[xenadu02]

> The mass market model doesn't work when you have to charge 40% more just to cover the additional costs in benefits, overtime, taxes, hr etc.

Perhaps there was no model to begin with then, no? That 40% doesn't magically disappear. The cost is borne by the "contractors" themselves. In software development that usually means charging a lot more than a salaried employee costs because you aren't guaranteed work all the time and you need to cover your own benefits.

Building a business on forcing people into slavery would be profitable in some circumstances. Building a business on finding free gold coins buried in the ground would definitely be profitable. Doesn't mean you have a sustainable business.

[seizethecheese]

If there are enough people willing to work as contractors, then there is a business model.

[randycupertino]

Oftentimes they're just exploiting uneducated and naive people who work these jobs because they don't know any better, not because they want to be contractors.

[tejaswiy]

1099 costs breakdown: 63.2% Caregiver, 26.5% Margins, ~10% Misc

W2 costs breakdown: 56.8% Caregiver, 1% Margins, 18% Onboarding, 7% Recruiting, 3% Merchant Fees, 15% (Benefits, Taxes, Benefits).

If we take their data at face value, it looks like about 28% of the cost is Cruft picked up from the W2 model and is not benefiting either the company or the caregiver.

[ubernostrum]

Cruft picked up from the W2 model and is not benefiting either the company or the caregiver

Yes, I imagine those poor, hapless caregivers saying things like "My lifelong dream has been to work 80 hours a week with no overtime and no health insurance, and this damn nanny-state government is getting in the way of my achieving it!"

There's a reason why the 1099 racket is getting shut down, and it's because abused and exploited workers don't have that as their lifelong dream.

[tejaswiy]

This does not include the health insurance / overtime payments. The 28% is vendor fees, onboarding and recruiting costs.