On Yahoo! Finance, CEO John Chuang explains how all freelancers and gig workers can (and should) be placed on an equal playing field with a company’s regular employees. And how Vitamin T Square Deal is allowing businesses to make benefits equality a reality. Per John, companies that don’t do it “are on the wrong side of history” and “missing a really big opportunity.”
Yahoo! Finance: Gig economy workers are getting a major revamp in California soon. A new state law takes effect on January 1st that will force businesses to reclassify contractors as employees. And it comes as Upwork data shows freelancers contribute nearly $1 trillion to the economy each year. So joining us now for more insight is Aquent CEO John Chuang. John, good to see you again. When we're talking about this, companies like Uber or Lyft come to mind when we're talking about contract workers. What are your thoughts on the way that's changing and the way they now have to address their workers in California as employees?
John Chuang: I think that's really good. And what they're trying to do is repeal that law and I think they're on the wrong side of history here. What they're trying to do is undo worker norms that have been in our country for generations by eliminating worker protections, our unemployment and minimum wage laws, workers' compensation, and I think they're really missing a big opportunity here.
Yahoo! Finance: Do you think that a company like Uber, like Lyft, or even if you think about DoorDash that has the delivery employees, can exist if they have to consider all of those gig workers as regular employees?
John Chuang: Yeah, they definitely can exist. And that's their big opportunity. Their big opportunity is to make gig jobs great. And the way they can make gig jobs great is by giving the flexibility and the benefits. Now at my company, we went through a similar experience. In 1993 we became the first temp agency to offer full-time benefits for employees. And did the sky fall in? Did our costs go out of control? No. In fact, we made money with benefits. Why? Because we were able to attract and retain the very best employees. And that's the opportunity Uber has. And that's why we're really proud to introduce Square Deal.
Yahoo! Finance: Which is kind of helping companies work on that.
John Chuang: Yeah. Aquent Square Deal is an extended workforce ecosystem that allows companies to give benefits to contractors at scale. So we essentially do two things. One, we put in the systems necessary to get benefits, and two, we provide the people who provide the care. It's almost like an instant HR army for your contractors.
Yahoo! Finance: I know Uber and Lyft are the big hot topics here, but are any other industries that are really a good capture market for you in that realm?
John Chuang: Oh yeah, definitely. All the tech companies in the United States really have a problem of a second class citizen in their workforce. So for instance, a big company tech company might have 100,000 employees, but they also have 100,000 non-employees who work side-by-side with the employees, except it's a second class citizen because one side gets great benefits, gets stock options, gets sushi chefs and buses that cart them around. The other side really gets nothing. In fact, this holiday season right now, tech companies are really famous for giving workers off in the last two weeks of the year, except the contractors who get a furlough and they don't get paid because there's no paid time off. So in other words, this is a real problem that I think the largest companies and the most profitable companies in the United States can solve by giving base level of benefits to their contractors.
Yahoo! Finance: I think that's part of the reason why we saw California make this move with AB 5 to sign this law and have it go into effect starting January 1st. But at the same time, I guess for you as a business focused on that, it would seem that the pool of workers and companies that are running into these problems continues to grow well beyond just Uber and Lyft. Have you seen that constantly since the 80s? I mean, has it been a constant rise or has it actually accelerated?
John Chuang: It's been a constant rise. And I think today's generation really likes the flexibility and the control that the gig economy, independent professional work provides. Because you really have a control of working where you want to work, when you want to work, what you want work on, who you want to work with. Except there's one problem with gig work right now as a full- time career and that is it doesn't give you the benefits that in our country comes from the employee-employer relationship. That's what Aquent wants to change. You know, we can provide employee relationships that give you the benefits you need. At the same time, you still have this great flexible lifestyle that everyone wants from the gig economy.
Yahoo! Finance: All right, there you go. John Chuang, Aquent, breaking it all down for us. Thank you so much for joining us. Appreciate it.