Workers Need Real Portable Benefits and Access to Foundational Employment Rights

Senator Bill Cassidy (R-LA) introduced the Unlocking Benefits for Independent Workers Act—a bill that threatens workers’ access to foundational employment rights and protections like the right to minimum wage and overtime pay, the right to a discrimination-free workplace, and the right to collectively bargain. At the same time, the bill does nothing to make benefits like health insurance and retirement plans more affordable for the millions of independent contractors that the bill purports to help.

The bill would prohibit considering a business’s offer of “a benefit or protection” to workers it hires as independent contractors when determining whether those workers are employees or independent contractors under federal law. But the provision of benefits is a relevant consideration and excluding this information tips the scales in favor of independent contractor status—harming workers who should be classified as employees. Workers who are classified as employees are already entitled to benefits and protections, including workers’ compensation, unemployment insurance, minimum wage and overtime, and health and safety protections.

When a business offers benefits to “independent contractors,” it suggests that these “independent contractors” are economically dependent on the hiring business and not running their own. It also suggests the hiring business has power and control over the workers. It is a red flag that such workers may be misclassified as independent contractors.

Uber, for example, classifies its ridehail and delivery drivers as “independent contractors,” denying them the benefits that Uber’s corporate employees are entitled to, including comprehensive health, life and disability insurance, paid sick and family leave, unemployment insurance, and workers’ compensation.[i]  At the same time, Uber uses algorithms and apps to surveil, discipline, and reward these so-called “independent” drivers and delivery workers in more exacting ways than any human boss could. Uber’s algorithms rate delivery workers’ performance and then reward highly-rated delivery workers with benefits-like perks, including discounts on dental and vision care.[ii] This bill would prevent these incentive structures from being considered as evidence that workers are improperly classified as independent contractors. It would require judges and regulators to ignore relevant information that sheds light on the relationship between businesses and their “independent contractors.”

“This bill threatens to create a slippery slope that will enable the growth of Uber’s business model—controlling workers through technological surveillance and algorithms while denying them employment rights and benefits,” said Laura Padin, Director of Work Structures at the National Employment Law Project. “It would degrade work quality in many occupations that are already underpaid, difficult, and have high rates of misclassification and other labor violations, including homecare, ridehail, delivery, landscaping, construction, and janitorial work. It is no coincidence that Black, immigrant, and other workers of color—who face discrimination and occupational segregation that limits their job opportunities—are overrepresented in these jobs.”

“The bill would do nothing to make real benefits—such as comprehensive health insurance and retirement plans—more affordable for legitimate independent contractors,” said Padin. NELP supports policies that create a good-jobs economy, including polices that would increase benefits for true independents contractors, like increasing the tax credits available to individuals buying health insurance on exchanges and increasing contribution limits for IRAs. Unlike the stingy delivery worker “benefits” programs designed by Uber that are mechanisms of control, these policies give independent contractors—not the hiring entities with which they contract—the ability to choose the programs and benefits structures that suit them. They would truly empower independent contractors as they build their businesses.

Endnotes

[i] Benefits at Uber, https://www.uber.com/us/en/careers/benefits/.

[ii] Uber Eats Rewards Program (describing one type of reward or perk as ”15% off dental and vision with Stride”),  https://www.uber.com/us/en/deliver/uber-pro/.