• West Virginia legislators passed a bill (HB 4009) that permits companies to provide portable benefit accounts for workers without needing to classify those workers as employees.
• Governor Patrick Morrisey has not signed or vetoed the bill yet.
• If enacted, the bill would take effect for taxable years starting on January 1, 2026, or later.

Portable benefits are benefits that stay with the individual and accumulate based on hours worked or a percentage of transaction fees. They can function similar to a 401(k), paid time off program, or health savings account (HSA). Instead of benefits offered by one employer, portable benefits allow workers to receive funding from multiple companies in a single account. Often, a third-party administrator handles the contributions from the various employers.

Unlike employees, independent contractors are not legally entitled to minimum wage, overtime pay, unemployment benefits, and workers’ compensation. Some states require certain employers to provide paid sick leave and/or disability insurance to employees, but not independent contractors.

The West Virginia bill would provide an income tax deduction for contributions to and funds received in portable benefits accounts.

Utah and Alabama recently enacted similar laws on portable benefits for independent contractors.

The West Virginia bill will take effect in June 2026 if Governor Patrick Morrisey does not veto it. It would be effective for taxable years starting on January 1, 2026, and...

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