The San Mateo, California-based online polling company SurveyMonkey announced last week that it has been offering the independent contractors it employs a suite of “gold standard” medical, dental, and vision benefits, identical to those of its regular full-time employees, since January, Phil Albinus reports at Employee Benefit News:
Under the medical plan, 80% of claim costs are paid by its insurance carrier and the third-party employer pays 85% of employee premium and 50% of dependent premium. Contract and third-party employees are entitled to 80 hours of vacation and 40 hours of paid sick leave per year, including seven paid holidays, 12 weeks of paid parental leave per year and 12 weeks of paid medical leave per year. These workers can also receive a monthly subsidy of up to $260 for public transit expenses.
The divide between employees and contractors in Silicon Valley is vast: Whereas Facebook, for instance, reported a median employee salary of over $240,000 in its latest proxy filing with the Securities and Exchange Commission, that number does not include the army of contractors and subcontractors who provide security, custodial, catering, and other facilities management services for the social media giant. These contingent workers don’t enjoy anything resembling the plush benefits packages Facebook offers its full-time employees, and the impact of this inequality in the high-cost San Francisco Bay Area has drawn growing criticism toward the tech sector (Facebook is by no means unique in this regard).
In our age of HR as PR, benefits inequality has become an increasingly popular subject of scrutiny on the part of investors, the public, and the press. Starbucks expanded parental leave benefits for its hourly store employees earlier this year after activist investors began asking pointed questions about the disparity in leave benefits between hourly and salaried employees and whether this difference put the company at risk for claims of discrimination. Interestingly, in the case of SurveyMonkey, the impetus to equalize benefits for contractors came not from investors or the press, but rather from employees:
The idea for extending employee benefits to the support staff came from workers at SurveyMonkey. According to Chief People Officer Becky Cantieri, the company conducted an internal survey before last fall’s open enrollment season, and in it employees suggested that the janitorial and catering staff receive the same benefits as full-time employees. “Our employees pointed it out and wanted us to get involved in helping set a better standard, so we did just that.”
With freelancers, contractors, gig workers, and other forms of contingent labor making up a greater share of the US and global workforce each year, the question of how to provide benefits to these irregular workers has become a matter of growing concern for both companies and governments.
There are already some ways to provide portable benefits to contractors without running the risk of causing them to be reclassified as full-time employees, and some gig economy companies have been experimenting with new models, but many employers with less clout and cash than Uber, Etsy, or Care.com, remain unsure of how to provide benefits like health insurance and retirement savings without losing the flexibility of the independent contractor relationship.
Regulators, meanwhile, have been slow to keep up. Bills that would make it easier to provide portable benefits to contractors without running that risk have been circulating over the past year or two in the US Congress as well as in some state capitals, while Labor Secretary Alexander Acosta has called for updated labor laws to account for the advent of the gig economy, but partisan gridlock means a breakthrough on these reforms is unlikely anytime soon.