Committee backs Modern Worker Security Act to protect portable benefits for independent contractors

The House Education and Labor Committee voted to report HR 1320, the Modern Worker Security Act, sending the bill to the House with the committee’s recommendation after approval in markup. The committee approved the amendment in the nature of a substitute by recorded vote; the final committee tally on reporting the bill was 19 yeas to 16 nays.

Representative Kiley of California, sponsor of the measure, said the bill creates a “safe harbor” allowing businesses to offer noncash or portable benefits — such as retirement contributions or paid time off accounts — to independent contractors without automatically triggering reclassification as employees. “This safe harbor is crucially important to enabling these benefits to actually be provided to these workers,” Kiley said during explanation of the substitute.

Opponents, including the ranking member, argued the bill solves a problem that does not exist and could be used to label modest savings accounts as portable benefits without delivering meaningful protections. In debate, the ranking member argued that current multifactor tests already consider provision of benefits as one of many factors and that the bill’s broad definition of “portable benefits” could be gamed.

Committee debate touched on state pilot programs and the variety of portable‑benefits models in about 15 states, as referenced by proponents, but no appropriations or new federal benefit programs were created in the bill. The committee directed staff to include the committee’s substitute text and to transmit the bill to the House.

The committee’s action was recorded in the markup transcript; the chair ordered technical edits and directed staff to finalize the committee report for transmittal.