Marcela Sapone speaks at the department's Future of Work symposium in December 2015.
Just before the holidays, I broke away from my daily duties running a growing startup to spend time in the District of Columbia thinking about the future of work. The Brookings Institution held a forum discussing the first proposal to create a new worker classification and the Department of Labor kicked off a Future of Work symposium, inviting diverse stakeholders to discuss how employment is changing and what it could mean for public policy.
Startups like mine are creating many new jobs. These jobs are often freelance work, which offer flexible hours and unique working arrangements. As the number of Uber drivers, Airbnb hosts, and freelance cleaning and handyman jobs have increased, a discussion on the nature of the jobs has developed. The key question: Are startups developing a transactional mentality toward the workers powering their platforms?
This is something we have a strong opinion about. My startup, Hello Alfred, helps busy people organize their lives by affording them a dedicated home manager who visits each week to help with to-dos. We partner with many sharing economy and local services and have our own trained employees that help in your home. As a result, we interact with thousands of workers.
Many startups hire independent contractors and do not provide benefits, protections or training. When we launched Hello Alfred last year, we were one of the few tech firms to classify our workers as W-2 employees, paying competitive wages ($18-30/hour) and providing health benefits to those who work full time. We calculated the 20-30 percent cost increase to do this would be offset by the ability to acquire great employees, keep them happy and deliver a consistent service. As we grow in Boston and New York, our data shows this calculation is working. And we’re not the only ones − many other startups in the space have followed suit.
Startups are just a small part of a larger trend. More of us are engaging in freelance work, generating income from a mosaic of gigs and platforms. One study predicts 40 percent of the workforce could be contractors by 2020. In light of the changing landscape, there is good reason to examine current standards of work.
For example, the differences between 1099 (independent contractors) and W-2 (payroll employees) are extreme. 1099 arrangements do not have to follow safety guidelines or anti-discrimination laws; nor do they have to pay minimum wage, overtime or workers’ compensation in case something goes wrong on the job. They can change wages at any time, and they do not provide Unemployment Insurance or tax and Social Security withholding.
In those arrangements, workers therefore effectively become their own employers. So workers need to equip themselves with the right information. That being said, businesses opting to use 1099 contracts can be good actors and be thoughtful about the jobs they are creating.
Ultimately, all employers − even young ones like myself − need to be asking ourselves: “Is it a good job?” And that one question is underscored by several others: Does the job provide a fair wage and communicable skills? Are we creating a healthy working environment? Are we framing our corporate missions to make employees feel like their labor is meaningful?
The Future of Work symposium gave me the opportunity to come together with other employers, workers and policymakers to discuss the most important part of employing humans to shape the world we live in: making people the focus of our business calculus and thinking about the ways we can provide great jobs.
Marcela Sapone is the co-founder & CEO of Hello Alfred. Read a longer version of Marcela’s reflections on her Medium account.