S1753

An Act concerning portable benefits for certain workers and supplementing Title 34 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

“Contracting agent” means a business, organization, corporation, limited liability company, partnership, sole proprietor, or any other entity that facilitates the provision of services by workers to consumers seeking the services and makes payments to workers, where the provision of services is taxed as an independent contractor, using Form 1099.

“Department” means the Department of Labor and Workforce Development.

“Digital marketplace network” means any online-enabled technology application, service, website, or system offered or utilized by a contracting agent to enable the transaction of services between workers and consumers.

“Individual portable benefits account” means an individual account created and maintained by a qualified benefit provider on behalf of a qualified worker into which a contracting agent makes contributions pursuant to this act.

“Principal” means a person or company engaged in the business of manufacturing, who:

a. manufactures, produces, imports, or distributes a product for wholesale;

b. contracts with a sales representative to solicit orders for the product; and

c. compensates the sales representative in whole or in part by commission.

“Qualified benefit provider” means a nonprofit benefit provider that is eligible to provide benefits to workers of contracting agents pursuant to this act.

“Worker” means a person who provides services to consumers through a contracting agent, who works 40 or more hours per month in providing those services through the contracting agent. “Worker” shall not mean:

a. any person who contracts to solicit orders in New Jersey as the sales representative of a principal;

b. any person subject to a collective bargaining agreement that specifies wages, terms and conditions of employment;

c. any person engaged in the sale of financial products or services;

d. any person who is licensed by the New Jersey Real Estate Commission pursuant to R.S.45:15-1 et seq.; or

e. any person who is a licensed health care professional.

2. a. Contracting agents that have facilitated the provision of services by individual workers through a digital marketplace network shall contribute funds to individual portable benefits accounts created and maintained by qualified benefit providers designated by the workers to provide benefits to the workers of the contracting agents. The requirement to contribute funds under this act only applies when the services are provided to consumers located in this State.

b. (1) A contracting agent shall contribute to the individual portable benefits account of a worker an amount not less than 15 percent of the amount the worker earned providing services through the contracting agent during the immediately preceding month.

(2) The contribution amount required under this section may be added to the invoice or billing submitted to the consumer for the services.

c. Contributions shall be made to the qualified benefit provider on no less than a monthly basis and no later than 15 days after the end of the month in which the services were provided.

d. Contributions shall indicate the assigned amount per worker per transaction, according to the following:

(1) if a single worker provided services for a transaction, the entire contribution is assigned to that worker; or

(2) if multiple workers provided services for a transaction, the contribution is assigned proportionately to those workers.

3. a. Based on the contributions received under section 2 of this act, qualified benefit providers shall ensure that benefits are provided to workers as set forth in this section.

b. Qualified benefit providers shall provide to any worker entitled to benefits based on contributions made under section 2 of this act workers’ compensation insurance as required pursuant to chapter 15 of Title 34 of the Revised Statutes, or, if the workers’ compensation insurance is not required for the worker, occupational accident insurance which satisfies the minimum standards for that insurance established by regulations promulgated by the Commissioner of Banking and Insurance.

c. In addition to workers’ compensation insurance or occupational accident insurance, qualified benefit providers shall provide some or all of the benefits set forth in this subsection. Qualified benefit providers shall solicit input from workers on their benefits, and shall allow workers to choose from available benefits or allocate the contributions among the following benefits:

(1) health insurance, including but not limited to subsidies to purchase health insurance;

(2) paid time off;

(3) retirement benefits; and

(4) other benefits determined by the qualified benefit providers, on behalf of the workers.

The worker may elect to not receive any of the benefits indicated in paragraphs (1) through (4) of this subsection, in which case an amount equal to one half of the contribution required pursuant to subsection b. of section 2 of this act shall be provided as compensation to the worker.

d. Qualified benefit providers may use up to five percent of the contribution funds received for administration of benefits.

e. No provision of this act, or any regulations promulgated to implement or enforce this act, shall be construed as requiring a contracting agent to reduce, or justifying the contracting agent in reducing, rights or benefits provided by the contracting agent pursuant to law or a policy or previous practice of the contracting agent, including any law, policy or practice which is or was more favorable to workers than those required by this act or which provide rights or benefits to workers not covered by this act.

4. A worker entitled to benefits under this act shall select a qualified benefit provider and shall be given the option to change that selected qualified benefit provider once per year at a time consistent with the annual open enrollment period for health insurance programs. Workers shall be provided information regarding available qualified benefit providers in a format that allows them to easily select their chosen qualified benefit provider.

5. The department shall adopt rules for organizations to become qualified benefit providers. At a minimum, the rules governing qualified benefit providers shall require that the following criteria are met:

a. the organization shall be a nonprofit organization, operating under 26 U.S.C. s.501(c)(3) federal tax status;

b. at least one-half of the organization’s board of directors shall be comprised of workers performing work for customers of contracting agents or representatives of bona fide independent organizations of those workers;

c. the organization shall be independent from all business entities, organizations, corporations, or individuals that would pursue any financial interest in conflict with that of the workers;

d. all action of the organization regarding providing benefits shall be for the sole purpose of maximizing benefits to the covered workers;

e. the board of directors of the organization shall hold a fiduciary duty to the workers with respect to provision of the benefits; and

f. the organization shall demonstrate adequate viability and financial sufficiency as determined by the department. At a minimum, the organization shall have:

(1) cash reserves in a sufficient amount, as determined by the department;

(2) liability coverage for an amount determined by the department;

(3) access to bonding; and

(4) other demonstrated competencies as determined by the department.

The department shall prepare, post on its website, and make available upon request, a list of qualified benefit providers, and shall update the list not less than one time each calendar year after the year in which it is first prepared.

6. The department shall establish rules to implement and administer this act, including rules for:

a. monitoring compliance of contracting agents;

b. monitoring qualified benefit providers, including the ability to remove providers that are out of compliance with the criteria established under this act;

c. establishing a fee on contracting agents to fund the department’s compliance efforts;

d. administering workers’ compensation coverage for workers under this act; and

e. providing procedures for workers to select qualified benefit providers, to change their selections annually, and to receive notices of the right to select different qualified benefit providers.

The Commissioner of Banking and Insurance shall promulgate regulations to implement and administer minimum standards for occupational accident insurance under this act.

7. In addition to remedies provided by the department to a worker for a contracting agent’s noncompliance, a worker may bring a private cause of action against a contracting agent for the contracting agent’s failure to comply with the contribution requirements under section 2 of this act.

8. The requirements on contracting agents and the benefits provided to workers under this act shall not be considered in determinations of a worker’s employment status or a contracting agent’s employment relationship to the worker under R.S.43:21-19.

9. This act shall take effect on the sixth month next following enactment, except the Commissioner of Labor and Workforce Development may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.

STATEMENT

This bill establishes a system to provide portable benefits to workers who work 40 or more hours per month to provide services to consumers facilitated by contracting agents through digital marketplace networks. The bill defines a “contracting agent” as a business entity that facilitates the provision of services by workers to consumers and makes payments to workers, with the workers providing the services being taxed as independent contractors, and defines “digital marketplace network” as an online-enabled technology application, service, website, or system offered or utilized by a contracting agent to enable the transaction of services between workers and consumers. Workers covered by the bill do not include certain sales representatives, licensed healthcare professionals and persons subject to collective bargaining agreements.

The bill requires contracting agents that facilitate the provision of services through a digital marketplace network to contribute funds through individual portable benefits accounts to qualified benefit providers to provide benefits to the workers. The requirement to contribute funds only applies if the services are provided to consumers located in this State.

A contracting agent is required to contribute to the individual portable benefits account of a worker an amount not less than 15 percent of the amount the worker earned providing services through the contracting agent during the immediately preceding month. The bill requires contributions to be made on no less than a monthly basis and not later than 15 days after the end of the month in which the services were provided.

Qualified benefit providers are required to use the contributions to provide benefits to workers as set forth in the bill. The providers are required to provide workers’ compensation insurance to workers entitled to workers’ compensation benefits, and other approved occupational accident insurance to workers who are not entitled to workers’ compensation benefits.

In addition to workers’ compensation insurance or occupational accident insurance, qualified benefit providers must provide some or all of the following benefits, as selected by the workers: health insurance, paid time off, retirement benefits, or other benefits determined by the providers, except that if a worker elects not to receive any of those benefits, an amount equal to one half of the contribution is to be provided as compensation to the worker. Up to five percent of the contributions may be used for administration.

A worker entitled to benefits under the bill must select a qualified benefit provider and be allowed to change the qualified benefit provider once per year.

The bill requires the Department of Labor and Workforce Development to adopt rules for organizations to become qualified benefit providers. At a minimum, the rules governing qualified benefit providers must require that the following criteria to be met:

1. the organization must be a nonprofit organization, operating under 26 U.S.C. s.501(c)(3) federal tax status;

2. at least one-half of the organization’s board of directors must be comprised of workers performing work for customers of contracting agents or representatives of bona fide independent organizations of those workers;

3. the organization must be independent from all business entities, organizations, corporations, or individuals that would pursue any financial interest in conflict with that of the workers;

4. all actions of the organization regarding worker benefits must be for the sole purpose of maximizing those benefits;

5. the board of directors of the organization must hold a fiduciary duty to the workers with respect to provision of the benefits; and

6. the organization must demonstrate viability and financial sufficiency as determined by the department. At a minimum, the organization must have cash reserves, liability coverage, access to bonding, and any other competencies as determined by the department.

The bill requires the department to establish rules to implement and administer the bill, including rules for monitoring contracting agents and qualified benefit providers, establishing fees on contracting agents to fund compliance efforts, administering workers’ compensation coverage, and providing procedures for workers to select and change providers.

In addition to remedies provided by the department to a worker for a contracting agent’s noncompliance, a worker may bring a private cause of action against a contracting agent for the contracting agent’s failure to comply with the bill’s contribution requirements.

The bill specifies that it is not to be construed as requiring a contracting agent to reduce, or justifying the contracting agent in reducing, rights or benefits provided by the contracting agent pursuant to law or a policy or previous practice of the contracting agent, including any law, policy or practice which is or was more favorable to workers than those required by this act or which provide rights or benefits to workers not covered by the bill.

The bill also provides that the bill’s requirements on contracting agents and the benefits provided to workers may not be considered in determinations of a worker’s employment status under the State unemployment law.