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Crowdstaffing featured as Rising Star and Premium Usability HR platform in 2019

Crowdstaffing has earned the prestigious 2019 Rising Star & Premium Usability Awards from FinancesOnline, a popular B2B software review platform. This recognition is given out annually to products[...]

May 13, 2019

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The Contingent Workforce is About to See a Portable Benefits Movement

In every industry, at every experience level, there are contingent workers. The job market has reached an interesting point in its growth – an unprecedented situation where contract workers make up a larger portion of the workforce than ever before. Yet, millions of them are still without benefits. Will the day ever come when gig workers have the same rights as full-time employees? I think so, and I think it’s coming very soon.

The gig economy is thriving. Currently, contingent workers make up 34% of America’s workforce. That number is expected to increase to nearly 50% by 2020. The trend isn’t limited to the US, either – between 20 to 30% of the European workforce is also made up of contingent workers. Across the globe, people are enjoying the freedom of flexibility and access to an array of wealth opportunities. But calling your own shots when it comes to your job is not without its challenges. For a market that’s growing so rapidly and powered by such impressive technology, the contingent workforce is still in the dark ages.

Technology is Moving but Labor Laws Are Dragging Behind

The pros of being a contingent worker don’t always outweigh the cons. Freelancers often struggle with an oversaturated labor market. While sites like Upwork and Fiverr provide plenty of opportunities, they also allow for the undercutting of rates. It’s nearly impossible to compete with freelancers who are offering their services for a mere $5. Then there’s the whole problem of benefits. A recent NPR/Marist poll found that 51% of contingent workers don’t have any benefits to speak of. Sick leave, unemployment, and retirement funds are all just pipe dreams to them. What’s more, only 46% of contractors have health insurance. It paints a pretty scary picture of how unstable and inconsistent the worklife of a freelancer can be.

America has never really been the best at keeping labor laws up to date. Even traditional employees didn’t have many rights until after the 1940s. Before that, the job market was a free-for-all, where employees would work sixty-hour weeks in grueling conditions and not see a cent of overtime. The concept of labor standards is a relatively new one, and America still hasn’t worked out all the problems - even after all these years. Just last week, we talked about how an antiquated law continues to allow employers to pay workers with disabilities as little as 25 cents per hour. Seriously.

The First Spark of The Revolution

Thankfully, hope is on the horizon. Legislators and industry leaders are pushing for fairer labor laws and better employee rights across the country. In Virginia and Washington state, lawmakers are taking on the giant task of fighting for freelancer benefits. Last May, Senator Mark R. Warner (VA) and U.S. Representative Suzan DelBene (WA) introduced legislation to test-drive portable benefits for independent workers:

The Portable Benefits for Independent Workers Pilot Program Act would establish a portable benefits pilot program at the U.S. Department of Labor. It authorizes a total of $20 million for competitive grants to states, local governments and nonprofits for pilot projects to design, implement and evaluate new models ($15 million) or assess and improve existing models ($5 million) for portable benefits for independent workers such as contractors, temporary workers and self-employed workers.

Using this fund, states could create a safety net for independent workers that travels with them as they change gigs. The DoL would give preference to pilot programs that provide benefits like health care coverage, workers comp, sick leave, training benefits, and more. Models that can be scaled up to a national level would also be given priority.

A Vision for Tomorrow’s Contingent Workforce

Some of the gig economy’s biggest players are already voicing their support, including Sara Horowitz, founder of the Freelancer’s Union, Postmates CEO Bastian Lehmann, and Lyft’s VP of Government Relations, Joe Okpaku. Just last week, Uber CEO Dara Khosrowshahi co-authored a letter asking business, labor, and government leaders in Washington state to get moving:

“The world of work is changing – driven by technological and economic developments that have reshaped the opportunities and challenges for workers in the twenty-first century. However, the American social safety system, which was designed in the 20th century for a very different economy, has not kept pace with today’s workforce.”

The letter goes on to identify the main principles of an effective benefits system:

  • Flexibility for workers to take benefits with them from gig to gig.
  • Proportionality of contributions, based on standards developed by ongoing analysis.
  • Universality of how benefits are applied across different industries and to different workers.
  • Innovation-fueled development of programs that enable organizations to compete for funding, as well as the development of systems that make portable benefits possible.
  • Ensuring independence and choice remain top priorities when developing new benefit models.

Deploying portable benefits at a national level will take time. That’s why Khosrowshahi, along with other pioneers of the new social contract, feel that making changes at the state level first would be more effective. I can’t help but agree. Developing and testing the system on a smaller scale not only expedites the legal processes, but also allows for more accurate identification of any issues that may arise. Washington state’s contingent workforce will be the guinea pig.

The Fight Has Just Begun - Will You Join?

The portable benefits movement may be just starting out, but it’s already getting exciting. For years, independent workers have had to fight their own battles – and the field has not been a level one. At the moment, the freelance labor market is segregated and disconnected. We have a massive number of contingent workers with limited rights, limited support, and no real security net to hold them all together. It’s time they get some much-needed attention, don’t you think?

You can learn more about the bill and keep track of its progress at Congress.gov.

 

 

 

Sunil Bagai
Sunil Bagai
Sunil is a Silicon Valley entrepreneur, thought leader and influencer who is transforming the way companies think about and acquire talent. Blending vision, technology and business skills honed in the most innovative corporate environments, he has launched a new model for recruitment called Crowdstaffing which is being tapped successfully top global brands. Sunil is passionate about building a company that provides value to the complete staffing ecosystem including clients, candidates and recruiters.
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