Data & Research April 24, 2025

Senator Cassidy Proposes Workplace Benefits for Independent Workers

A white paper issued by the Senate HELP Committee Chair is meant to address the retirement readiness shortfalls for gig workers.

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Senator Bill Cassidy, R-Louisiana, chairman of the U.S. Senate Committee on Health, Education, Labor and Pensions, issued a white paper on Wednesday, “Portable Benefits,” that outlines proposals to provide workplace benefits to independent workers.

Cassidy’s proposals include:

  • Expanding access to and the use of retirement accounts for independent workers via pooled employment plans and single employee pension individual retirement accounts;
  • Giving workers clarity in testing employment status by instituting a single employment test under federal law;
  • Establishing a “safe harbor” for companies so they can provide independent workers with benefits without litigation fears; and
  • Increasing independent workers’ health care options, such as allowing access to association health plans and health reimbursement arrangements.

“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,” said Cassidy, in a statement.

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“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,” he added,

Among its proposals, Cassidy’s paper suggested that Congress should allow banks to create “escrow or suspension accounts to address the irregular income challenges faced by independent workers.”

The paper also suggested that “companies and trade associations could set up PEPs and SEPs on behalf of independent workers, automatically enroll them without requiring contributions, and offer workers’ advice without creating an employment relationship and compromising their independent status.”

The paper also proposed that “Congress could 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.”

The proposals come amid a major workforce shift: Nearly half of workers in the developed world will be part of the gig economy by 2027, according to a March report from Ogilvy Consulting.

About 36% of members of the U.S. workforce were classified as independent workers, according to a 2022 McKinsey & Co. survey.

However, the majority of independent workers lack access to retirement options. Only 21.9% of independent workers participated in a workplace defined contribution plan, according to a 2021 Pew Research study. 

Cassidy’s white paper offered no timeline for consideration of the issues it raised, and it is unclear how work on such legislation would align with the massive budget and tax cut bills Congress is working on, which are a priority for President Donald Trump.

Compliance April 24, 2025

DOL Reconsidering Biden-Era ESG Considerations Rule

Although the rule survived several court challenges during the Biden administration, it is in jeopardy once again.

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The Department of Labor is considering rescinding a 2022 rule that permits retirement plan fiduciaries to consider environmental, social and governance factors when making plan investments.

“Now that its new leadership has had the requisite time to gain familiarity with the issues in this case, the department has determined that it intends to reconsider the challenged rule, including by considering whether to rescind the rule,” the DOL stated in an April 21 filing to the U.S. 5th Circuit Court of Appeals in which it is seeking to delay the appeal of 2023 litigation filed by 26 state attorneys general and others challenging the legality of the ESG rule.

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The original case, Utah et al v. Walsh, was dismissed at trial in September 2023 and appealed by the states a month later.

According to the DOL’s motion this week, pausing litigation in the case “will greatly conserve the litigants’ and the court’s resources, because the Department’s reconsideration and potential rescission of the challenged rule could obviate the need for further litigation.”

The DOL’s motion is the latest challenge to the Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights Rule finalized in 2022.

The month the rule went into effect, the group of 26 Republican attorneys general and several conservative interest groups challenged the rule in the U.S. District Court for the Northern District of Texas, Amarillo Division, arguing the rule ran afoul of the department’s authority under the Employee Retirement Income Security Act of 1974.

That challenge was denied twice, most recently in February in by U.S. District Judge Matthew Kacsmaryk.

Kacsmaryk initially upheld the rule in September 2023, granting the DOL cross-motion summary judgment, to which the plaintiffs later filed an appeal to the U.S. 5th Circuit Court of Appeals in January 2024.

In July 2024, the 5th Circuit remanded the case back to the district court following the U.S. Supreme Court’s decision to overturn Chevron deference, a standard directing federal judges to defer to regulators’ interpretations of ambiguous laws.

Kacsmaryk’s latest ruling held that the rule is not contrary to ERISA, despite the overturning of the Chevron doctrine, and further held that the rule does not violate ERISA because it still requires fiduciaries to achieve the highest investment returns possible.

Under the ESG rule implemented during the administration of former President Joe Biden, achieving the highest rate of return needs to be the main consideration for fiduciaries when making investment decisions for an ERISA retirement plan, but when two options offer equivalent return rates, a plan sponsor can use ESG considerations as a “tiebreaker.”

Under the previous rule, implemented during President Donald Trump’s first term, fiduciaries needed to consider only “pecuniary factors” when considering investment plans.

The DOL’s motion this week is the latest move by the new administration to change a Biden-era rule.

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