Traditional Benefits Exclude Freelancers

  • Traditional employment arrangements offer benefits to employees such as healthcare, paid time off, and retirement until employment is terminated.
  • Due to the Fair Labor Standards Act (FLSA) self-employed people, freelancers, and other independent contractors do not receive benefits, but they enjoy flexibility and independence.
  • Of the 64 million freelance workers in the U.S. about half are women.
  • The majority of independent contractors use flexible work to supplement earnings from a traditional job. They likely already have access to employer-provided benefits or may get coverage through spouses.

Portable Benefits Follow Workers

  • In contrast to traditional benefit packages, portable benefits remain with workers instead of employers.
  • The public and private sectors are innovating ways to offer the growing segment of nontraditional workers access to benefits.

The Public and Private Sectors Should Reform Benefit Models

  • Laws and regulations have not kept pace with the changing models of work.
  • States should consider adopting private-employer portable benefits programs, a fiscally responsible option.
  • The plans should be voluntary to provide states and employers the greatest flexibility in determining whether and which benefits to provide to independent contractors in their workforce.
  • Smart reforms can ensure that independent workers, especially women, can enjoy freedom, flexibility, and economic security from benefits.

Click HERE to read the policy focus and learn more about portable benefits.