Portable Benefits: A Pathway to Union Expansion?

Portable Benefits: A Pathway to Union Expansion?

Next Thursday, the Senate Labor Committee is once again scheduled to hear Senator Troy Singleton’s “Portable Benefits” bill, S943 (known as S67 from last Session).

Proponents of a Portable Benefits plan say it offers a viable compromise for Independent Contractors to receive worker benefits similar to those received by W-2 employees, a “safety net” that can follow them from gig-to-gig. But legal experts warn that the bill will likely result in fewer companies contracting with 1099 workers, and is a job-killing bill that targets the very people it purports to help–independent contractors–in an effort to make them easier to unionize.

A interview with the sponsor, published last year, does appear to indicate a union-centric motivation for the measure. CLICK HERE TO READ THE FULL INTERVIEW.

Describing himself as “the son of union Teamster” and a union carpenter, Senator Troy Singleton extolled the virtues of portable benefits, not as something Independent Contractors have been lobbying for, but as a helpful tool for labor unions to grow their ranks.

“The tension with labor on this issue is that our job, as labor, is always to try to organize. If you’re not organizing, you’re not growing. There is no greater organizing tool than a portable benefits model. If you have a whole class of divergent workers, there is an entity that is going to be needed – our proposal talks about a qualified benefit provider (QBP) – to be able to manage those benefits. Within our bill, we say half the makeup of the group overseeing it have to be representatives of the workers. So if you’re an enterprising labor organization, and you see that there’s a whole bunch of Lyft or Uber drivers or graphic designers for instance, and you want to be that QBP, you’re essentially a half a step away from unionizing those groups. This is an incredible organizing tool, a different way of expanding that roster. While it’s not a traditional model of how organizing has been, it’s another tool for organization.”

The legal experts at JD Supra analyzed the bill last session, and concluded that it was “another step towards eliminating the use of Independent Contractors” . S943 would mandate any companies who contract with 50 or more freelancers to pay into a benefits plan them, which they say creates a “financial disincentive to utilizing them.” The bill would apply to services provided to consumers in New Jersey.

Although the bill did manage to make it through the Senate Labor Committee last session, it stalled in the Budget & Appropriations Committee, so there are several questions that have yet to be addressed, such as: if a company pays portable benefits to 1099 workers who are later determined to be employees by the NJDOL (which currently utilizes an employee classification test that has faced intense criticism lately), what happens to the benefits already paid out to those workers–are they rescinded? How will this affect businesses in New Jersey who utilize Independent Contractors? Is this legislation something beneficial that gig workers want, or is it being driven by labor unions looking to grow their ranks? Will Portable Benefits ultimately help or hurt members of the growing gig economy?

The Senate Labor Committee will meet at 10am on Thursday, February 13th in Committee Room 6th, First Floor, State House Annex.

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