Alabama lawmakers and industry officials are grappling with the challenge of providing employment benefits to nontraditional full-time workers in the state. The Alabama Portable Benefits Task Force recently convened to explore the possibility of establishing a portable benefits system for independent workers, a concept that is gaining traction as the gig economy continues to expand.
Portable benefits are a type of employment benefits that are not tied to a single employer but instead follow the worker across different jobs or gigs. These benefits can include health insurance, retirement savings, and paid leave, among others. Currently, gig workers often lack access to such services and protections, highlighting the need for a new framework to address this issue.
During the task force meeting, co-chair Sen. Arthur Orr emphasized the importance of reviewing the landscape and finding ways for the state to address the lack of benefits for independent workers. With an estimated 79,000 active app-based workers in Alabama engaged in rideshare and delivery services, the need for portable benefits is becoming increasingly urgent.
Kristin Sharp, CEO of the Flex Association, pointed out that there are millions of app-based workers nationwide who prioritize flexibility in their work but are interested in receiving equivalent benefits in a nontraditional way. The task force, established in the 2024 legislative session, aims to develop a model that can provide benefits to independent contractors, freelancers, and gig economy workers.
Rep. Neil Rafferty highlighted the importance of creating a structure that offers benefits to independent contractors and gig workers, especially for families who rely on this type of work. While there is no successful example of a framework from other states, Rafferty expressed hope that Alabama could lead the way in innovating portable benefits for nontraditional workers.
Unlike traditional benefits tied to full-time employment, portable benefits can be self-funded, employer-funded, or supported by contributions from multiple organizations. The task force discussed various models, including an employer-funded approach, and emphasized the need to keep options open to ensure a comprehensive solution.
States like Utah and Pennsylvania have already begun exploring portable benefits through legislative action. Utah passed SB 233 in 2023, allowing entities to offer portable benefits plans while protecting employers from liability concerns. Pennsylvania’s pilot program for DoorDash drivers could serve as a potential model for Alabama to consider, although legal challenges from the federal government remain a concern.
Legal issues surrounding portable benefits primarily revolve around federal versus state jurisdiction in defining employment and benefits. The task force plans to continue meeting to further explore this complex issue and develop recommendations for the Legislature. Sen. Orr emphasized the importance of taking the time to do it right and staying informed about developments across the country.
In conclusion, the push for portable benefits for nontraditional workers in Alabama reflects a growing recognition of the changing nature of work in the modern economy. By addressing the needs of independent contractors and gig workers, the state has an opportunity to lead the way in providing innovative solutions that benefit both workers and employers.
