Despite the challenges of an election year, a significant number of Democrats and Republicans share a common goal: addressing the needs of the growing population of freelance and gig workers in America. It is imperative to explore new and creative ways to integrate this expanding workforce, many of whom are self-employed, into the labor market.

One effective solution gaining bipartisan support is the concept of portable benefits, which are directly linked to individual workers rather than specific employers. This idea is gaining traction and is increasingly becoming a priority on the agenda of politicians from both sides of the aisle.

Regardless of the outcome of the upcoming presidential election and the composition of the Congress, there is a clear opportunity to make a positive impact on the lives of many workers in the country. Senator Bill Cassidy from Louisiana has shown interest in portable benefits reforms, and discussions on this topic have also taken place in the House Committee on Education and the Workforce. Some members of Congress have even introduced a bipartisan bill to pilot a portable benefits program. Additionally, there is growing momentum at the state level, with states like Utah and Pennsylvania exploring ways to implement portable benefits.

The main motivation behind these reforms is the recognition that current policies present a dilemma for workers by forcing them to choose between self-employment and access to essential workplace benefits. Decades ago, tax incentives were put in place to incentivize the linking of fringe benefits with traditional W-2 employment. However, these policies now create barriers for non-traditional workers in accessing benefits, as most labor laws cater to traditional employees. With a significant shift in the labor market dynamics, it has become evident that these outdated laws are failing a large and expanding segment of the workforce.

The solution lies in federal policymakers taking steps to level the playing field for self-employed workers. This could involve aligning tax treatment for self-employed and payroll workers, offering flexible benefit options, and enhancing access to healthcare benefits for self-employed individuals.

One crucial step would be to grant self-employed workers legal access to benefits without the fear of potential penalties due to misclassification. Congress could also provide self-employed workers with similar tax advantages as employees, by allowing them to establish pre-tax flexible benefits accounts for various expenses like retirement savings, healthcare, insurance, and childcare. Moreover, improving healthcare benefits for self-employed workers is essential, which could involve expanding options for portable health savings accounts and legalizing association health plans.

It is important to note that many independent workers prefer the autonomy that comes with their current status and do not wish to be categorized as W-2 employees. Attempting to force independent workers into traditional employment arrangements can have negative consequences, as seen in California under Assembly Bill 5. This policy led to a decline in overall employment and self-employment in certain occupations, adversely affecting the very workers it intended to support.

Self-employment is a valuable and favored option for many Americans, but the lack of access to typical workplace benefits is a significant drawback. Both Republicans and Democrats often emphasize their support for workers, and now they have a remarkable opportunity to address the needs of a significant portion of the workforce effectively.