About 79,000 Alabamians are currently employed by app-based delivery and ride-sharing services and nearly one in four residents have worked for them at some point.
“There is a wide swath of people in Alabama who have ever earned income through app-based platforms,” Kristin Sharp, the chief executive officer for Flex, a trade association for the service platforms, said at the Alabama State House recently.
A new state task force is now studying how to potentially get benefits such as retirement accounts and paid time off to these workers and other contract employees.
The Portable Benefits Task Force, created by the Legislature earlier this year, met for the first time this week.
“Most benefits are attached to a single job,” Tamara Pharrams, an attorney with the Legislative Services Agency, told the group. That office provides research and bill-drafting expertise to lawmakers.
“Portable benefits, however, are attached to workers and not attached to a specific job. So the goal is to promote economic security across communities, to provide greater flexibility to those persons engaging in these jobs.”
Pharrams said that since the pandemic, there has been a proliferation of gig workers.
Utah last year approved legislation allowing companies to offer portable benefits to gig workers. However, there are still questions about how that law conflicts with federal rules and definitions regarding contract employees and traditional employees who qualify for employer-provided benefits.
Earlier this year, Birmingham-based Shipt became the first company in Utah to start offering benefits to its shoppers and drivers, the Salt Lake Tribune reported.
Previous reporting from Utah said that legislation didn’t force companies to offer benefits and that federal rules say contract employees don’t have to be awarded the same benefits as traditional employees.
Working within federal rules will be one of the task force’s challenges, said co-chair Sen. Arthur Orr, R-Decatur.
Orr in 2018 sponsored legislation to allow companies to offer portable benefits to contractors. That bill met several roadblocks, he said.
“Unfortunately, in the intervening years, it doesn’t appear that anyone has really solved the issue,” Orr said. “But this is important for employees and workers, particularly in the future.
“… It’s important work for us to review and see the landscape and see if there’s a way our state can address this issue even incrementally.”
The biggest question, Orr said, is how federal law comes to bear as states try to occupy this space and do things for those workers that it has that are deemed as independent contractors or gig workers.
Rep. Neil Rafferty, D-Birmingham, sponsored the legislative resolution creating the task force and is co-chair.
Rafferty told the task force his family has used app-based jobs to make ends meet.
That work can include driving people to the airport in the morning for Uber and delivering groceries in the afternoon for DoorDash. Hence, the importance of benefit portability.
And while more people are using these jobs as their main source of income, the jobs lack the stability of traditional benefits such as sick leave or workers’ compensation.
Having the financial security of benefits is critical for working families, he said.
“The idea is to have a menu of benefits and see where the real demand is … and evaluate how we can do that and then set up some sort of mechanism to make it happen,” Rafferty told Alabama Daily News.
Orr said he’d eventually like to see portable benefits that could be company and self-funded. Companies wouldn’t be mandated to offer them, he said. But he and Rafferty agreed that offering portable benefits would help companies attract workers.
Which benefits to offer is part of the pending discussions before the task force.
Mark Smith, Shipt’s director of state government affairs, told the task force it hopes to have data soon from the Utah pilot on what benefits are being used by workers.
He also said contractors also ask for child care benefits.
“There’s a myriad of (benefits) to address, retirement is obviously a big one,” he said. And while many contract employees get health care benefits elsewhere, either through a full-time job or a spouse — there is a subset who do need health insurance.
“There is not one answer that fits everybody,” Smith said. “…It’s about flexibility and portability.”
On its website, Shipt lays out its support for portable benefits.
“While Shipt currently offers competitive pay and a range of perks, we support changes to the law that would allow shoppers and drivers access to additional benefits without jeopardizing the flexibility and independence they value most,” it says. “Right now, due to outdated legal frameworks, creating benefits offerings can chip away at independent contractor classification for workers and that flexibility.”
The task force will report to lawmakers possible recommendations prior to the 2026 legislative session, giving it nearly 18 months to study the issue.
