Federal and State Leaders Take Aim at Empowering America’s Flexible Workforce 

In the Spring of 2020 as Americans faced employment disruptions in the COVID era, both traditional and self-employed workers demanded, and needed, more flexibility in work to meet their families’ financial, scheduling, and other needs.  

Whether working parents looking for income while raising children, disabled workers unable to perform traditional jobs, individuals looking for side income, or budding entrepreneurs building clients and customers performing a labor of love under their perfect boss – themselves – the moment where people’s desire for more flexibility and autonomy has become a more permanent shift is here. Technology and societal changes have made new, more flexible career pathways increasingly attractive, even as laws from the 20th century and leaders with dated notions of what employment should look like hinder these pathways.  

In 2023, over 64 million people did some amount of freelancing including tens of millions of people who earn their primary income through independent contracting, and the interest in self-employment continues to rise. Perhaps it’s no surprise then that the U.S. Bureau of Labor Statistics (BLS) found that only approximately 8 percent of independent contractors (ICs) preferred a traditional work arrangement over their self-employed status.  

This is why Americans for Prosperity is working with governmental leaders, businesses, and American workers to make self-employment even more viable for workers, including removing governmental barriers that create unnecessary disadvantages for such workers in acquiring affordable health care and other benefits.  

The good news is that we now have leaders embracing what workers are asking for – a chance to chase opportunity instead of permission. The following are just some of the rising examples. 

In the U.S. House of Representatives, key legislation includes:  

• Representative Kevin Kiley’s (CA) H.R. 1319, the Modern Worker Empowerment Act, which would harmonize an employment test – used for determining if someone is a traditional employee or self-employed – under the National Labor Relations Act (NLRA) and Fair Labor Standards Act (FLSA). Unlike some legislation and regulatory efforts at the federal level to limit self-employment career pathways, the updated, straightforward employment test would better protect and strengthen self-employment and the productive relationships between workers and businesses that play an increasingly critical role in America’s economy.  

• H.R. 1320, the Modern Worker Security Act, would put an end to governmental barriers that prevent businesses from offering voluntary portable benefits to independent contractor clients. This legislation would ensure there are no governmental penalties that put businesses in jeopardy for offering workers voluntary benefits simply because they are not traditional employees of theirs. Without reforms, federal agency employment tests and legal precedents undermine such common sense, non-partisan reforms.     

• Representative Rick Allen’s (GA) H.R. 4154, the Employee Rights Act, which enacts a range of pro-workers reforms in the labor union space but also creates a pro-independent contractor employment test in law and ensures a pro-entrepreneur “joint employer” standard for small businesses that open under franchise models and that serve as vendors to other businesses. This standard would ensure that small businesses and self-employed workers are not legally bound with larger businesses as co-employers for simply engaging in mutually beneficial relationships that all parties are satisfied with.  

• House Education and Workforce Committee Chairman Tim Walberg’s (MI) H.R. 2528, the Association Health Plans Act, which would create legal pathways for small businesses and self-employed workers to join together to offer affordable health care plans under the association health plan (AHP) model.  

In the U.S. Senate, U.S. Senators Bill Cassidy (LA), chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Tim Scott (SC), and Rand Paul (KY) introduced a major pro worker legislative package on July 7, 2025 set on “modernizing federal labor law to empower 27 million independent workers to access portable workplace benefits, like health care and retirement.” There are 4 bills in the package: 

• Senator Cassidy’s Unlocking Benefits for Independent Workers Act: Would ensure federal law allows businesses to provide voluntary benefits to contractors. This includes traditional retirement and health benefits as well as new models like portable benefits accounts that are user directed.  

• Scott’s Modern Worker Empowerment Act: Like Representative Kiley’s House version, this Senate bill creates a permanent pro-worker employment test, in this instance for application of the Fair Labor Standards Act (FLSA) under the Department of Labor (DOL).  

• Paul’s Association Health Plans Act: Like Chairman Walberg’s House version, Senator Paul’s legislation would allow small businesses and self-employed worker to join together under association health plans (AHPs) to access more affordable coverage for workers and their families.   

• Cassidy’s Independent Retirement Fairness Act: Empowers self-employed workers to participate in already existing retirement plan pathways such as pooled employer plans and single employee pension IRAs that current laws and regulations deny to independent contractors.   

However, while federal leaders build support for national reforms to help workers all across America, states are not sitting idle. They know that not only do self-employed workers support greater access to portable benefits, but their residents in general think this warrants policy reforms as well. Instead, many are forging ahead with legal pathways for flexible, portable benefits, maximizing what they can do at the state level in ways that will be further enhanced by federal reforms when they occur. Many states introduced legislation this year to legalize voluntary benefits, but several pioneering states now have laws enacted. These include: 

• Utah, which enacted a portable benefits law, S.B. 233, in 2023 that has since been updated with further improvements.  

• Alabama, which enacted S.B. 86 in April 2025. This portable benefits law goes into effect on December 31, 2025.  

• Tennessee, which enacted HB 494/SB 1377 into law, a voluntary portable benefits framework that is now in effect.  

AFP along with many allies will continue to champion enactment of these reforms around the nation at the federal and state levels, helping to solidify the desirable flexible work career paths our workforce demands while increasing affordable access to benefits that have been undermined too long by governmental barriers.