Dive Brief:
- Some gig economy startups are bypassing freelancers and independent contractors, instead, hiring for full-time positions complete with W-2 forms and benefits, Fast Company reports.
- Several small businesses told Fast Company that hiring full-time allows them to send the same gig workers to the same clients, which establishes trust with customers. MyClean, a cleaning company, said it transitioned from employing other companies' W-2 workers to hiring its own to maintain quality control.
- Arun Sundararajan, a New York University professor and author of "The Sharing Economy," told Fast Company that this reverse trend could spread, but that depends on whether gig workers make sense for a given business model.
Dive Insight:
Certain industries rely on workers who can serve customers with trust, consistency and dedication — traits some employers believe they're more likely to cultivate in workers they can hire as employees and train.
A few leading gig employers, including Uber, have planned test runs of traditional benefits offerings including workers' comp., healthcare and others. Considering legal developments around contingent work, it seems HR may be witnessing an emerging compliance framework that could affect a sector of employees expected to balloon over the next decade.
Some employers undoubtedly hope to avoid the expense of providing benefits and other perquisites by hiring on-demand workers and contractors, but it's clear that those provisions might be preferable to long-standing disputes over worker classification and/or related settlements.
Gig economy firms have ended up in court (think the two major ride-hailing apps) for classifying workers as contractors instead of employees and lost their cases. The subject of employee classification has also tested compliance efforts around tax collection.
