As the war for talent leads employers to adopt creative recruiting tactics, some have begun offering benefits previously reserved for employees. At SurveyMonkey, this means offering benefits to contractors and vendors' employees.

The company, the SaaS that brought online surveys into the mainstream, recently announced that it will offer benefits to its contract workers and employees who work with the company through third-party commercial services. And it was the company's own employees who suggested the move, Becky Cantieri, chief people officer of SurveyMonkey, told HR Dive.

An internal survey revealed that staff were satisfied with their own benefits packages, but wondered if they could be extended to contractors. Specifically, they identified the vendors with whom they had long-standing relationships, like cleaning and kitchen staff.

Management worked with the company's benefits and insurance provider to create a framework to help vendors align their benefits with those offered to SurveyMonkey employees, providing financial support to do so.

The benefits package that contractors receive includes health, dental and vision, with the vendor providing 85% of the employee premium and 50% of the dependent premium. Workers also receive vacation and sick leave, plus holidays and 12 weeks of medical and parental leave annually. Additionally, contractors can receive a stipend each month to cover the cost of public transportation to and from work.

"We have received an overwhelming amount of positive feedback from the industry which is really exciting," Cantieri said, "including from other tech companies inspired by our initiative and looking into potentially offering similar programs."

Broader implications

Other employers who may be inclined to follow suit have some implications to consider first, warned Katherine L. Fechte, attorney at Greensfelder, Hemker & Gale. Both federal and state requirements must be examined, she told HR Dive via email.

“First,” she said, “providing benefits to contract workers could subject the business to a finding under state and/or federal law that the workers are actually employees.” Insurance, paid time off and related benefits are elements that can help determine employment status. There is an increased probability the IRS could find that contractors are employees, opening the door to workers’ compensation responsibilities, unemployment benefits, protection under Title VII, state regulations, overtime laws and more.

Also, if there isn’t significant distinction between the contractor and regular employees, there is a risk of misclassification under wage and hour rules, Fechte said. She also suggested assuring that the coverage you purchase will work. “For example,” she wrote, “if a business provides health insurance to its independent contractors, but the applicable health plan or insurance policy states that it only covers employees, the insurance company could end up disputing whether a worker is entitled to coverage.”

If a vendor doesn’t provide benefits on its own, one option could be to simply bring the contractors on to your payroll to avoid any issues. “If that isn’t an option,” Fechte said, “the company should definitely seek help from an attorney in navigating this arrangement.” You’ll want an agreement for the contract workers that outlines terms of a contract, rather than employment relationship.

SurveyMonkey is able to avoid that potential legal morass by providing financial support to the vendors, who in turn, provide and manage the benefits programs. “We realize that this isn’t a silver bullet,” Cantieri said, “but we do hope it makes a tangible impact on the lives of our contractors and vendor employees."

"We hope to increasingly see companies both here in Silicon Valley and across the country take on more responsibility and ensure that workers are treated fairly and valued for the contribution they make — whether they be full-time employees or part of an extended workforce," she said.

An industry trend?

As more companies, particularly those in Silicon Valley, begin to provide benefits to gig workers, others are working to ensure their offerings remain competitive, according to Kurt Heikkinen, president and CEO of Montage.

“In light of some companies beginning to offer benefits to gig workers, organizations must give their traditional hiring processes a facelift and think about their brand as an employer," he told HR Dive in an email. If benefits aren't an option, employers may need to work harder to showcase workplace culture.

Talent acquisition teams will need to get creative, Heikkinen said, with “innovative ways to engage this talent using technologies like text and video interviewing and candidate self-scheduling solutions to enhance the candidate experience while highlighting the benefits of working at their companies.” It may be especially important to leverage technology to give contractors an authentic look at the employment experience, he said, “so adopting these tools can ensure your organization stays competitive in face of these new benefits.”

Still, benefits for gig workers is a trend that appears to be gaining momentum. And in a tight talent market, any advantage a company has over the competition could be worth consideration.