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Home Care Startup Honor to Treat Workers as Full-Fledged Employees

February 2, 2016

Honor, a San Francisco-based startup that uses smartphones to match home care consumers with workers, announced that it will treat those workers as full-fledged employees rather than as independent contractors.

The company, which raised more than $20 million last year from Silicon Valley investors, employs several hundred home care workers. Currently available only in select California markets, Honor uses a smartphone app to connect home care consumers with available caregivers.

When it launched last year, Honor used an independent-contractor model of employment, similar to that used by Uber and other examples of the emerging “gig economy.” Honor workers were paid per each assignment and were not eligible for any benefits.

However, the company announced on January 21 that it would move toward a traditional workforce model, giving employees access to benefits such as employer-sponsored health insurance, paid sick leave, and even stock equity.

Benefits to Traditional Employment

Honor CEO Seth Sternberg said that the change in employment model allows Honor caregivers to develop long-lasting relationships with consumers.

“It turns out seniors and their families are using us for months, not just for an hour here and an hour there,” Sternberg told USA Today on January 21.

Designating caregivers as full-fledged employees additionally makes it easier for the company to provide training and career-advancement opportunities, Sternberg said. “People perform much better when they have a path up,” he said.

Employee Misclassification in Home Care

Uber, Lyft, and similar leaders in the so-called gig economy, or “on-demand economy,” have faced criticism for their reliance on the independent-contractor model of employment. Critics point out that contracted workers have few workplace protections, and their job status is always tenuous and provisional.

Home care agencies have also come under fire for exploiting the independent-contractor model. In December, the National Employment Law Project released a fact sheet outlining the growing problem of employee misclassification in home care.

“Home care agencies frequently mislabel their employees ‘independent contractors’ and deny them basic workplace protections and benefits,” the fact sheet says. “Home care workers should very seldom, if ever, be classified as independent contractors.”

— by Matthew Ozga

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