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Approach of employer financed benefits for gig workers

Employers of freelancers, gig workers and independent contractors can face strict penalties for awarding retirement or health benefits to non-employees.

This is because the Employee Retirement Income Security Act and the Affordable Care Act don’t take into account the rise of the Gig Economy. As a result, independent contractors are forced to fend for themselves. But the Government is exploring ways to make retirement and healthcare more accessible to all workers. These initiatives deal with the requirements for multiple employer plans (the pooling of plans by organizations to lessen burdens) and explore the issues that affect the workforce the most.

“Currently, employers with a ‘common bond’ can form a pooled retirement plan in order to lower costs and lessen compliance burdens. The President is proposing an elimination of the ‘common bond’ requirement in order to allow more businesses to offer pooled plans for their workers. This change would also allow certain nonprofits to create similar plans for independent contractors. In addition to the President’s proposals, the Department of Labor is also making portable benefits a priority by exploring the key issues facing workers”. Quote, Fisher Phillips of Lexology.

The Government’s involvement seems well enough, but gig employers may benefit the most as more workers choose to join a safer gig economy. But their involvement could also mean less empowerment for gig workers in the future.

 

 

Image Source: digitaljournal.com
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