Senator Cassidy Proposes Workplace Benefits for Independent Workers

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.

“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.