Senator Bill Cassidy (R-LA) on Wednesday issued a whitepaper calling for workplace benefits for independent workers.
The whitepaper, “Portable Benefits: Paving the Way Toward a Better Deal for Independent Workers,” lists a selection a proposals Sen. Cassidy hopes to implement as chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee.
It follows a request for information Sen. Cassidy issued in June 2024, where he sought feedback from stakeholders on how to remove federal legal and regulatory hurdles that prevent gig workers from receiving benefits.
A 2023 study by the Legal and General Group found that 77% of independent contractors said they would have to rely on personal savings to fund their retirement, and 73% anticipate using Social Security as their main source of income.
“Labor and employment laws designed for a different time no longer address the needs of today’s independent workers. Such laws were intended to provide workers clarity, certainty and security—not to make them out of reach,” wrote Sen. Cassidy in a statement.
Whereas major federal employment and labor statutes generally apply to full or part-time employees, laws on independent workers benefits remains limited and confusing. According to the whitepaper, the Government Accountability Office (GAO) reports that at least seven federal agencies use “varied terms” to label independent workers, which could cause “fragmented” data on the gig workforce.
Among Sen. Cassidy’s proposals include:
- Establish a safe harbor for companies, so they can offer portable benefits to independent workers without the fear of misclassification lawsuits.
- Give workers clarity and consistency by instituting a single employment test under federal law.
- Increase health care coverage options for independent workers. This includes clarifying existing law to allow independent workers to access affordable, high-quality health care coverage through association health plans.
Sen. Cassidy also called for increased participation in pooled employer plans (PEPs) and single employee pension (SEP) IRAs, adding that such retirement plans are readily available for independent workers under federal law and most banks, including credit unions, offer the features as they are “simple to create and maintain.”
Further, he called on Congress to consider “allowing banks to create escrow or suspension accounts to address the irregular income challenges faced by independent workers,” and for companies to be permitted to automatically enroll independent workers at “2% of base pay while offering flexible contribution options.”
He also added that data sharing across payroll providers could be facilitated to streamline retirement contributions for independent workers working for multiple companies, and asked Congress to “consider exempting SEP and PEP accountholders working more than 32 hours per week from requirements to remove money from their accounts by a certain age.”
“Modernizing labor and employment laws will allow independent workers to receive benefits without disrupting the traditional employment model, fulfilling the promise of American labor and employment law,” Sen. Cassidy stated. “I look forward to working with interested stakeholders and my HELP Committee colleagues to explore ways to ensure our laws serve all American workers.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.