Warner, DelBene propose federal funds to states to modernize unemployment benefits technology

coronavirus politics

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U.S. Sen. Mark Warner (D-VA) and U.S. Rep. Suzan DelBene (D-WA) released the text of draft bicameral legislation to establish an emergency portable benefits fund for states.

The proposal would create a $500 million fund at the U.S. Department of Labor to be administered to states to pay for the costs moving forward of modernizing state Unemployment Insurance (UI) technology systems to facilitate expanded benefits eligibility and support long term innovation, and to create portable benefits programs.

Since 2017, Warner and DelBene have been the lead Senate and House sponsors of the Portable Benefits for Independent Workers Pilot Program Act to establish a grant fund for states, localities and nonprofit organizations to experiment with portable benefits models for the growing independent workforce.

Today’s new proposal builds on that effort in light of the COVID-19 health and economic crisis, which has left many self-employed entrepreneurs and gig workers with no or reduced incomes and little access to long-term traditional benefits programs. Warner and DelBene are seeking to include the proposed legislation in the next COVID-19 relief package.

“For years, I’ve been sounding alarm bells about how millions of self-employed, gig and contract workers are falling through the holes in our social safety net. Now, the coronavirus crisis has put that grim reality into stark relief,” said Warner. “It’s imperative that Congress act to provide states with the flexibility to experiment with innovative models for assisting these workers.”

“COVID-19 is devastating our local economies and leading to a historic rise in unemployment across the country. Congress needs to provide states the flexibility to design new benefit programs for the long-term to protect independent workers and give them control of their benefits,” said DelBene. “No one should fall through the cracks during or after this pandemic.”

The CARES Act allowed these workers, for the first time, access to state-administered unemployment insurance (UI) programs. However, reports indicate that millions of these workers are struggling to access the benefits Congress granted them in part due to clunky and outdated state IT systems that administer the benefits and a lack of federal guidance.

Moving forward, the Warner-DelBene proposal would provide supplemental funds for states to update their unemployment systems for the 21st century, for the purposes of long-term innovation and expanded eligibility.

The emergency benefits proposal would also provide funding to states – in partnership with cities, localities and non-profits – to experiment with innovative proposals for portable benefits, such as paid leave, worker’s comp, the longer-term expansion of UI eligibility, and other programs specific to local economies.

“Senator Warner & Representative DelBene’s proposal accomplishes two essential goals: modernizing state unemployment system technology, and jump-starting portable benefits for the millions of hard working Americans who have been excluded from employment-based benefits.  It simultaneously responds to the crisis at hand and lays the groundwork for a more inclusive system of benefits in the future,” said David Rolf, founder and president emeritus of SEIU 775.

“The ‘Emergency Portable Benefits Program’ is an urgent step needed to ensure every working person has access to a safety net that works for all of us, no matter how you work, how many hours you work or who you work for. Close to 2.5 million domestic workers do the essential work of caring for our homes and families every day without paid leave when they are sick, health insurance or retirement security. Before the pandemic, domestic workers were one emergency away from a crisis. Now facing a global public health and economic crisis, they deserve a benefits system that works for them, because no one should have to choose between working while sick or losing income they need to take care of their family, no matter what kind of work they do, and especially those who take care of us,” said Palak Shah, social innovations director at the National Domestic Workers Alliance.

“The COVID-19 crisis has highlighted the inadequacy of America’s safety net, which leaves millions of non-traditional and low-wage workers without access to key workplace benefits and protections. Although the Pandemic Unemployment Assistance program expanded unemployment benefits to self-employed and freelance workers, it is temporary and has been difficult to administer. The resources provided by this legislation will provide critical aid to help states implement expanded unemployment insurance programs, and encourage the development and expansion of portable benefit systems that can provide financial security to workers across different types of work arrangements during the current crisis and beyond,” said Alastair Fitzpayne, executive director at the Aspen Institute’s Future of Work Initiative.

“Our employment system needs to catch up with the rapidly changing technological landscape and shifting nature of work. Portable benefits made sense before the crisis, and today the need is urgent,” said Marcela Escobari, senior fellow at the Brookings Institution. “This legislation provides the impetus for states to upgrade systems, innovate, and support workers through streamlined delivery of benefits.  Portable benefits are a key component of a modernized employment system.  By making it easier for workers to access benefits like healthcare, sick leave, and training, portable benefits can help states create a more resilient and tech-savvy workforce as we emerge from the COVID-19 crisis.”

Draft text of the proposed bill is available here.


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