employers offer vacation to their employees). Work a part-time job or string together gigs through apps, as more Americans are doing, and there’s likely no safety net for you.
Some cities and states are working toward implementing “portable benefits” solutions aimed at bridging these gaps. Rather than being attached to a particular job, portable benefits would follow the worker. As a result, workers could accrue benefits such as unemployment insurance, workers’ compensation protection and paid time off even working with different employers or on different projects.
State legislators in Washington have reintroduced a bill that would establish a portable benefits fund for workers not classified as employees who do work for the public (think Uber drivers, Taskrabbit errand-runners, and housecleaners working through an agency). Companies would have to pay a fee of five percent of the total collected from consumers, or $1 per hour, whichever is less, and pay that money into a benefits fund for health insurance, retirement savings, and paid vacation.
The bill, if passed, would follow on Seattle’s Domestic Workers’ Bill of Rights, which passed last year. Seattle was the first city to pass such a bill, following on the heels of eight states: California, Connecticut, Hawaii, Illinois, Massachusetts, New York, Nevada and Oregon. The legislation established labor rights for people providing housecleaning services, ensuring they receive the city’s minimum wage of $15 per hour and a rest break every four hours, among other protections. The protections apply to people doing this work whether they work for a traditional employer, or as an independent contractor.
The bill also prompted the creation of a Domestic Work Standards Board.
“We heard repeated requests from workers and also from the hiring entities” for advice, says Seattle City Councilor Teresa Mosqueda, who sponsored the bill. “How would one go about contributing to a retirement account, a paid-time off account, a worker disability/medical leave account?” Mosqueda acknowledges that recreating systems that have traditionally been operated at a state or federal level presented challenges. As a result, the 13-person Domestic Workers’ Standards Board has been charged with developing strategies to address these questions. “This table is an ongoing forum for both the worker voice to be at the table and the hiring entity to be at the table, and collectively, they’re going to come back to us with recommendations on paid medical leave, paid time off, short-term disability, and ideally, retirement and security,” says Mosqueda.
The benefits couldn’t come soon enough. A report from the Seattle Domestic Workers’ Alliance found that 81 percent of domestic workers surveyed would classify as very-low wage. 85 percent of the domestic workers in Seattle didn’t receive any compensation for on-the-job injuries while more than half did not receive overtime pay.
Portable benefits policies could get a national boost if domestic work legislation that Senator Kamala Harris is proposing gains traction. The bill would include the protections outlined in Seattle as well as call for paid sick days and retirement savings.
In the meantime, the National Domestic Workers’ Alliance has launched an online platform, Alia, to provide domestic workers with paid benefits. The platform enables clients to make a voluntary contribution to a domestic worker’s account, which they can then choose how to use, for example as paid time off or to save as accident insurance.
“As an expansion of our strategies, we began to conceptualize entrepreneurial and market-based strategies that can address entrenched and historic challenges around the respect and dignity that domestic workers deserve,” says Palak Shah, founding director of the alliance’s “innovation arm,” the NDWA Labs.
Car service drivers, including black-car drivers and drivers working for Uber or Lyft, have also often been left out of benefit schemes. But not in New York — at least not entirely. In 1999, New York State’s legislature created the Black Car Fund to provide workers’ compensation to independent drivers working for car services. Although the fund covers the entire state, the fund’s site notes that 98 percent of Wolits members are based in the New York City metro area. To qualify, drivers must drive for car services that own half or fewer of the cars in their fleet and at least 90 percent of the business must be conducted on a non-cash basis. The fund covers more than 130,000 affiliated drivers.
Ira Goldstein, executive director of the fund, explained that when ride-hailing apps Uber and Lyft appeared in New York City, the city decided to regulate them as black cars. As a result, Uber and Lyft were required to join the Black Car Fund. All dispatched rides in New York City performed by black-car services — which includes Uber and Lyft — include a 2.5 percent surcharge, remitted monthly to the Fund.
“The drivers, as independent contractors, can work for multiple dispatchers. So, a driver, in the course of a day might do a couple of trips for Lyft, might do a couple of trips for Uber, might work for a traditional black-car base, and as long as he is [driving for a dispatched ride], he’s covered for all of those trips,” Goldstein says.
Goldstein says the fund has gotten attention from places outside of New York interested in replicating the model. Due to the high suicide rate among car-service and taxi drivers, Goldstein says the fund is now also providing some mental health benefits along with its other services.
He attributes part of the fund’s success to the fact that it is self-contained and underwrites its own losses.
“We became self-insured in 2007,” Goldstein explains. “We have all our own adjusters and support staff in house. We do everything in house, and we believe that’s led us to being able to keep our costs down. We’ve only had one fee increase in 18-19 years. We are here to serve the drivers,” Goldstein affirms.
It’s possible that half of all people in the workforce could be doing some kind of gig work by next year, either as a supplement to, or instead of, a full-time job. That statistic makes the conversation on portable benefits even more urgent, says Jennifer Wolf, executive director of the International Association of Industrial Accident Boards and Commissions.
The efforts aimed at developing portable benefits solutions, Wolf says, reflect a deeper question about how society provides social protections. “From our lens at my organization,” she says, “ it’s all about workers’ compensation protections and who’s responsible for health and safety and prevention activities and what happens when an illness or an injury or a fatality happens.”
“This is a conversation happening on the global stage,” she says. “Everyone loves to talk about the gig economy, but it’s really been happening much longer than that.”
Zoe Sullivan is a multimedia journalist and visual artist with experience on the U.S. Gulf Coast, Argentina, Brazil, and Kenya. Her radio work has appeared on outlets such as BBC, Marketplace, Radio France International, Free Speech Radio News and DW. Her writing has appeared on outlets such as The Guardian, Al Jazeera America and The Crisis.