Flexible Jobs Requires Flexible Benefits: A Call for Action

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November 10, 2015; Medium

“New technologies and business models are fundamentally changing the economic landscape across the country, adding value to consumers’ lives and bringing new opportunities for workers. These changes are also raising questions about the changing nature of work in America for businesses, workers, labor organizations, governments, and consumers alike. As our country has at prior moments of workplace change, we must find a path forward that encourages innovation, embraces new models, creates certainty for workers, business, and government and ensures that workers and their families can lead sustainable lives and realize their dreams…We, the undersigned, believe that society and the economy are served best when workers have both stability and flexibility. Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire.”

With these words, an unusual group including tech founders and CEOs, venture capitalists and funders, and nonprofit and foundation executives, as well as a few representatives from the alternative labor movement, describe the challenges of what has been called the “sharing economy” and principles for how we should respond.

Caroline O’Donovan, writing on Buzzfeed, observed:

Many of the companies that signed this document are the very same companies responsible for the fragmentation of the workforce in the first place. The founders of Lyft, which hires independent contractors to drive cars, signed it. So did the CEO of Handy, which dispatches contract workers to clean houses. The CEO of Instacart, which relies on a team of drivers and shoppers to deliver groceries to customers, is also on there. Partners from the venture capital firms that fund these companies (or those like them)—Homebrew, Greylock Partners, Union Square Ventures and Second Avenue Partners—also signed on. And many, in fact, are being sued by workers who say they were misclassified as contractors and are owed compensation for the pay and benefits they thereby missed out on.

The open letter calls for a set of general principles that should guide the development of social policies for the new workforce.

  1. Supporting both stability and flexibility is good for workers, business and society. We are in agreement that flexible work should not come at the expense of desired economic security.
  2. We need a portable vehicle for worker protections and benefits.

We believe this model should be:

  • Independent: Any worker should be able to access a certain basic set of protections as an individual regardless of where they source income opportunities.
  • Flexible and pro-rated: People are pulling together income from a variety of sources, so any vehicle should support contributions that can be pro-rated by units of money earned, jobs done, or time worked, covering new ways of micro-working across different employers or platforms.
  • Portable: A person should be able to take benefits and protections with them in and out of various work scenarios.
  • Universal: All workers should have access to a basic set of benefits regardless of employment status.
  • Supportive of innovation: Businesses should be empowered to explore and pilot safety net options regardless of the worker classification they utilize.
  1. The time to move the conversation forward is now. Who should contribute financially (and how much)? What type of organization (or organizations) should administer these benefits and protections? What type of legislative or regulatory action is required to create or enable this model while allowing for experimentation and flexibility? We believe these issues are best pursued through policy development, not litigation, with an orientation toward action in the public, private and social sectors.

The issue is getting some attention at the national level. In an earlier article, Ms. O’Donovan looked at how U.S. Senator Mark Warner (D-VA) is approaching it:

Warner believes that with the restructuring of the American workforce, there’s “a chance to do a redesign [of the country’s social safety net].” […] To that end, he has spent much of the last few months taking meetings with workers, constituents, tech executives, policymakers, and labor leaders trying to figure out what kind of change needs to happen, and who’s going to have to give and take where. Warner has been doing a lot of talking about the issue, convening a number of round tables and panels on the topic. He’s also called out the current presidential candidates for glossing over the issues he’s most concerned about when it comes to gig workers, such as unemployment insurance, workers’ compensation, and disability insurance, as well as things like overtime and other protections.

The concern that workers in the new economy need a new approach to the provision of insurance, pension and other supports that were previously supplied by traditional employers needs to be translated into action, and that will require an ability to get government at some level to step forward and enact new policies. One of the Open Letter’s signers, David Rolf, president of Seattle’s SEIU local 775 suggested that “the fastest, most efficacious thing that could happen is a city government mandating portable benefits, and then companies or nonprofits or unions stepping in and starting to build the infrastructure for it. ‘Any city government in the country could take the first steps tomorrow. They could do it right now.’”

Anyone willing to be first?—Martin Levine

  • James Anderson

    I believe we should consider moving away from a system where a person’s health benefits are tied to a particular employer or aspects of their employment. For example, currently many employers pay a premium for worker’s compensation insurance to cover accidents and illnesses directly related to employment and then another set of premiums for general health insurance. It would be better in my opinion if all health benefits, whether directly employment related or not, were tied to the individual. The individual would then be free to move back and forth from any employment or business situation he/she might be interested in. Also that would remove a considerable regulatory burden from the employers who now must spend a tremendous amount of money, time, and energy trying to understand and comply with thousands of pages of regulations.