New Portable Benefits Bill Aims to Help Gig Workers, But Worker Classification Still Matters 

by Rrita Osmani and Cameron McDonough

Senator Bill Cassidy (R- IL) uncovered the Unlocking Benefits for Independent Workers Act to prevent gig worker misclassification. Under this legislation, companies will be able to voluntarily offer portable benefits without employing gig workers and having to pay for unemployment insurance, overtime pay, and workers’ compensation.  

For some time, there has been a disagreement between labor advocates and large companies like Uber or Lyft over portable benefits. Gig workers have been advocating for worker protections, while larger companies have fought back, deeming them independent contractors. Though larger corporations have mostly won, portable benefits are increasingly seen as a way for independent contractors and gig workers to progress.  

So far, there have been some modest voluntary programs from larger companies who are testing out the portable benefit scene. For example, DoorDash launched a pilot program in which 4% of workers’ pre-tip wages are placed in a savings account for them, amounting to less than $400 in over a year.  

How do Portable Benefits Work, and Who Would they Apply to?  

Portable benefits are employment-related benefits that travel with the worker across jobs, are not tied to a specific employer, and are funded via multiple sources that apply to independent contractors, gig workers, freelancers, and other non-traditional workers. Examples of this include portable retirement plans like SEP IRAs or Pooled Employer Plans, health care stipends, associating health plans, and contributions to portable accounts that accumulate regardless of the workplace. 

What would the Unlocking Benefits for Independent Workers Act change for gig and contract workers? 

This act is a small first step that will encourage new standards and worker protections. The voluntary nature of the act makes it more palatable for larger corporations, and the broader idea of expanding benefits to independent contractors draws interest from the gig community. 

The legislative goals of the Unlocking Benefits for Independent Workers Act are to enhance gig economy rights by providing a federal “safe harbor” where companies can offer benefits without immediately classifying contractors as employees and avoiding the misclassification topic. This act also modernizes labor law so that gig and independent workers can achieve benefits without sacrificing their flexibility or solo status.  

Why Does Correct Worker Classification Still Matter for Legal Rights and Protections? 

Worker classification determines a person’s eligibility for specific legal protections. If someone is misclassified as an independent contractor, they lose access to minimum wage, overtime, workers’ compensation, unemployment insurance, health/retirement benefits, anti-discrimination protections, the right to unionize, and family/medical leave. On the other hand, if a true independent contractor or a gig worker is classified as an employee, a company can be liable for misclassification lawsuits.  

If a worker feels that they have been misclassified, they should file a complaint with the U.S. Department of Labor, IRS, NLRB, or the EEOC. Also consider the various myths about classification determined by the U.S. Department of Justice Wage and Hour Division to consider your claim: 

• Being called an independent contractor doesn’t matter if I get paid. 
• If a person is misclassified as an independent contractor, they may be denied important benefits and worker protections. 
• If I am classified as an independent contractor, I am not eligible for unemployment insurance. 
• You can still qualify for UI if you are an independent contractor depending on a specific state’s statutes.  
• I received a 1099 tax form from my employer; this means I am an independent contractor. 
• Receiving a 1099 is only classification by an employer for federal tax purposes, but the form itself does not mean you are correctly classified as an independent contractor.  
• I am an independent contractor because I signed an independent contractor agreement.  
• Signing an agreement is irrelevant to being determined as economically dependent on an employer or in business for yourself by the FLSA, FMLA, and MSPA.  
• I am not on the payroll, so I am not an employee. 
• Whether you are on a payroll does not determine if you are an employee or an independent contractor.  
• My employer wants me to be an independent contractor, so that means I am not an employee.  
• Your employer cannot misclassify you for any reason.  
• I telework or work off-site, so I am an independent contractor. 
• Working away from your worksite, such as from your home, does not necessarily make you an independent contractor.  
• I am an independent contractor because it is an established practice in my industry to classify workers as independent contractors.  
• “Common industry practice” is not an excuse to misclassify under FLSA.  

Contact Miller Shah LLP 

Miller Shah LLP has been monitoring employee misclassification and litigating cases related to this topic for the past several years.  

For information about your rights or the firm’s results in employment litigation, contact Miller Shah online or call 866-540-5505 to arrange for a consultation.