States Continue to Expand Independent Contractor Rights

A growing number of states are advancing efforts to extend rights and benefits traditionally reserved for full-time employees to independent contractors. Activity has centered on providing contractors with portable benefits —benefits that follow workers across jobs—and, in some cases, expanding union organizing rights for app-based and gig workers..

New pilot programs: In May, Maryland became the third state to partner with DoorDash on a pilot program offering delivery workers access to portable benefits. Under the program, workers can earn retirement savings, health, dental, and vision coverage, and paid time off. Similar partnerships are already in place in Pennsylvania and Georgia.

State law momentum: Tennessee, Alabama, and Utah passed laws earlier this year permitting employers to participate in voluntary portable benefits programs for contractors.

• Tennessee’s law, the Voluntary Portable Benefit Act allows contractors to receive benefits such as health insurance or retirement without changing their employment status.

• Massachusetts voters, at the end of 2024, approved a ballot initiative that granted broad union organizing rights to app-based drivers, becoming the first state in the country to do so. 

• California passed a law in 2020 after voters approved a ballot initiative granting app-based drivers certain minimum wage and health insurance rights, among other protections.

What’s next: Momentum continues to build. States including California and New York have come close in previous years to granting bargaining rights to app-based workers. Meanwhile, several other states are now considering legislation similar to the laws passed in Tennessee, Alabama, and Utah.

• Creating portable benefits for contractors has also gained momentum at the federal level. Two bills introduced earlier this year garnered significant support, including from Senate HELP Committee Chair Cassidy.

• HR Policy has long advocated for providing a legal safe harbor for employers to provide contractors benefits without changing their worker classification.