Bill H.961

HOUSE DOCKET, NO. 3456 FILED ON: 1/20/2023

HOUSE . . . . . . . . . . . . . . . No. 961

By Representative Cahill of Lynn, a petition (accompanied by bill, House, No. 961) of Daniel Cahill relative to establishing portable benefit accounts for app-based-delivery drivers. Financial Services.

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act establishing portable benefit accounts for app-based-delivery drivers.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The General Laws, as appearing in the 2020 Official Edition, are hereby amended by inserting after chapter 175M the following chapter:-

CHAPTER 175N.

PORTABLE BENEFITS FOR APP-BASED-DELIVERY DRIVERS

Section 1. The General Court hereby finds and declares that:

App-based-delivery drivers are providing essential services to their communities. App-based-delivery drivers retain full control over where, when, and how they perform app-based services/work and are therefore classified as independent contractors.

App-based-delivery drivers may not be entitled to some of the protections of an employee. In order to protect these workers, a portable benefits framework for app-based-delivery drivers is created to enable the provision of benefits, such as income replacement, health and wellness, and others, to one worker by multiple delivery platforms. In addition, delivery network companies shall be required to purchase occupational accident insurance and maintain automobile insurance coverage for app-based-delivery workers.

For the foregoing reasons, it is the General Court’s intent that the Director’s actions shall displace competition among delivery network companies in the provision of benefits to app-based-delivery drivers for the purpose of achieving the goals of creating a portable benefits framework for app-based-delivery drivers and occupational accident insurance and automobile insurance requirements for delivery network companies.

Section 2. For the purposes of this chapter, the following words shall have the following meanings:-

“Allocation date”, the date following the last day of a quarter on which a delivery network company makes a quarterly deposit into a portable benefit account, which in no case shall be more than 30 days after such last day.

“App-based-delivery driver”, an individual who provides delivery services within the Commonwealth through a delivery network company’s online-enabled application or platform.

“Delivery network company”, a business entity that maintains an online-enabled application or platform used to facilitate delivery services within the Commonwealth.

“Delivery services”, the fulfillment of a delivery request, meaning the pickup from any location of any item or items and the delivery of the items using a passenger vehicle, bicycle, scooter, walking, public transportation, or other similar means of transportation, to a location selected by the customer located within 50 miles of the pickup location. Delivery services may include the selection, collection, or purchase of items by an app-based-delivery driver, as well as other tasks incidental to a delivery.

“Earnings”, all earnings, including incentives and bonuses: (a) paid to the app-based-delivery driver by the delivery network company; or (b) remitted to the app-based-delivery driver from payment facilitated by a delivery network company, but not including amounts charged for fees, taxes, or other similar charges. Earnings does not include any payments for gratuities.

“Earnings loss”, a decrease of 50 per cent or more in an app-based-delivery driver’s monthly earnings from the previous month that results through no fault of the app-based-delivery driver.

“Eligibility date”, the first day of a quarter, occurring after December 31, 2023, during which an app-based-delivery driver qualifies as an eligible driver.

“Eligible driver”, an app-based-delivery driver whose earnings from, or facilitated by, a delivery network company total at least $1,000 during a quarter. An app-based-delivery driver who qualified as an eligible driver of a delivery network company under this definition shall remain an eligible driver of the delivery network company for three quarters following the initial quarter of eligibility, regardless of the amount of earnings the app-based-delivery driver has during those three quarters. After such time, any such individual may requalify as an eligible driver of the delivery network company at such time as the app-based-delivery driver earnings paid or facilitated by the delivery network company total or exceed $1,000 in a quarter.

“Permissible use”, the use of funds to,

(a) compensate for lost income due to:

(1) an illness or accident;

(2) the birth or adoption of a child of the app-based-delivery driver;

(3) a federal or governor-declared state of emergency;

(4) an earnings loss;

(b) transfer funds to an individual retirement account; or

“Portable benefit account”, a financial account (a) from which amounts may be withdrawn for a permissible use; (b) that meets the requirements of this chapter; and (c) that is administered by a portable benefit account provider.

“Portable benefit account provider”, a bank, as defined in section 1 of chapter 167, or another person who demonstrates to the satisfaction of the commissioner of banks that the manner in which such bank or person will administer the portable benefit account will be consistent with the portable benefit account requirements under this chapter.

“Quarter”, each of the following 4 time periods: (a) January 1 through March 31; (b) April 1 through June 30; (c) July 1 through September 30; (d) October 1 through December 31.

Section 3. (a) A delivery network company shall, by each allocation date, contribute to a portable benefit account of an eligible driver an amount equal to 4 per cent of an eligible driver’s earnings in the immediately preceding quarter earned through that delivery network company.

(b) The first contribution to an eligible driver’s portable benefit account by a delivery network company under subsection (a) shall be made on the first allocation date following such individual’s eligibility date with respect to the delivery network company.

(c) Each delivery network company shall allow an eligible driver to elect to also contribute to the eligible driver’s portable benefit account, and shall deduct the amount elected by the eligible driver from the individual’s earnings and designate such amount for contribution to the portable benefit account.

(d) A delivery network company shall deposit any deductions elected under this subsection (c) into the eligible driver’s portable benefit account on a quarterly basis, no later than 7 days following the allocation date for the quarter.

(e) Contributions made by a delivery network company under subsections (a) or (c) shall be made in cash and, with respect to contributions made under subsection (a), come from the delivery network company’s general assets and not be deducted or drawn from an eligible driver’s earnings.

(f) Any contribution under subsections (a) or (c) shall be made to the default portable benefit account the delivery network company elects on behalf of the eligible driver, unless an eligible driver elects a different portable benefit account and informs the delivery network company at least 30 days prior to the allocation date.

(g) Each delivery network company shall ensure that the default portable benefit account offered by the delivery network company makes available at least 3 individual retirement account providers from which an eligible driver may select.

(h) Notwithstanding any other provision of this chapter, transfers made from a portable benefit account to an individual retirement account offered under the portable benefit account shall not exceed the annual contribution limit established by the Internal Revenue Service for contributions to an individual retirement account for the tax year in which the transfer is made.

Section 4. (a) An eligible driver who has deposited funds in a portable benefit account may receive a distribution of amounts for a permissible use.

(b) Assets in a portable benefit account shall not be commingled with other property except in a common trust fund or common investment fund.

(c) In the case of the death of any eligible driver, the entire balance remaining in the portable benefit account of the individual shall be immediately distributed in the form of a direct trustee-to-trustee transfer to the individual retirement account of the individual under the portable benefit account.

Section 5. (a) A portable benefit account shall be exempt from taxation under chapters 58 to 65c, inclusive.

(b) Contributions to a portable benefit account on behalf of an eligible driver by a delivery network company under subsection (a) of section 3 shall not be included in calculating gross income of the eligible driver under chapter 62.

(c) Pursuant to section 3 of chapter 62, amounts elected to be contributed by an app-based-delivery driver shall be allowed as a deduction in determining taxable income.

(d) Any distribution from an eligible driver’s portable benefit account shall not be included in gross income of the eligible driver under chapter 62, to the extent such distributions are for a permissible use, as certified by the eligible driver to the portable benefit account provider.

(e) Notwithstanding subsections (a) to (d), inclusive, in the case of any distribution from the health and paid leave account of an eligible driver’s portable benefit account which is not for a permissible use, the distribution shall be included in calculating gross income of the eligible driver under chapter 62 and in addition the distribution amount shall be subject to an additional 10 per cent penalty tax.

Section 6. The director of the department of family and medical leave shall promulgate rules and regulations pursuant to this chapter.

SECTION 2. The General Laws, as appearing in the 2020 Official Edition, are hereby

amended by inserting after chapter 175N the following chapter:

CHAPTER 175O

OCCUPATIONAL ACCIDENT INSURANCE FOR APP-BASED-DELIVERY DRIVERS

Section 1. For the purposes of this chapter, the following words shall have the following meanings:-

“App-based-delivery driver”, has the same meaning as provided in section 2 of Chapter 175N.

“Average weekly earnings”, the app-based-delivery driver’s total earnings from all delivery network companies during the 28 days prior to a covered accident divided by four.

“Earnings”, has the same meaning as provided in section 2 of Chapter 175N.

“Maximum weekly compensation rate”, has the same meaning as provided in section 1 of chapter 152.

“Minimum weekly compensation rate”, has the same meaning as provided in section 1 of chapter 152.

“Delivery network company”, has the same meaning as provided in section 2 of Chapter 175N.

Section 2. It is an unlawful practice, unless based upon a bona fide occupational qualification or public or app-based-delivery driver safety need, for a delivery network company to refuse to contract with, terminate the contract of, or deactivate from the delivery network company’s online-enabled application or platform, any app-based-delivery driver or prospective app-based-delivery driver based upon race, color, religious creed, national origin, sex, gender identity, sexual orientation, which shall not include persons whose sexual orientation involves minor children as the sex object, genetic information, pregnancy or a condition related to said pregnancy including, but not limited to, lactation or the need to express breast milk for a nursing child, ancestry or status as a veteran.

Section 3. (a) Delivery network companies, within 240 days of the effective date of this act, shall purchase occupational accident insurance, as described in subsection (c), for all app-based-delivery drivers who provide services through their networks within the Commonwealth.

(b) Delivery network companies shall file with the division of insurance, no later than 30 days after the commencement of a new policy year, a copy of the policy it has purchased for app-based-delivery drivers. The division of insurance shall be treated by the insurer as a certificate holder for purposes of receiving notice of cancellation of the policy.

(c) The occupational accident insurance policy required under subsection (a) shall cover medical expenses and lost income resulting from injuries suffered while the app-based-delivery driver engaged on a delivery network company’s online-enabled application or platform. Policies shall at a minimum provide, in aggregate, at least $1,000,000 of coverage and, at a minimum, the following: (1) Coverage for medical expenses incurred, up to at least $250,000; (2) Continuous total disability payments, temporary total disability payments, and partial disability equal to 60 per cent of the app-based-delivery driver’s average weekly earnings from all delivery network companies as of the date of injury but not more than the maximum weekly compensation rate, unless the average weekly wage of the app-based-delivery driver is less than the minimum weekly compensation rate, in which case the weekly compensation shall be equal to the app-based-delivery driver’s average weekly wage. Payments under this paragraph shall be made for up to the first 156 weeks following the injury; (3) For the benefit of spouses, children, or other dependents of app-based-delivery drivers, accidental death insurance in the amount equal to 66 per cent of the app-based-delivery driver’s average weekly earnings from all delivery network companies as of the date of injury but not more than the maximum weekly compensation rate, unless the average weekly wage of the app-based-delivery driver is less than the minimum weekly compensation rate, in which case the weekly compensation shall be equal to the app-based-delivery driver’s average weekly wage, times 156 weeks for injuries suffered by an app-based-delivery driver while the app-based-delivery driver is engaged on the delivery network company’s online-enabled application or platform that result in death.

(d) If an accident is covered by occupational accident insurance maintained by more than one delivery network company, the insurer of the delivery network company against whom a claim is filed is entitled to contribution for the pro-rata share of coverage attributable to one or more other delivery network companies up to the coverages and limits in subdivision (c).

(e) For purposes of this section, an app-based-delivery driver is engaged on a delivery network company’s platform from when the app-based-delivery driver accepts a delivery request to when the app-based-delivery driver completes that delivery request.

(f) Any benefits provided to an app-based-delivery driver under subsection (a) or subsection (c) of this section shall be considered amounts payable under a driver’s compensation law or disability benefit for the purpose of determining amounts payable under any insurance provided under section 113L of chapter 175 or under any personal injury protection coverage, as defined in section 34A of chapter 90.

SECTION 3. The General Laws, as appearing in the 2020 Official Edition, are hereby

amended by inserting after chapter 175O the following chapter:

CHAPTER 175P

AUTOMOBILE INSURANCE FOR DELIVERY NETWORK COMPANIES AND DRIVERS

Section 1. For the purposes of this chapter, the following words shall have the following meanings:-

"App-based-delivery driver”, has the same meaning as provided in section 2 of Chapter 175N.

“Delivery network company”, has the same meaning as provided in section 2 of Chapter 175N.

“Delivery services,” has the same meaning as provided in section 2 of Chapter 175N.

“Delivery service period”, means the period: (a) beginning when an app-based-delivery driver starts operating a personal vehicle enroute to pick up any item or items for a delivery or series of deliveries as documented via a digital network controlled by a delivery network company, (b) continuing while the app-based-delivery driver transports the item or items, and (c) ending upon delivery of the requested item or items to (i) the customer or the last customer in a series of deliveries, or (ii) a location designated by the delivery network company, including for purposes of returning the item or items.

“Digital network” means any online-enabled application, software, website, or system offered or utilized by a delivery network company that enables deliveries with app-based-delivery drivers.

“Personal vehicle” means a vehicle that is: (a) used by an app-based-delivery driver to provide delivery services via a digital network, and (b) owned, leased, or otherwise authorized for use by the app-based-delivery driver.

Section 2. (a) A delivery network company shall ensure that, during the delivery service period, primary automobile liability insurance is in place that recognizes that the driver is an app-based-delivery driver or that does not exclude coverage for use of a personal vehicle to provide deliveries.

(b) During the delivery service period, the app-based-delivery driver, delivery network company, or any combination of the two shall maintain automobile insurance that insures the driver for liability to third parties of not less than $50,000 for damages arising out of bodily injury sustained by any one person in an accident, of not less than $100,000 for damages arising out of bodily injury sustained by all persons injured in an accident, and of not less than $25,000 for all damages arising out of damage to or destruction of property in an accident, uninsured motorist coverage, to the extent required by section 113L of chapter 175, and personal injury protection, to the extent required by section 34A of chapter 90.

(c) If the insurance coverage maintained by an app-based-delivery driver pursuant to subsections (a) and (b) of this section has lapsed or does not provide the required coverage, insurance maintained by the delivery network company shall provide the coverage required by subsections (a) and (b) of this section beginning with the first dollar of a claim and the insurance maintained by the delivery network company shall have the duty to defend the claim.

(d) Coverage under an automobile insurance policy maintained by the delivery network company shall not be dependent upon another motor vehicle liability insurer first denying a claim, nor shall another motor vehicle liability insurance policy be required to first deny a claim.

(e) Insurance coverage required by this section may be obtained from an insurance company duly licensed to transact business under the insurance laws of this State or by an eligible surplus lines broker under section 168 of chapter 175.

(f) The coverage required pursuant to subsections (a) and (b) of this section shall be deemed to satisfy the financial responsibility requirement for a motor vehicle established by section 34A of chapter 90 and section 113L of chapter 175.

SECTION 4. Section 2 of chapter 62 of the General Laws, as appearing in the 2020

Official Edition, is hereby amended by inserting after paragraph (1)(Q) of subsection (a)

the following subparagraph:-

(R) Any amount contributed to a portable benefit account by a delivery network company for an eligible driver under subsection (a) of section 3 of Chapter 175N.

SECTION 5. Section 3 of Chapter 62 of the General Laws, as appearing in the 2020

Official Edition, is hereby amended by inserting after paragraph (19) of subsection (a) the

following paragraph:-

(20) An amount equal to the total contributions elected by an eligible driver under subsection (c) of section 3 of Chapter 175N.

SECTION 6. Section 148B of Chapter 149 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after subsection (e) the following

subsections: -

(f) Notwithstanding subsection (a), for the purpose of this chapter and chapter 151, and all other purposes, an app-based-delivery driver is an independent contractor and not an employee with respect to his or her relationship with a delivery network company so long as: (1) the delivery network company does not unilaterally prescribe specific dates, times of day, or a minimum number of hours during which the app-based-delivery driver must be logged into the delivery network company’s online-enabled application or platform; (2) the delivery network company may not terminate the contract of the app-based-delivery driver for not accepting a delivery service request; (3) the delivery network company does not restrict the app-based-delivery driver from performing services through other delivery network companies except while performing services through the delivery network company’s online-enabled application or platform; and (4) the delivery network company does not restrict the app-based-delivery driver from working in any other lawful occupation or business.

(g) For purposes of subsection (f), the following words shall have the following meanings:

“App-based-delivery driver”, has the same meaning as provided in section 2 of Chapter 175N.

“Delivery network company”, has the same meaning as provided in section 2 of Chapter 175N.

SECTION 7. Severability. (a) In accordance with section 6 of chapter 4, if any section or subsection of this act or its application to any person or circumstance is adjudged unconstitutional or invalid, such judgment shall not affect other provisions or applications of this act, which can be given effect without the invalid provision or application.

(b) Notwithstanding subsection (a), if Section 6 of this act is for any reason held to be invalid in its entirety by a decision of any court of competent jurisdiction, that decision shall apply to the entirety of the remaining provisions of this act, and no provision of this act shall be deemed valid or given force of law.

SECTION 8. Preemption. Jurisdiction in all matters concerning delivery network companies and app-based-delivery drivers is vested exclusively in the state. Notwithstanding any other provision of law, no municipality or other local entity shall establish or enforce any provision of law concerning delivery network companies or app-based-delivery drivers. Any provision of any local law or ordinance that on its face or as applied regulates delivery network companies or app-based-delivery drivers shall be preempted.

Name:	District/Address:	Date Added:
Daniel Cahill	10th Essex	1/20/2023