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Summary:

oDesk, the online marketplace for freelancers, announced yesterday the creation of oDesk Staffing to help provide freelance workers access to employer-style benefits, including group health benefits. It will also manage contract employees for small firms, providing their benefits and handling their payroll and taxes. Freelancers typically […]

oDesk, the online marketplace for freelancers, announced yesterday the creation of oDesk Staffing to help provide freelance workers access to employer-style benefits, including group health benefits. It will also manage contract employees for small firms, providing their benefits and handling their payroll and taxes.

Freelancers typically have difficulty securing access to a comparable range of benefits to what they’d have in an employment situation. This is especially true of health benefits, as I’ve written previously.

How is oDesk trying to fix this? oDesk Staffing extends its existing 1099 system by letting you elect to have a W-2 employed relationship status with the company.

Workers who opt for a W-2 status and who complete 30 hours per week of billable work through the oDesk system are eligible for benefits from oDesk Staffing. The benefits include group health benefits with no pre-existing condition limitations, retirement benefits and even unemployment benefits. oDesk also guarantees payment from clients for work, but the trade-off for that guarantee is that the oDesk system requires that you use monitoring software during work hours that some freelancers might consider intrusive (including the use of webcam shots).

Eligibility for benefits relies on an hourly calculation, so workers who get paid using other measures, such as writers getting paid by the piece, won’t be eligible for the oDesk Staffing benefits system. Workers become eligible for benefits on the first day of the month following a month where they they have worked 30 hours a week. This means workers have to wait between 31-61 days to become eligible for benefits under the oDesk Staffing system.

What will all of this cost? For existing oDesk users, oDesk Staffing’s examples say that after taxes and their fees, the take-home pay of the producer will be the same under a W-2 relationship as under the existing oDesk 1099 system. Freelancers considering porting their existing client relationships to oDesk to take advantage of the benefits should know that oDesk Staffing charges a 20 percent fee for their services that includes the worker’s tax withholding. For a worker who can’t secure insurance any other way, that may be a necessary premium to pay.

oDesk Staffing isn’t publishing information on the cost of the health insurance premium buy-in itself. It is available via email from getbenefits@odesk.com, though. There are nine different plans. On the web site, sample rates are quoted for the Basic PPO plan at $135 per month for an individual 35-year-old, or $400 per month for a family.

Would you bill all your clients through a service in order to get health insurance?

  1. Does anybody here use oDesk to find freelance work? Oftentimes I find that the work providers are from countries that can cut fees considerably to make it near impossible for an American to land a contract via this method and still be profitable.

    Although I understand that you get what you pay for, a vast majority of people or companies seeking workers often go for the lowest bidder, and think about the quality later.

    However, I think oDesk is doing a great service to it’s freelance corps by offering these benefits. MBO Partners out of Virginia has been doing this for some time, and they cater to freelancers and contract workers as well. Great article, thanks for sharing this info with the rest of us!

    -Jay

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    1. I’ve just started using oDesk and I’ve already scored a few interviews – and I charge higher than the average person in my field (marketing and Website content).

      Yes, it is a little disconcerting to see so many people from other countries undercutting experienced workers. However, I make it a strong point in my cover letter that employers are paying for experience and professionalism, and if they go with someone that wants a small amount of money, they get what they pay for. This seems to work. The people who want really good work are willing to pay for it. It’s not impossible to get the good gigs, you just have to weed out the ones that like the cheaper labor.

      I think it helps to view the employers and see who they’re interviewing. I came across one ad that had 10 bids at an average of around $14 per hour. The only person the employer even interviewed was someone bidding at $7 an hour. It gave me a very strong signal to steer clear.

      Also, what does your portfolio look like? Mine is STACKED. You might want to beef yours up if it’s a little thin. That’s just my two cents.

      Best of luck!

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    2. Also, one more thing.

      oDesk > Guru.com. I had a terrible time finding even halfway decent work on Guru.com. It has been completely overtaken by bottom-feeders. Don’t even go there unless you want to work for $2 an hour.

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  2. This is really interesting. It will probably take some time to work the kinks out with a program like this but I would love to see this be the way of the future for freelancers / independent contractors. Kudos to oDesk for being the first to really try to make it work.

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  3. [...] is one sign that this is beginning to be recognized. Another sign was a recent announcement by oDesk that their freelancers can start getting group health benefits through them. This recognition of [...]

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  4. [...] there’s a new problem. oDesk is apparently pushing the idea that they’re offering health insurance to freelancers (oh, how original). But before you get excited, read carefully. It has absolutely [...]

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  5. That’s awesome, but I second Jay’s feelings-whenever I’ve browsed ODesk for work, it seems like it’s hard to find a decent paying job there. I used to Elance but now only bid on jobs there occasionally, for the same reasons.

    If you’re not already using ODesk and you are considering moving your relationships over, I would look carefully at the amount ODesk takes in fees and compare it to the amount it would cost to buy comparable benefits on your own, assuming you can find them on the individual market. Just make sure you’re actually going to come out ahead!

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    1. For people like me who can’t buy insurance without a group plan due to pre-existing medical conditions, there is no cost comparison. This is a way to get benefits that we couldn’t get at all otherwise.

      Definitely I agree though that oDesk and Elance are hard to find work for fair pay on. It might be better to run your own projects through oDesk to get these benefits than rely on stuff you find on there to get your eligibility.

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  6. offering someone or posting someone one or two dollars for a written article should be illegal, they allow postings of 1-2 daily work, I am unsure of how many people are aware that the people in Haiti were trying to live on two dollars a day, but were eating dirt sandwiches,

    I rebuke odesk until they climb aboard and get rid of posts that are not fair trade and pushing poverty over the brink.

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  7. [...] company had previously offered benefits such as group health insurance and 401(k) retirement plans to freelancers through oDesk Staffing, [...]

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  8. [...] company had previously offered benefits such as group health insurance and 401(k) retirement plans to freelancers through oDesk Staffing, [...]

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  9. I am small business owner from Australia Melbourne. We run small Formal Wear Hire Business and internet marketing is our core of the business. Contracted many SEO companies in Australia spend a lot of money on them and they didn’t achieve the promised rankings for our webpage http://www.lamenzformalwear.com.au .Then by accident in Google search come a cross to Odesk web and first we registered take us about week to figure out how hall thing works, was small amount to invest for big gain .Found SEO exert from India which cost less then 1/3 of cost of SEO in Australia we are in constant contact whit him and he Is like part of out team now. In four week hi achieved what Australian SEO didn’t achieve in 2 years. When we ware searching for job listing we found a lot of AUS web marketing firms contracting SEO experts from Odesk so with this we cut the middle man out and we get excellent service.

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