The gig economy has become a significant source of income for thousands of people across New Jersey, offering opportunities to provide for themselves and their families through tasks such as delivering meals from restaurants or shopping for groceries. However, the recent efforts by the New Jersey Senate to support independent workers in this sector may actually do more harm than good.
As a longstanding representative of businesses throughout New Jersey, the Commerce and Industry Association has witnessed the challenges faced by local businesses due to rising prices, tightening budgets, and new regulations. In response to these challenges, many businesses have turned to platforms like DoorDash and Instacart to expand their reach and meet the evolving needs of customers in their communities.
Senate Bill 1386, however, poses a threat to the operations of these businesses by introducing a mandate that would increase costs significantly. The bill aims to provide “portable benefits” for independent workers on these platforms, such as retirement or health insurance, by imposing a 15% surcharge on every dollar paid to delivery workers. This surcharge would lead to higher operating expenses for third-party delivery services, ultimately resulting in increased prices for customers across the state.
The consequences of this bill extend beyond higher prices for consumers. A decrease in orders for local businesses would mean less take-home pay for delivery workers, as well as fewer opportunities for them to earn income. Additionally, the structure of the bill could limit the flexibility that many workers rely on, ultimately harming those it aims to support.
In contrast, a more reasonable approach to portable benefits has been demonstrated by DoorDash in Pennsylvania, where a pilot program allows workers to choose their benefits and requires the company to contribute 4% of worker earnings. This program has been well-received by participants, providing them with financial support for retirement, health insurance, and paid time off without compromising their flexibility.
While portable benefits have the potential to benefit workers in New Jersey and beyond, it is essential to consider the implications of different approaches. Senate Bill 1386 risks undermining the concept of portable benefits before it has a chance to succeed, and lawmakers should reconsider their support for this bill.
In conclusion, the proposed legislation is not the right solution for workers, businesses, or consumers in New Jersey. It is crucial for lawmakers to prioritize the well-being of delivery workers, local businesses, and consumers in the state by reevaluating the impact of Senate Bill 1386. As the gig economy continues to evolve, it is essential to support innovative solutions that benefit all stakeholders involved.
