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Sen. Bill Cassidy (R-LA) has asked for public comments on how to amend current law to allow companies to provide benefits to their independent contractor workers who are not employees.  Sen. Cassidy is ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, the committee with jurisdiction over ERISA’s non-tax pension/retirement savings issues. He also serves on the Senate Finance Committee, which has jurisdiction over ERISA’s and other retirement savings tax issues.

On June 5, via the HELP Committee’s website, Sen. Cassidy addressed a series of questions about providing benefits to independent contractors to “Interested Parties.” The questions range from how to eliminate barriers to employers providing “portable” benefits to their independent contractors to what benefits (e.g., retirement savings plans, health insurance, or a general benefits fund) are most wanted by workers who are not employees. All of Sen. Cassidy’s questions are posted on the Internet at https://www.help.senate.gov/ranking/newsroom/press/ranking-member-cassidy-requests-information-from-stakeholders-on-portable-benefits-for-independent-workers.

The question of benefits availability for independent contractors is also under review in the House, where Rep. Kevin Kiley (R-CA), chairman of the House Education and the Workforce’s Subcommittee on Workforce Protections, has announced that he is working on legislation to allow for provision of benefits to independent contractors.

A number of states have passed or are considering legislation that would allow employers to provide certain benefits without impacting the worker’s status as an employee or an independent contractor.

 The issue of worker classification is hotly controversial, with left-leaning and labor-friendly groups pushing for rules that would classify more workers as employees. These groups appear to oppose eliminating employee status as a condition for providing tax-advantaged benefits. For example, the National Employment Law Project (NELP), while supportive of the portability of benefits (i.e., allowing benefits to follow workers from former employer to new employer), opposes legislation that simply eliminates the provision of benefits as a factor in determining worker classification. Such rules, said a NELP spokesperson, are “essentially giveaways to corporations that are misclassifying their workers.

Prospects: This issue, and the legislation that may spring from work on it, is so far essentially partisan. It is also a high priority for organized labor. So, prospects for enacting a legislative proposal appear relatively dim at this point. However, the partisan makeup of the next 119th Congress (determined by the November elections) could result in a more bipartisan effort and, thus, greater chances for action on the issue.

NAIFA Staff Contact: Michael Hedge-Senior Director-Government Relations at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.