A Pending New Jersey Bill Would Require Gig Economy Companies to Provide Retirement Benefits

The S.B. 94 Bill was approved by New Jersey Senate Labor Committee on February 13 and is now pending   before the Senate Budget and Appropriations Committee. This bill would require gig economy companies such as Lyft and Uber to provide retirement plan benefits to New Jersey-based workers. Other states like New York and California are working on similar legislation to treat gig workers more like employees instead of  contractors.

Here are some of the highlights of the New Jersey bill:

  • The bill would require “contracting agents” that facilitate the provision of services by at least 50 workers (i.e., independent contractors) over a 12-month period to contribute funds to qualified benefit providers to provide benefits to the workers.
  • The requirement to contribute funds under only applies when the services are provided to consumers located in New Jersey. The contribution amount would  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.
  • Contributions would 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.

In conclusion, the solo 401k plan may be the solution for now while the states and the federal government figure out how to best serve the retirement needs for workers in the gig economy which is estimated to makeup one third of American workforce according to Senator Troy Singleton.  The solo 401k plan is for the self-employed including 1099 contractors and it allows for high pretax contributions.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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