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Workers at $12 billion HR startup Deel say they may have been misclassified as independent contractors. Deel says they have not.

Deel CEO Alex Bouaziz sitting on a sofa smiling
Alex Bouaziz, CEO of DeelDeel
  • Deel is one of the fastest-growing software-as-service startups worth over $12 billion.

  • Over half the company's workers are classified as independent contractors — including the CEO.

  • Some workers worry about their labor rights and are concerned they've been misclassified.

HR business Deel is one of the fastest growing startups in history.

A poster-child for the remote-work revolution, it rose to prominence at the height of the pandemic helping companies legally hire workers around the world. But in a recent Insider feature, workers at the $12 billion company said they have concerns Deel may have misclassified them and their colleagues as independent contractors.

At least half the company's 2,000 workers around the world are employed as independent contractors. Even the CEO, Alex Bouaziz, is an independent contractor.

17 current and former workers that Insider spoke to were concerned the company may have misclassified contract workers' employment status, in the US, Canada, Australia, Europe, and elsewhere around the world.

If true, it may have legal consequences for the company, and some workers worried they may be missing out on rights and benefits they would have had as traditional employees.

Many workers that Insider spoke to said there seems to be no noticeable difference in the responsibilities of independent contractors and employees. Independent contractors worked in everything from sales to management. Others said they had assigned managers, needed to request paid time off, and sometimes used company equipment. Workers in the US, Canada, and Hong Kong said they didn't know they'd be classified as contractors until they received their offers.

Some Deel workers said they were happy with their status and had the flexibility to work for other companies as well, but many said the startup took so much of their time they couldn't work for others even if they had wanted. Many contractors that Insider spoke to said they felt pressured to be routinely online during regular business hours to attend meetings and do work.

While most independent contractors work on short-term tasked based projects, contracts reviewed by Insider showed independent contractors at Deel work for multiple years at a time.

"Deel's whole structure and their business model operates under the guise of: We help you hire people legally and compliantly in other countries," said a former contractor from Canada. But he worried Deel may not be hiring workers legally and compliantly itself.

Legal experts like Orly Lobel, the Warren distinguished professor of law at the University of San Diego, told Insider that if a contractor has a regular salary, reports to a superior, and must ask for time off, they may be considered an employee.

A Deel spokesperson said it hires workers as independent contractors in places it does not yet have the legal entities to hire them as full-time employees. In countries where it does support full-time workers, the startup asks people whether or not they want to work full-time or as employees. Deel said it believes its use of contractors complies with relevant labor laws and empowers workers.

"This is what we do for our customers, so we have the expertise; it's just instilling that into our managers and leaders so they manage effectively," the spokesperson said.

Read more about the startup's meteoric rise "Deel Speed: The inside story of a $12 billion HR startup's breakneck growth."

Read the original article on Business Insider