Challenges of 1099 Staff: The Double-Edged Sword

May 29, 2024

The way we work is changing. Gone are the days of lifetime employment with a single company. Today, the gig economy is booming, with more and more businesses relying on independent contractors, also known as 1099 staff. While this trend offers undeniable benefits like flexibility and cost savings, it’s not all sunshine and rainbows. There are significant challenges companies need to consider before going all-in on a 1099 workforce. Let’s delve into the double-edged sword of 1099 staff, exploring the disadvantages, and potential pitfalls of this increasingly popular staffing model. While 1099 staff offer advantages, there are significant challenges businesses should consider before relying heavily on them.

Key Issues with 1099 Staff

There are a few critical issues surrounding 1099 workers, especially for healthcare facilities that assume all of the risk associated with 1099 contractors.

Management and Control

1099 workers are self-employed, and because of this, they are their own managers and accountability department. When they don’t want to show up for a shift they don’t have to, and nothing can ever be done about it past a DNR (do not return), which doesn’t stop them from going to another facility and doing the same thing.

Since there is no control over staff, the help you receive can be inconsistent. There isn’t an interview process to help weed out the people who might not be the best fit for the job or industry. This can lead to more financial and liability risks for healthcare facilities that use 1099 workers.

1099 workers are supposed to carry liability insurance, but there aren’t many ways to guarantee that they do which opens the door for you to fight a legal battle alone.  

Employee Misclassification Risks

A recent ruling by the Department of Labor outlines what makes a worker 1099. There are a lot of grey areas in the healthcare setting that increase the risk for healthcare facilities. One of the rulings suggests that if you control someone’s schedule they are an employee, not a 1099 worker. Since facilities request a shift at a specific time, and can DNR workers who are late, nurses are not supposed to be 1099 workers. The legal and financial repercussions like hefty fines and back taxes could fall on the facilities, not the “gig” agencies. The official ruling went into effect on March 11th and nursing home operators are being targeted by an increased litigation because of 1099 staff.

Limited Benefits and Loyalty

1099 staff are not eligible for company benefits. Employees who receive benefits are more likely to stick with the company they work for. This provides a more consistent experience for facilities and their patients.

Potential Skills Gaps and Training Needs

Since 1099 workers aren’t managed or ever “hired” they don’t receive the same training that W-2 workers receive. When a 1099 worker shows up to your facility they may require additional training that you wouldn’t have to do with a W-2 employee who receives a skill check and test before being sent to facilities.

1099 staff member receiving training.

Building a Better Balance: Optimizing Your Workforce with W2 Staff

Cascade’s W-2 Employees Solve The Issues of 1099 Staff

Solutions for attendance issues: W-2 staff reports to management teams who help staff members keep track of their schedules, and ensure each staff member shows up to their shift on time. In the rare event that a W-2 employee doesn’t show up to their assigned shift, the facility can reach out to our staffing team, and they will handle the issue for you. W-2 employees can be written up and even terminated for canceling too many shifts on short or no notice. When a facility partners with a 1099 agency, their only option is to DNR them.

Liability solution: Since all W-2 staff are employees, W-2 agencies can cover them under their liability insurance. This takes away any doubt that a 1099 worker has insurance in the case of an accident.

Mitigating the risk of misclassification: W-2 is the correct way to classify healthcare employees. Since they are managed by unit managers while on shift and told when and where to report, they are considered employees. By partnering with a W-2 agency you avoid any risks associated with misclassification.

What We Do

Cascade Health Services has supported a W2 model for over 36 years. We pride ourselves on being an industry leader in the W-2 healthcare staffing industry. Since we have an HR team, facilities don’t have to worry about credentials or dealing with problematic employees. That partnered with our Joint Commission Certification allows us to find and retain the best staff. To help us retain more employees we offer awesome benefits that 1099 agencies can’t offer. Our benefits are one of the biggest factors in our employee retention. 

Our recruiting and onboarding teams are constantly working to attract and onboard new staff, which gives facilities the ability to scale their workforce as needs arise rather than hiring permanent roles for temporary problems. 

We protect you from liability by providing all our employees with liability insurance including worker’s compensation. This gives you ease of mind when you receive a W-2 employee from Cascade.

What we do

Allied Healthcare & Nurse Staffing Services

Founded in 1988, Cascade Health Services is a leading healthcare and nurse staffing agency in the United States. More than 2,500 nurses, nurse aides and allied health professionals work with Cascade across the nation. We are hiring RN, LPN, LVN, CNA, CMA, CMT and other healthcare professionals for immediate Travel, Contract and PRN jobs in Nursing Homes, Long Term Care Centers, Skilled Nursing Facilities, Assisted Living, Rehabilitation Centers and Hospitals.