Murphy Smith spent four years unemployed in Eugene, Oregon, sidelined by severe asthma that made most jobs impossible. In 2024, he found rideshare driving, work he could do without triggering his condition. But without a guaranteed minimum wage or employer benefits, he now drives 12 to 16 hours a day just to support himself. “Once the buses shut down, we’re who they call,” he said.
Smith is one of more than 70 million Americans who now earn income through freelancing, contracting, or gig work. They design websites, drive for rideshare apps, consult for Fortune 500 companies, care for children and older adults, and deliver groceries to doorsteps nationwide. Together, they generate roughly $1.5 trillion annually in economic activity. Yet for all their contributions, they remain locked out of the benefits system that has defined American employment for generations.
According to the Financial Health Network, workers whose primary income comes from nontraditional employment are significantly less financially healthy than their traditionally employed counterparts, with less than half having enough savings to cover three months of living expenses. Statista reports that 27 percent of gig workers for whom such work is their main job have no retirement savings at all. Without employer-sponsored healthcare or paid leave, a single medical emergency can unravel years of careful financial planning. A three-day hospital stay averages $30,000. A freelance writer who gives birth may be back at her laptop within days, because no law guarantees her any paid leave.
The American workforce has transformed, but the safety net has not. As 2026 begins, California has become the second state to let rideshare drivers unionize, part of a wave of state-level experiments that may finally be catching up.
A System Built for Another Era
America’s employer-based benefits system emerged by accident, not design. During World War II, the Roosevelt administration imposed wage and price controls to curb inflation, but in 1943 the War Labor Board ruled that health insurance contributions wouldn’t count as wages. Companies facing labor shortages and unable to raise pay began offering medical coverage instead, and by the end of the war, the number of Americans with health insurance had tripled. When Congress made employer-provided benefits permanently tax-exempt in 1954, it cemented an arrangement built for a world of lifetime employment that no longer exists.
Few do anymore, yet most independent workers say they prefer their arrangement to traditional W-2 employment, valuing the autonomy to set their own schedules and choose their own clients. Current law treats insecurity as the price of that freedom, forcing freelancers into impossible choices about healthcare, savings, and how to survive a slow month.
Under a portable benefits system, a freelancer juggling five clients could receive contributions from all of them into a single account, building toward healthcare, retirement, or paid leave regardless of how the work is structured. In construction, multiemployer pension plans have followed workers from job to job for decades. In New York, the Black Car Fund has covered for-hire drivers since 1999. But scaling these models to reach 70 million independent workers has proved elusive.
Cities and States Step Up
For years, federal legislation on portable benefits has stalled in Congress. The Portable Benefits for Independent Workers Pilot Program Act, a modest bill to fund state-level experiments, was introduced in 2017, reintroduced in 2019, and again in 2023, but never passed. In the absence of congressional leadership, states and cities have stepped into the gap, experimenting with strategies that range from payment protections to minimum wage laws to collective bargaining framework.
New York City pioneered the Freelance Isn’t Free Act in 2017, requiring written contracts for freelance work over $800 and mandating timely payment with penalties for violations. Seattle, Minneapolis, Los Angeles, and Columbus soon enacted similar protections, and in 2024, both Illinois and New York State passed statewide versions extending the safeguards to millions more workers. California followed with its own Freelance Worker Protection Act in January 2025. By December 2023, New York had also become the first major city to implement a minimum pay rate for app-based delivery workers, now set at $21.44 per hour before tips. Before the law, workers averaged just $5.39 per hour; since enforcement began, apps have paid an additional $700 million in wages. In July 2025, the City Council voted to extend those protections to grocery delivery workers.
Seattle has emerged as a national leader in gig worker protections. Its “PayUp” package, which began rolling out in January 2024, includes minimum pay, paid sick time, transparency requirements that give workers upfront information before accepting offers, and the right to refuse jobs without penalty. As of January 2025, the city also requires companies to provide 14 days’ notice and a clear appeals process before deactivating a worker from their platform.
Before the minimum pay law, workers averaged just $5.39 per hour; since enforcement began, apps have paid an additional $700 million in wages.
On portable benefits specifically, Utah broke through in 2023 as the first state to pass a voluntary law, establishing a framework for companies to contribute to independent contractors’ benefits accounts without triggering reclassification. For years, companies had feared that offering benefits to contractors would expose them to lawsuits alleging those workers were actually employees. After Utah’s success, Alabama and Tennessee passed similar legislation in April 2025. Florida also introduced House Bill 1067 to establish voluntary portable benefits accounts but it died in subcommittee. And in August 2025, Wisconsin’s governor vetoed Assembly Bill 269, which would have created portable benefits for drivers, underscoring how even popular ideas face political headwinds.
Two states have focused on organizing rights instead, empowering gig workers to negotiate for benefits themselves. In November 2024, Massachusetts voters approved Question 3 with 54 percent of the vote, making the Commonwealth the first state to let rideshare drivers unionize, building on a landmark settlement with Uber and Lyft that had already established a $32.50 minimum hourly wage. By December, the App Drivers Union had gathered enough signatures to meet the 5 percent threshold required to begin organizing and is working toward the 25 percent needed for certification. California’s AB 1340 took effect January 1, 2026, extending collective bargaining rights to roughly 800,000 rideshare drivers who could vote to unionize as early as May. Together, these laws represent a novel hybrid, preserving the flexibility workers say they want while creating a mechanism for collective power.
Some states with large gig workforces have yet to pass meaningful protections. Florida, where 22 percent of workers do gig work, saw a portable benefits bill introduced but not passed. Texas, where gig workers make up 18 percent of the workforce, has not enacted statewide protections.
The Federal Debate
In July 2025, Senate HELP Committee Chair Bill Cassidy and Senators Tim Scott and Rand Paul introduced legislation to modernize federal labor law for independent workers. At the center of their proposal, the Unlocking Benefits for Independent Workers Act would create a federal safe harbor for companies that contribute to portable benefits accounts, protecting them from worker classification lawsuits, while companion bills would let independent workers join pooled employer retirement plans and band together to purchase health insurance.
For labor advocates, the proposals amount to a corporate giveaway that would make it easier for companies to misclassify workers as contractors and avoid paying decent wages and benefits. At a Senate hearing on the legislation, Timothy Driscoll, president of the International Union of Bricklayers and Allied Craftworkers,warned that the safe harbor would leave workers “without the basic protections of the Fair Labor Standards Act” and make it “next to impossible” for them to form unions or bargain collectively.
In response, Senator Bernie Sanders introduced the Pensions for All Act the same day as the hearing. Where the Republican package would ask companies to voluntarily contribute to portable benefits accounts, Sanders’ bill would require corporations to provide traditional pension plans equivalent to those enjoyed by members of Congress, or pay into the federal retirement system on workers’ behalf. Neither proposal has advanced since.
Federal portable benefits legislation could reshape the relationship between companies and the workers who power their platforms, offering a genuine third path between the precarity of contractor status and the rigidity of traditional employment. But they could just as easily entrench a two-tiered labor market in which corporations enjoy all the flexibility of a contract workforce while workers bear all the risk.
Company Pilots and Their Limits
While legislators debate, some companies have begun experimenting on their own. In April 2024, DoorDash launched a portable benefits pilot in Pennsylvania, partnering with Stride Health to offer delivery workers savings accounts for healthcare, retirement, or paid time off. Workers who earned at least $1,000 before tips in a quarter were eligible, with DoorDash contributing 4 percent of their pre-tip earnings. Eight months later, Lyft announced a more generous pilot in Utah, contributing 7 percent of eligible drivers’ quarterly earnings, the first portable benefits program in the rideshare industry.
DoorDash reported delivering over $1.3 million in benefits to workers who previously had none, with 77 percent of participants saying they felt more financially secure. Encouraged by those numbers, the company expanded to Georgia in April 2025 and Maryland in July, enrolling roughly 5,500 workers who reported similar results. In Massachusetts, Uber and Lyft began offering health stipends in July 2025 as part of their settlement with the state.
These pilots, however promising, are temporary, and turning them into permanent programs hinges on legislative action. In DoorDash’s Pennsylvania survey, 91 percent of participants said they would feel even more secure if the program became a lasting fixture rather than a temporary experiment.
But even at Lyft’s more generous rate, the contributions still fall short. DoorDash’s average monthly contribution to worker accounts was just $31, roughly the cost of two weeks of coffee. That won’t cover a single urgent care visit, let alone build retirement savings. And paltry savings accounts, no matter how well-intentioned, are no substitute for insurance-based benefits that pool risk across large groups of workers.
Voluntary, company-funded programs offer something, but they leave workers dependent on corporate generosity, with no floor beneath them or guarantee of lasting security. Nor do they resolve the thornier question of whether the workers powering these platforms should have been classified as employees all along.
Beyond the Binary
For all the political wrangling, independent workers themselves have been remarkably consistent about what they want. According to the Bureau of Labor Statistics, 80.3 percent prefer to remain independent; only 8.3 percent say they would choose W-2 employment. Yet 80.1 percent also want access to portable benefits. In other words, they are not asking to be reclassified or left exposed. They are asking for a safety net that respects their autonomy rather than demanding they sacrifice it.
For workers who rely on gig income to make ends meet, building savings and accessing credit prove more difficult than for traditional employees, and the common workaround of coverage through a spouse’s employer isn’t available to most.
80.3 percent prefer to remain independent; only 8.3 percent say they would choose W-2 employment. Yet 80.1 percent also want access to portable benefits.
Yet for any of this to matter, the details have to be right. A system that genuinely serves workers would require contribution floors companies can’t opt out of, along with collective bargaining mechanisms like those California’s new law begins to allow. It would demand transparency from the platforms that profit from flexible labor and vigorous enforcement against misclassification, ensuring that portable benefits supplement worker protections rather than substitute for them. In California, 800,000 rideshare drivers could vote to unionize as early as May; how that unfolds will shape the debate for years to come.
Behind the statistics are 70 million people trying to build lives of dignity and security in an economy that has outpaced the institutions meant to protect them. Murphy Smith logs 16-hour days in Oregon because no minimum wage law says he doesn’t have to. He’s one of the millions who built this economy. It’s past time it included them.
Reporting Note
This article draws on labor reporting, academic research, government data, and policy analysis to examine how the U.S. safety net has failed to keep pace with the rise of freelance and gig work. It combines economic data, labor law scholarship, and comparative policy analysis with reporting on state, local, and federal efforts to establish portable protections for independent workers.
