A bill in the Pa. Senate would require app-based employers like Uber and DoorDash to contribute to benefit accounts. (Photo by Michael M. Santiago/Getty Images)
Delivery and rideshare apps like DoorDash and Uber would be required to contribute to an account to help their workers pay for benefits under legislation now being considered in the Pennsylvania Senate.
Supporters of the bill say it would provide a measure of protection for workers classified as independent contractors under Pennsylvania law who are not eligible for benefits such as workers compensation or unemployment.
But Senate Bill 967 received opposition from Democratic lawmakers in a vote by the Senate Banking and Insurance Committee on Tuesday.
Sen. Sharif Street (D-Philadelphia), the committee’s ranking Democrat, said before the 8-6 vote that while the bill’s intent of providing some support to app-based workers is admirable, it would make it more difficult for such workers to access benefits. He noted that labor unions including the AFL-CIO and Service Employees International Union 32BJ have opposed the bill.
“While this might seem like increased flexibility, it effectively enables companies to avoid contributing to workers benefit accounts, further reducing the minimal protections offered,” Street said, calling for a vote against the bill.
Street told the Capital-Star in an interview he believes the bill is overly broad because it would classify anyone hired through an app as an independent contractor not eligible for benefits.
“Employers could frustrate the provisions of the law regarding employee benefits by hiring through an app,” Street said. “Just because someone is hired through an app does not mean that they are an independent contractor.”
An amendment to the bill removed a requirement for companies to provide occupational accident insurance to workers, which Street said was one of the positive aspects of the original bill.
Sen. Ryan Aument (R-Lancaster), SB 967’s prime sponsor, said that most gig workers prefer to maintain their independent contractor status and his legislation is an effort to provide them with “well-deserved benefits and protections.”
“Indeed, most gig workers have a full-time job or access to benefits and utilize gig work to supplement their income,” Augment said in a statement to the Capital-Star. “I think it’s time for Pennsylvania to recognize this modern workforce and provide them with these benefits and protections while respecting their desire to keep the flexibility these jobs provide.”
The bill is awaiting a roll-call vote by the full Senate.
DoorDash launched a pilot benefits account program in Pennsylvania earlier this year with Democratic Gov. Josh Shapiro’s support. It gives workers the option to enroll and receive a percentage of their earnings as contributions to a benefits account enabling them to save for retirement, pay health care costs or compensate for lost income. Shapiro’s office did not respond to a request for comment on SB 967.
In a statement, DoorDash said about 4,400 people who work for the company have signed up to participate. At the end of July, DoorDash had contributed $440,000 to participating workers.
In an interview arranged by a DoorDash spokesperson, DoorDash worker Jim Ryan of Natrona Heights, in Allegheny County, said he signed up for the program immediately after it was announced and said the account serves as a cushion for unexpected expenses and possibly a Disney vacation with his wife and grandson.
Ryan said the account also serves as an incentive to spend more time working for DoorDash because the benefit account contributions increase his earnings. But Ryan said his wife’s employer provides their health insurance.
DoorDash and other gig economy employers have fought a national movement to have their workers classified as employees, which would give the workers access to benefits and protections under state and federal laws. DoorDash alone has spent $930,000 lobbying Congress so far this year, according to opensecrets.org.
Proponents of maintaining independent contractor status for gig workers say those workers value the flexibility of not having to work a set schedule and take assignments between other obligations.
Ryan said that’s what drew him to DoorDash when his mother had a stroke, his wife was undergoing treatment for cancer and he and his wife started helping to care for their grandson.
Gabe Morgan, vice president and Pennsylvania director of SEIU 32BJ, said the Pennsylvania Legislature should be focused on giving gig workers the same protections that unions have fought for decades to secure. Lawmakers could also give gig workers the right to collectively bargain under state law, Morgan said.
“Fundamentally we think the problem in Pennsylvania is that workers don’t have enough rights and taking away rights because people work for an app is a terrible thing to do,” Morgan said.
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