A group of labor leaders is calling for change in the way the workers’ compensation system applies to contract workers.
In a letter sent to US lawmakers in November, a group of executives and public policy experts from companies including Lyft, Handy and Etsy asked for new contract-worker protections, including workers’ compensation benefits when contract workers are injured. As many as 53 million Americans are now self employed; the letter’s authors argue the benefits system hasn’t kept up with “rapid” changes.
“Traditionally, benefits and protections such as workers’ compensation, unemployment insurance, paid time off, retirement savings and training/development have been, largely or partly, components of a worker’s employment relationship with an employer,” the letter reads.
“The Affordable Care Act has disrupted that model, providing more independent workers a different avenue of access to health insurance. Another new model is needed to support new ways of work.”
Under the proposed model, benefits such as workers’ comp would be “portable,” so workers could take them from job to job. The coalition is pushing for discussion among lawmakers on how this would best be accomplished, thus bypassing litigation that has already arisen from workers with companies, such as Lyft and Instacart, that rely on contractors.
The debate over employee status, and consequent eligibility for workers’ compensation benefits, puts additional pressure on insurance professionals to help employers correctly classify employees. That’s something many companies and agents overlook when submitting workers’ compensation applications, says La’Troya McKinney of Abram Interstate Insurance Services.
“If an employer is scheduling their time, telling them who to see or where to go, they are an employee under the labor code, and [the employer] can be fined up to $150 per day per employee for not having comp in place,” McKinney says.
She adds that although these stipulations apply primarily in California – where 1099 status is under strictest review – it doesn’t hurt for agents across the country to adopt a similar no-risks attitude.
“I tell people that if they base their decisions off regulations in what is one of the most rigid states, they can’t go wrong,” she says.
