Modernizing WIOA: How to Include the 41 Million Workers Missing from the Reauthorization Bill

As many as 41 million people regularly rely on flexible work arrangements, including gig, contingent, and contract work, a number that has grown in recent years. These workers are more likely to be Black, Latino, parents, and older than traditional W-2 workers. While there are some advantages to gig work—particularly the flexibility around when and how long to work—these workers are make less than their state minimum wage, platform algorithms often result in wage theft, and gig workers are more likely to be injured on the job. These workers have no right to overtime pay, unemployment insurance, or workers’ compensation.

The reauthorization of the Workforce Innovation and Opportunity Act (WIOA) gives Congress a chance to meet the needs of both gig workers and the businesses that contract them. Many workers take on flexible work when they need to care for children or elderly parents, attend school, deal with job loss or the reduction of job hours, or supplement a creative job. The Workers Lab and New America Chicago research with workers in California, New York, and Chicago has shown an interest in flexible work from both workers and businesses. Because of this shared interest, there is the potential for a compromise that meets the needs of both and allows for bipartisan movement on the issue.

A New Approach

A new model tested in the UK and by local workforce leaders in Long Beach, California, Portland, Oregon, and soon Chicago, Illinois allows workforce boards or nonprofits to serve as an employer of record, combining smaller jobs from multiple employers in order to provide flexible workers with W-2s instead of 1099s. This allows workers to aggregate simple benefits over multiple sources of income, and could allow them to apply for loans, tax credits, and other supports. Businesses and other organizations are able to get help for nonstandard work, while contributing to more stable work and benefits for workers, at a reasonable cost. The preliminary results show that when workers are given technology and support, they can maintain control over their schedules, finding more consistent work over multiple gigs.

Unfortunately, current WIOA language is silent on these types of workers. Without clear permission, risk-averse workforce boards will avoid creative solutions for flexible workers for fear of not receiving funding or facing a funding clawback for work they have already completed. Clear language that encourages boards to test out new approaches such as the Long Beach model is needed or the status quo will continue.

Recommendations

WIOA language needs to be updated to ensure that flexible workers can access training and support through the workforce development system. Here are four simple changes to WIOA that would allow for material improvements in working conditions and financial stability for these workers, while also supporting businesses with a legitimate need for nonstandard work:

Allow flexible workers access to career services and training.

• Allow workers, including veterans, who are employed in flexible work but underemployed to receive assistance by:
  • Adding a definition of underemployed that specifically references individuals with alternative or flexible work arrangements who are in need of additional work in WIOA Section 3.
  • Including underemployed workers in the list of individuals with barriers to employment in WIOA Section 3(24). Add the words “underemployed or” after the word “Long-term” in WIOA section 3(24)(M).
• Clearly allow jobseekers, including dislocated workers, to complete part-time or flexible work to make ends meet without penalty while they receive career services and training, including workers in adult education programs through Title II.
• Add “including those who are long-time unemployed or underemployed” to Section 134(c)(3)(E) of WIOA stipulations as to who receives priority for funds allocated to a local area for adult employment and training activities.
• Gather information and recommendations on job flexibility for workers with disabilities and older workers. We recommend that congressional staff obtain this information from policy experts and individuals with these identities, since any well-designed solution will also better meet the needs of workers in these two categories.

Ensure that individuals caring for family members have access to flexible work, career services, and training.

• Keep references to displaced homemakers that allow services for people who are providing unpaid care to family members and are underemployed. Allow eligibility for those whose family income has been significantly reduced who don’t qualify for WIOA Section 3(16)(A)(i) or (A)(ii). Expand the definition in WIOA Section 3(16) to include individuals who are caring for family members not living in the same home.
• Add those who are caring for family members to the list of individuals with a barrier to employment in WIOA Section 3(24).

Encourage states to test out workforce boards or nonprofits as employers of record.

• Fund a demonstration project to test the idea of allowing workforce boards, municipalities, large employers, and worker-focused nonprofits to act as an employer of record, aggregating flexible work and providing workers with benefits and a unified W-2.
• Include new language that allows these entities to act as the employer of record for flexible workers under allowable employment and training services in WIOA Sections 121, 134(a)(2)(B)(i), 134(a)(3)(A), and/or 134(d); add the words “flexible workers” to WIOA Section 121(e)(2)(C).

Establish guidelines to learn more about flexible workers in each state.

• Amend federal workforce and labor market collection requirements to add workers engaged in alternative employment arrangements and flexible workers to the list of workers included in data collection. This recommendation is partially included in the A Stronger Workforce for America Act (H.B. 6655), the bipartisan reauthorizing bill that has advanced out of the House Education and Workforce Committee and is awaiting a vote on the House floor.

Flexible workers have been left entirely out of nearly every labor and workforce protection and support in our nation. Leaving 41 million workers, many of whom are our lowest-paid workers, and who are disproportionately people of color, out of the centerpiece of our workforce development system yet again isn’t just an oversight. It’s bad policy that keeps our workforce system stuck in the previous century. The time is well past for ensuring these workers have access to workforce development systems, services, and training for the future of our country.