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PHILADELPHIA—Portable workplace benefits will have to be part of a new social contract between U.S. employers and workers as more Americans join the gig economy, said Sen. Mark Warner, D-Va., speaking at the Democratic National Convention on July 26.
"While the gig economy may still be relatively small, depending on how you slice it, about 35 percent of the workforce today in America is in some kind of contingent status, whether it's as an independent contractor [or] someone doing a series of part-time jobs," Warner said during a panel sponsored by the Society for Human Resource Management (SHRM) and Third Way, a centrist think tank.
But a huge obstacle impeding many U.S. workers from thriving in the new economy is a lack of portable benefits. Freelancers may work with several employers each year and, due to the temporary nature of their employment, go without essential benefits such as health care coverage, unemployment insurance or workers' compensation.
Panelist Henry G. "Hank" Jackson, SHRM president and CEO, said the current federal rules that require employers to classify workers as either employees or independent contractors will have to be adjusted to fit the changing workforce. "We have two kinds of employees currently. I don't think that is going to work going forward," he said.
Increasingly, hiring workers has become like buying cable television packages, Warner said. Employers are moving from "buying the whole person—40 hours a week, 52 weeks a year—to buying a skill set on an on-demand basis."
Employers and workers gain flexibility this way, but the worker benefits system developed in the 1930s and 1940s around health insurance, retirement, unemployment, disability and workers' compensation "goes out the window," Warner said.
The senator urged experimentation at the local level to address this challenge. He advocated creating a new system of benefits that would be portable—benefits that would attach to the worker, not the employer. "We can spend a lot of time arguing about worker classification, but I want to work on a portable benefits system—a new social contract that works in the 21st century."
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