Healthy food delivery startup Sprig just became the latest on-demand startup to decide to classify its workers as employees instead of independent contractors. That means Sprig will soon offer its hundreds of contract workers employment at the company.
Over the past few months, startups like Instacart, Shyp and Luxe have all switched their workers to W-2 employees rather than independent contractors. The main difference between the two is that with W-2 employees, employers have to “withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee,” according to the Internal Revenue Service.
“The decision was primarily based on a focus on customer experience and building a workforce rallied around our long-term vision for making healthy eating universally accessible,” Sprig CEO Gagan Biyani says. “Over the last year, we’ve attempted to innovate on how we communicate our mission to customers. One major touchpoint for us with Sprig customers is our Sprig server team, and the current independent contractor laws prevent us from providing them with training and development.”
Though, it’s important to note that the change comes at a time when the on-demand economy is being hit with lawsuits over the legality of how it classifies its workers. In June, the California Labor Commission ruled that one of Uber’s drivers was an employee rather than an independent contractor.
Once the change is fully in effect, which Biyani says he hopes to implement over the next 90 days, Sprig will be able to provide its servers with ongoing training and development, and reward its top performers and most tenured servers with stock option grants.
Another change Sprig has made is around transparency. Now, every meal in the app shows details about the farms from which Sprig sourced its produce, meat, dairy and grains. Head on over to the Sprig blog to read more about the company’s ambitions to make it easy to eat well.