In a historic move on July 13, 2025, Texas passed groundbreaking legislation that provides critical protections for gig economy workers. House Bill 295 (HB 295) ensures that independent contractors working for companies like Uber, Lyft, DoorDash, and other gig platforms are entitled to basic benefits, including health insurance stipends, paid time off, and a guaranteed minimum wage.
The law comes at a time when the gig economy, which employs millions of Americans, is facing increased scrutiny regarding the treatment and compensation of independent contractors. Gig economy workers have long been excluded from benefits typically afforded to full-time employees, and HB 295 seeks to remedy these disparities by ensuring that gig workers in Texas have access to essential protections.
Key Provisions of House Bill 295
HB 295 introduces several significant provisions aimed at improving the financial stability and well-being of gig workers. One of the most important aspects of the law is the requirement for companies that hire gig workers to provide a health insurance stipend. This stipend will allow workers to purchase health insurance on the open market or contribute to an existing plan. Given the lack of healthcare coverage options available to gig workers, this provision is seen as a critical step toward addressing one of the most significant challenges facing the gig economy workforce.
Another key feature of HB 295 is the establishment of a minimum wage for gig economy workers. Under the new law, independent contractors in Texas are guaranteed to be paid at least $15 per hour, a substantial increase from the current federal minimum wage. This provision aims to address growing concerns about income inequality and the financial instability that many gig workers face.
In addition to wage protections, the law mandates that gig economy companies offer paid time off (PTO) and sick leave for workers who meet a minimum threshold of hours worked. Prior to HB 295, gig workers were often forced to go without paid leave, making it difficult to manage personal illness or family emergencies. With the introduction of paid leave, gig workers in Texas now have a more secure safety net to rely on when they face health challenges or require time away from work.
Impact on Texas Gig Economy and Businesses
The passage of HB 295 is expected to have a profound impact on the gig economy in Texas. Legal experts predict that businesses will need to adjust their operations to comply with the new rules, which may lead to increased costs for companies that rely heavily on independent contractors. For example, platforms like Uber and Lyft may need to adjust their business models to account for the new requirements, which could affect pricing structures and profit margins.
On the other hand, gig workers in Texas stand to benefit significantly from the new protections. The law will provide them with greater financial stability, improved access to healthcare, and better work-life balance. Workers who previously lacked basic benefits now have access to essential protections that were previously only available to full-time employees.
Additionally, the law provides a clear process for resolving disputes between gig workers and companies, empowering workers to advocate for their rights. This aspect of the law is expected to lead to a more fair and transparent working environment in the gig economy.
Looking Forward: A Model for Other States
With the passage of HB 295, Texas is setting an example for other states looking to regulate the gig economy and provide protections for independent contractors. As gig economy platforms continue to grow in scale and influence, laws like HB 295 will become increasingly important in ensuring that workers are treated fairly and equitably.
By offering gig workers in Texas access to basic benefits and protections, the state is taking a significant step toward ensuring that the future of work is fair, sustainable, and beneficial to all parties involved. As more states consider similar legislation, Texas could serve as a model for others looking to create a more inclusive and balanced gig economy.
