Thursday, January 4, 2018

Portable Benefits: Carrying Less to a Vanishing Point?

The problem with the idea of portable benefits – employee benefits (including workers’ compensation) provided across employers to putatively, radically different workers in the “gig” economy – is pretty simple. Seen in its best light, the idea is a half-measure crafted because we lack the political will to provide explicitly adequate benefits in changing social circumstances. Seen in a worse light, the idea represents naked acquiescence to well-heeled employers who have decided, unilaterally, that Section 220 of the Restatement Second of Agency, which contains the traditional common law test for whether an individual is an employee or an independent contractor, is too hard to apply and leads to inconsistent findings of employee status, rendering business planning unpredictable. Seen in its worst light, the idea is just another way station—with opt-out and compulsory arbitration—along a road to poverty, paved with illusions of absolute employer liberty, to the ineluctable detriment of working people.  

A long time ago, someone told me, in only slightly more polite language, that it was folly to give a former Teamster (like me) a Harvard Law degree. Time will tell. I do confess to a proclivity for asking inconvenient questions. Like these. Is the goal behind portable benefits the provision of a standard of living adequate to sustain life? Or is the goal simply to provide a vehicle for employers to pay employees the least possible benefit that our present society can, in remotely good conscience, countenance?

I am a great fan of the late William James, the famous pragmatic philosopher. James assessed truths by preliminarily assessing the “cash value” of seeking them. Some questions may not be worth asking, nor their answers worth knowing. But I think that with respect to workers’ compensation—or any of its proposed substitutes—the two questions possessing the greatest “cash value” are 1) Can we agree on the definition of an adequate benefit? How much does an injured worker adequately need to eat and have lodging? (we can start there); and 2) Once we have the answer to 1), are we willing, as a society, to provide that amount?

I am deeply suspicious that we purposefully avoid answering the first question (either procedurally or substantively) because we fear how the more powerful elements in society may answer the second.

So, to proponents of “portable benefits,” I ask, first, how much, precisely, will the package pay to injured workers in terms of indemnity and medical payments? (In fact, I would ask the same question as it relates to any manner of being injured at work, including being sexually or racially harassed or discriminated against). Saying that you do not know is unacceptable, since we now have a system which, though inadequate, is fairly well understood in terms of what must be fixed. Portable benefits advocates must also answer a second question. How do you prevent “non-portable” employers from masquerading as "portable" employers in an all-too-familiar race to the bottom? Put another way, how would you prevent regular employees from being misclassified as "gig" employees. We are presently experiencing a contagion of misclassification in the current employment law regime and I am not confident that a "gig" regime will be any less resistant to moral hazard. 

Inconvenient questions, I know. But this Teamster will not give up on benefits floors before having the answers. 

Michael C. Duff

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