Congress Still Seeks Ways to Adapt to Gig Economy

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By Tyrone Richardson

The on-demand workforce continues to feed conversations about how the federal government should tweak employment tax laws and worker benefits to support them.

“When considering the share economy, it runs us up against 20th century labor laws and thought processes that don’t necessarily mesh with the changing realities of the 21st century workforce,” Rep. Tim Walberg (R-Mich.), chairman of the Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions, said Feb. 28. “Technological advances and demand for innovative and flexible workers” have made this “all the more clear.”

Walberg was one of the speakers Feb. 28 at a Washington, D.C., event titled “Advancing the Social Contract for Gig Economy Workers.” The panel discussion comes as lawmakers are considering changes to the system that classifies workers as either employees or independent contractors.

That includes options such as a new classification to cover workers who fall between the traditional employees entitled to a full range of protections and benefits and independent contractors treated as self-employed entrepreneurs.

The rise of an on-demand marketplace, including Uber, the ride-share company, has drawn questions about what defines an independent contractor. That classification would mean on-demand workers wouldn’t qualify for minimum wages, unemployment insurance and tax withholdings.

Benefits Follow Workers?

Lawmakers have been considering options such as portable benefits, which would provide heath insurance, unemployment insurance and retirement benefits as a worker moves from job to job.

Sen. Mark Warner (D-Va.) told the audience Feb. 28 that portable benefits is a concept to be considered, urging that the industries and local governments should also seek innovative ways to fill the voids.

“We are starting to see experimentation taking place. You’re seeing the Machinists union and Uber start down the path in some form of a portable benefit,” he said.

Gene Zaino, president of self-employed business service provider MBO Partners, agreed with the idea.

“I think the industries have to come up with solutions. I think the platform companies could come up with solutions since it’s not that hard,” Zaino told Bloomberg BNA after the event. “You can create an employment platform that gives these people access to the things they need.”

Tough to Define New Worker

Walberg cautioned the audience that defining an employee “is not as simple as it used to be.” He added that there will need to be more data to understand the contingent workforce.

“While other studies have been conducted, we are going to need better data and reliable statistics if we are going to implement some policy,” he said.

Walberg’s statement comes as the Labor Department is planning to add new questions to its contingent worker survey in May 2017. The survey data haven’t been updated since 2005.

Potential for changes could be supported by both sides of the aisle, since the issue “touches all types of people,” he said.

“Workers deserve serious and strong protections, a priority shared by both Republicans and Democrats,” Walberg said.

Zaino said the new data will bring “more attention” to the gig workplace and self-employed businesses. He added that solutions should be addressed on smaller scales, based on specific industries.

“This needs to be segmented more. Right now it’s a catch all, and in the independent contractor workforce there are many flavors of it,” but there are different solutions needed for different segments, he said.

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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