States explore benefits for gig economy workers

As freelance work, side hustles, and the gig economy continue to grow, the question of employee benefits has taken center stage. 

During the John Locke Foundation’s 2026 Carolina Liberty Conference, David Iglesias from the Libertas Institute discussed the importance of making benefits portable for those who are not traditional W-2 employees. 

According to data from the US Bureau of Labor Statistics, more than 11.9 million Americans identify independent contracting as their primary form of employment, representing about 7.4% of the U.S. labor force. 

One of the biggest challenges facing independent contractors is the lack of access to traditional employer-provided benefits. Unlike W-2 employees, many freelancers and gig workers must secure their own health insurance and save independently for retirement, often without access to employer-sponsored plans like 401ks or health coverage. As the independent workforce grows, policy discussions increasingly focus on how to expand portable benefit options that follow workers from job to job rather than being tied to a single employer. 

“I don’t think it’s a secret, America’s workforce is becoming increasingly independent,” said Inglesias. “Since COVID, we’ve seen more people working remotely, pursuing self-employment, and taking greater control over their schedules and work arrangements.”

North Carolina’s 2025 small business profile from the US Small Business Administration’s Office of Advocacy reports nearly 915,000 solo businesses statewide. 

Companies are often hesitant about offering benefits to contractors because it can raise questions about worker classification. If a contractor is treated like a traditional employee, regulators or courts could determine the worker is actually an employee. That reclassification can expose companies to back wages, payroll taxes, overtime, and other penalties, which is why many businesses avoid offering benefits unless the law clearly allows it without creating an employer employee relationship. 

Since 2023, several states have begun exploring portable benefits for contract workers, with some passing legislation and others launching pilot programs. Iglesias pointed to Utah, Pennsylvania, and Georgia as examples. 

Utah‘s Portable Benefit Plan

In 2023, Utah passed S.B. 233, the Portable Benefit Plan, creating a legal framework that allows companies to voluntarily contribute to portable benefits for independent contractors without risking worker reclassification. The law makes clear that offering benefits, such as health coverage, retirement savings, or paid time off, does not create an employer-employee relationship, giving businesses legal certainty while expanding benefit options for gig workers. 

Pennsylvania pilot program

In April of 2024, a 12-month pilot program began in Pennsylvania, which was used by more than 4,000 contractors who work with DoorDash, the popular food delivery company. According to Iglesias, approximately 66% of the participants didn’t have access to benefits that they wanted or needed additional access to benefits. 

“77% of participants felt more financially secure, and then 91% said they would feel even more secure if the pilot were made permanent,” said Iglesias. “62% of participants now have interest-bearing savings accounts that they did not have previously. So, pretty good outcome.” 

Georgia 

In January of 2025, a 6-month pilot program began in Georgia, which included more than 5,500 DoorDash contractors. Nearly 75% of respondents who did not already have access to benefits that they wanted or needed gained access to benefits they would not otherwise have. 

“73% said they felt more financially secure, with similarly 91% feeling, saying they would feel more secure if those were made permanent,” Iglesias told the group. “61% of respondents now have interest-bearing savings accounts that did not have otherwise.” 

Using data from pilot programs and research, Iglesias said one thing is clear, contractors overwhelmingly want to take advantage of benefits when they are available. 

“80% of independent contractors want portable benefits while remaining independent. So to them, this is important that they maintain that flexibility, and they don’t give up that status as an independent contractor,” Iglesias said. And so getting these portable benefits should not come at the expense of that independence for them.” 

“States explore benefits for gig economy workers” was originally published on www.carolinajournal.com.