On-demand valet parking service Luxe Valet will convert its independent contractor workforce into employees.
The transition will begin immediately, according to Curtis Lee, the company's chief executive.
"As we grow, we have realized the need to assert more direct control over the customer experience and provide our valets with career development opportunities and benefits, none of which are possible within the boundaries of the 1099 model," he wrote on Luxe's blog Wednesday, referring to a portion of the tax code that applies to independent contractors.
The decision will affect hundreds of the company's parking attendants across seven U.S. cities, including San Francisco, where the startup is based, Los Angeles, Seattle and New York, and give workers the option of setting part-time or full-time schedules.
Luxe will pay for work-related expenses such as phone usage, jackets, workers' compensation, overtime, unemployment insurance, Medicare and Social Security taxes. Full-time workers will also receive health benefits.
Customers use an app to tell Luxe their destination, and a Luxe representative will meet them when they arrive. The Luxe parking attendant then parks the vehicle in one of their secure lots, and returns it to the customer when they are ready to to leave.
The company is among several on-demand service providers, including postage company Shyp and grocery delivery service Instacart, that are changing the status of some workers from independent contractors to employees.
Other companies in the on-demand space such as ride-hailing firms Uber and Lyft, and delivery service Postmates currently face lawsuits alleging worker misclassification.