While there are many reasons to love working in the gig economy, freelancing and short-term employment has its downsides, including a lack of benefits like health insurance, retirement plans and workers' compensation coverage. But here are five companies that are testing the waters and finding ways to reward gig workers.
While there are many reasons to love working in the gig economy, freelancing and short-term employment has its downsides, including a lack of benefits like health insurance, retirement plans and workers’ compensation coverage.
Fortunately, some companies are trying to change that by rolling out attractive benefits for their gig workers. The snag? The added perks aren’t often comparable to what you might find in a traditional 9-to-5 position, because companies must walk a fine line between rewarding part-time workers with benefits and running afoul of government rules regarding what separates an employee from a contractor.
Offering benefits such as group health insurance could mean a company has to classify its on-demand workforce as employees. That, in turn, can result in additional tax and wage requirements for a business. “It’s more complex than [providing] typical full-time employee benefits,” says Keith Ryu, CEO of Fountain, a company that provides software to firms hiring hourly and gig workers.
Not only do companies have to work within government regulations, but they also have to contend with a diverse workforce. “You have one driver who works one hour a week, and one driver who works 40 hours a week,” Ryu says. Figuring out how to classify different on-demand workers for access to benefits is tough, he says.
With that in mind, here are five companies that are testing the waters and finding ways to reward gig workers.
Fiverr. Originally launched as a site where people could offer their services for $5, Fiverr has evolved into a platform for professional freelancers to market skills such as graphic design, audio production and computer programming.
“We hear a lot from our users about pain points they have,” says Leif Abraham, director of business management for Fiverr. The company created a resource called Fiverr Elevate as a way to alleviate two of the issues that concern workers on the platform: getting educated on self-employment topics and finding vetted benefit providers. Fiverr Elevate is available to both buyers and sellers on the site.
Fiverr’s partner providers include Wealthsimple for retirement savings, EHealth for health insurance and Visor for tax assistance. It’s the tax help that Abraham thinks is one of the most valuable benefits offered on the platform. “The price is heavily negotiated down,” he says. “It comes with an actual human advisor you can check with throughout the year.” Fiverr buyers and sellers can save $150 on the service. Another partner service with Fiverr, And Co, offers free contracts, invoicing and time-tracking.
(AP Photo/Eric Risberg)
AP Photo/Eric Risberg
SurveyMonkey. This company, known for its free online survey software products, made headlines earlier this year for announcing it would begin offering full benefits to certain contract workers. The perks will be limited in scope, applying only to people providing services through vendors at the company’s San Mateo, California, headquarters. However, the benefits would be on par with those offered to full-time employees. They include employer-sponsored medical, dental and vision plans, paid time off and a monthly subsidy for public transit expenses.
While the SurveyMonkey announcement may provide hope to gig workers that other companies will follow suit, businesses may hesitate to offer benefits that could be interpreted as creating an employer-employee relationship. “One of the biggest concerns is [whether] the worker is essentially being treated like an employee,” says Steve Blumenfield, senior director of strategic opportunities and alliances at the financial firm Willis Tower Watson.
(Thinkstock)
Thinkstock
Uber. This popular ride-sharing company knows firsthand what happens when gig workers start looking too much like employees. The company has been sued numerous times by drivers who contend they shouldn’t be considered contract workers. The results have been mixed, with a New York appeals board claiming last month that Uber drivers are employees, while earlier in the spring, a federal judge in Philadelphia said the company doesn’t exert enough control over workers in its UberBlack service for them to fall into that category.
The debate over driver status hasn’t stopped Uber from rolling out some benefits for workers. These include discounts on vehicle maintenance, phone plans and tax services. Plus, a partnership with Stride Health allows workers to use a free app to search for and buy an affordable health insurance plan.
Blumenfield notes several companies in the gig economy use Stride Health to offer access to health insurance coverage. The Stride Health app’s free cost, ease of use and variety of plan choices have made it popular. “They are essentially trying to provide company-type options,” Blumenfield says. Just as employees may be presented with several health care plans during open enrollment, Stride Health seeks to do the same for the self-employed.
(AP Photo/Patrick Semansky, File)
AP Photo/Patrick Semansky, File
Wonolo. Through the Wonolo staffing platform, companies can request gig workers to fill staffing needs for general labor, warehouse operations, merchandising and other tasks. Workers who sign up on the platform have access to a number of benefits, including Stride Health and occupational accident insurance.
Another benefit is PerkSpot, a discount program open to those who have completed at least five jobs on the platform. Those eligible can receive savings on groceries, food, travel and more. Those who have a more extensive work history can join the Wonolo Ambassador Program that offers a 5 percent bonus on jobs. There is also a skills development program that provides access to educational and coaching resources that can be used to advance career goals.
“My view is that our community is an unquantifiable benefit,” says Jaimee Zullo, community manager for Wonolo, which has U.S. operations based in San Francisco. The company conducts in-person events to gain feedback from users and enable workers to connect with others.
(AP Photo/Wilfredo Lee, File)
AP Photo/Wilfredo Lee, File
Caviar. This on-demand food delivery service is one of the latest companies to offer an insurance benefit for its gig workers. “Financial compensation is not the only factor workers take into consideration when choosing their employment and more companies are beginning to realize this,” says Mike Serbinis, founder and CEO of benefits platform League Inc. ” Perks and benefits go a long way in helping gig employees decide where they’d like to work.”
In the case of Caviar, the benefit being offered is occupational accident insurance. While it’s not the type of benefit that will have an immediate impact on the company’s contract workforce, it represents a significant step in protecting gig workers who won’t have access to workers’ compensation if injured on the job.
The Caviar policy will give workers up to $1 million per accident, a $100,000 accidental death benefit and disability payments equal to 50 percent of a courier’s average weekly earnings. It’s an example of how companies are working to provide benefits that not only protect existing workers but attract new talent.
(AP Photo/Hadi Mizban)
