New Bill Could End Misclassification of Independent Contractors
The Portable Benefits Act is which would make it less profitable for companies to misclassify employees. Employers who use 50 or more contractors in twelve consecutive months must contribute funds to a Qualified Benefit Provider. This would be the lesser of $0.25 for every dollar of consumer sales, or $6 per hour worked by each worker, prorated by minute.
Thus, it may be cheaper to go ahead and hire whoever they want to use full time. Or, depending on the number of independent contractors used, it may be less expensive to classify them correctly than it would be to inflate the numbers.
Portable benefits could also open up new protections for the over 127,000 temporary workers in New Jersey. Temp workers are already entitled to worker’s compensation under New Jersey law—the temporary agency is supposed to take care of it. That doesn’t mean they always receive benefits, and often need to look to a law office like this one to protect their rights.
The bill may also open up new opportunities for workers to form unions. Half the makeup of the people overseeing the QBP must be representatives of the workers, according to the bill.
So far the bill seems to have bipartisan support.
The bill would help gig economy workers carry benefits over from contract to contract; in other words, workers own their benefits. Gig employees would be able to choose one of the qualified providers.
These plans aren’t unheard of. Construction workers often use a multiemployer plan. Business associations often use similar plans. Professional actors benefit from similar plans.
The Senate is also considering a federal portable benefits act that would award grants to states, local governments, or nonprofits who want to innovate and experiment with portable benefit plans. At the moment the bill seems to be stuck in various committees, but it hasn’t been taken off the table yet.
Some companies are already testing portable benefits plans. For example, the job platform company Thumbtack partnered with the National Domestic Workers Alliance to beta test just such a program.
Independent contracting has outpaced traditional payroll growth in our economy, so policies like these will become increasingly necessary to protect the health, safety, and rights of workers.
Our office will continue to keep you informed as new developments arise.
See also:
Are You a Misclassified Employee?
What Happens When NJ Employers Don’t Carry Workers Compensation Insurance?
These 5 Types of Workers Aren’t Covered by NJ Workers Compensation
