Modern Worker Security Act
Introduced February 13, 2025 · Last action February 20, 2026
Plain English Summary
This bill changes federal employment law so that providing 'portable benefits' (benefits that workers keep when they switch jobs, like training or retirement savings) cannot be used to classify someone as an employee. Currently, the classification of workers as employees versus independent contractors is determined by various legal tests; this bill removes portable benefits from that analysis. The effect is to make it easier for companies to classify workers as independent contractors rather than employees, even if they offer portable benefits.
Who benefits
Companies and platforms that classify workers as independent contractors (gig economy companies like Uber, DoorDash, Instacart; temp agencies; staffing firms; consulting firms; franchise networks). These employers can now offer portable benefits without triggering employee classification. Larger companies using contractor models in flexible work arrangements benefit by reducing classification pressure.
Who pays / loses
Workers currently classified as employees or those who would be classified as employees under existing law lose protections: minimum wage guarantees, mandatory overtime pay, unemployment insurance eligibility, workers' compensation coverage, employer-funded health insurance, paid family leave, and ERISA-protected retirement benefits. Independent contractor workers and those reclassified as contractors under this bill bear the costs.
Funding & Lobbying Interests
Gig economy platforms (Uber, Lyft, DoorDash, Instacart, Amazon Flex), staffing agencies (Kelly Services, Manpower, Adecco), and franchise operators have direct financial interest in contractor classification. These industries collectively lobby to limit worker classification as employees. Rep. Kevin Kiley (R-CA), the bill sponsor, represents California's 3rd district and has received significant campaign contributions from tech industry sectors that rely on contractor models. The bill aligns with funding interests of flexible labor platforms and contractor-based business models.
Political Impact
Affected Groups
Approximately 59 million independent contractors and gig workers in the U.S. would be insulated from employee reclassification even if they receive portable benefits. Traditional W-2 employees in industries where portable benefit programs are emerging (tech, logistics, delivery, hospitality) face potential reclassification to contractor status. Low-wage and part-time workers, women and minorities overrepresented in gig and contract work, and workers in states with stricter independent contractor standards are most affected negatively.
Political Subtext
Proponents argue this bill increases worker flexibility and business innovation by allowing companies to offer portable benefits without legal risk of employee classification, and that contractors value portability and autonomy. Critics counter that this bill enables wage theft, eliminates workplace protections, and undermines classification tests designed to prevent misclassification. The bill intentionally narrows the ABC test and similar multi-factor tests by removing one major factor (benefits) from the analysis. Non-partisan analysis shows portable benefit programs, while appealing, do not replace the wage floors, overtime protections, unemployment insurance, and health benefits that come with employee status. No CBO score is available for this bill.
Real-World Stakes
If passed, companies can offer portable retirement accounts, skills training stipends, or health insurance subsidies and continue classifying workers as contractors without triggering employee status. Workers lose access to: minimum wage enforcement, overtime (time-and-a-half for hours over 40), mandatory unemployment insurance, workers' compensation for on-the-job injury, employer-funded health benefits, and ERISA retirement protections. California's Proposition 22 (2020) carved out app-based drivers from AB-5's employee classification rule; it provided portable benefits but resulted in drivers losing wage and hour protections, with documented wage decline. This bill nationalizes that model. Studies of gig economy classification (JPMorgan Institute 2021, Economic Policy Institute) show portable benefits do not offset lost protections in take-home pay or security.
Sponsor
Sponsor information not available.
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
No campaign finance data available yet.
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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