oDesk Staffing to Offer Benefits to Freelance Workers

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?

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