STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Assemblywoman BRITNEE N. TIMBERLAKE
District 34 (Essex and Passaic)
Assemblywoman CAROL A. MURPHY
District 7 (Burlington)
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
SYNOPSIS
Establishes system for portable benefits for workers who provide services to consumers through contracting agents.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
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.
“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. “Worker” shall not mean:
a. any person who contracts to solicit orders in New Jersey as the sales representative of a principal; or
b. any person subject to a collective bargaining agreement that specifies wages, terms and conditions of employment.
2. a. Contracting agents that have facilitated the provision of services by at least 50 individual workers in a consecutive 12-month period shall contribute funds to qualified benefit providers 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) The contribution amount shall be the lesser of 25 percent of the total fee collected from the consumer for each transaction of services provided or six dollars for every hour that the worker provided services to the consumer. If determined per hour, then the determination shall be prorated per minute.
(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 workers’ compensation insurance pursuant to chapter 15 of Title 34 of the Revised Statutes to those workers entitled to benefits based on contributions made under section 2 of this act.
c. In addition to workers’ compensation 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.
d. Qualified benefit providers may use up to five percent of the contribution funds received for administration of benefits.
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. 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.
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.
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 for the provision of portable benefits to workers who provide services to consumers through contracting agents. Pursuant to the bill, a contracting agent is a business entity that facilitates the provision of services by workers to consumers seeking the services and makes payments to workers, and the provision of services is taxed as an independent contractor.
The bill requires contracting agents that have facilitated the provision of services by at least 50 individual workers in a consecutive 12-month period to contribute funds to qualified benefit providers to provide benefits to the workers of the contracting agents. The requirement to contribute funds only applies when the services are provided to consumers located in this State.
The contribution amount must be the lesser of 25 percent of the total fee collected from the consumer for each transaction of services provided or six dollars for every hour that the worker provided services to the consumer. If determined per hour, then the determination must be prorated per minute. The contribution amount required under this bill may be added to the invoice or billing submitted to the consumer for the services.
The bill requires contributions to 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. Contributions must indicate the assigned amount per worker per transaction.
Based on the contributions received, qualified benefit providers are to ensure that benefits are provided to workers as set forth in the bill. Qualified benefit providers must provide workers’ compensation insurance to those workers entitled to benefits based on contributions.
In addition to workers’ compensation insurance, qualified benefit providers must provide some or all of other, optional benefits. Qualified benefit providers must solicit input from workers on their benefits, and 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 bill provides that qualified benefit providers may use up to five percent of the contribution funds received for administration of benefits.
A worker entitled to benefits under the bill must select a qualified benefit provider and must be given the option to change that selected qualified benefit provider once per year. Workers are to be provided information regarding available qualified benefit providers in a format that allows them to easily select their chosen qualified benefit provider.
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 are 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 action of the organization regarding providing benefits must be for the sole purpose of maximizing benefits to the covered workers;
(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 adequate 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 demonstrated competencies as determined by the department.
The bill requires the Department of Labor and Workforce Development 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 for workers, and providing procedures for workers to select and change qualified benefit 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 also provides that the requirements on contracting agents and the benefits provided to workers are not to be considered in determinations of a worker’s employment status or a contracting agent’s employment relationship to the worker under the State unemployment law.
The bill provides that any person who contracts to solicit orders in New Jersey as the sales representative of a principal or any person who is subject to a collective bargaining agreement that specifies wages, terms and conditions of employment is not subject to the requirements of the bill.