Delivery network couriers and transportation network drivers, Department of Financial Institutions’ approval to offer portable benefit accounts, providing for insurance coverage, modifying administrative rules related to accident and sickness insurance, and granting rule-making authority. (FE)
Impact
The legislation introduces portable benefit accounts for eligible drivers, which can be funded by both the drivers themselves and the network companies. Contributions could be used for multiple purposes, including compensating for lost income due to illness or other qualifying events. Furthermore, the bill allows network companies to provide group accident and sickness insurance, potentially offering drivers protection and support during periods of injury or illness. While this aims to provide more security for drivers, the model raises questions about the adequacy of benefits and support compared to full employee status.
Summary
Senate Bill 256, introduced in the 2025 legislative session, focuses on the classification and benefits for application-based drivers working with delivery and transportation network companies. The bill states that under certain conditions, these drivers are not considered employees for purposes related to worker's compensation, minimum wage, and unemployment insurance. Specifically, if the network companies refrain from controlling the work logistics of their drivers, those drivers maintain their status as independent contractors, which has implications for their rights and benefits compared to traditional employees.
Contention
A contentious aspect of SB256 revolves around the balance of protections afforded to drivers versus the flexibility that network companies seek. Proponents argue that this framework fosters a gig economy that allows for more flexibility and job opportunities. In contrast, critics contend that the bill may diminish workers' rights by sidelining the employee classification, which could ultimately leave drivers without crucial benefits. If challenged in court, there is potential for the non-employment provisions related to the application-based driver classification to be deemed invalid, which could undermine the bill's effectiveness.
Delivery network couriers and transportation network drivers, Department of Financial Institutions' approval to offer portable benefit accounts, providing for insurance coverage, modifying administrative rules related to accident and sickness insurance, and granting rule-making authority. (FE)
Delivery network couriers and transportation network drivers, Department of Financial Institutions' approval to offer portable benefit accounts, providing for insurance coverage, modifying administrative rules related to accident and sickness insurance, and granting rule-making authority. (FE)
Delivery network couriers and transportation network drivers, Department of Financial Institutions’ approval to offer portable benefit accounts, providing for insurance coverage, modifying administrative rules related to accident and sickness insurance, and granting rule-making authority. (FE)
Delivery network couriers and transportation network drivers, Department of Financial Institutions' approval to offer portable benefit accounts, providing for insurance coverage, modifying administrative rules related to accident and sickness insurance, and granting rule-making authority. (FE)
Delivery network couriers and transportation network drivers, Department of Financial Institutions' approval to offer portable benefit accounts, providing for insurance coverage, modifying administrative rules related to accident and sickness insurance, and granting rule-making authority. (FE)
Delivery network companies required to create portable benefits accounts for app-based drivers, companies required to purchase occupational accident insurance, income tax treatment of contributions to and distributions from portable benefits accounts provided, and rulemaking authorized.