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Team Council
The cost of the first hire is still a policy choice
RC/TM/2026/CL.5 · 27 June 2026
Dear members,
June has been a month of moving from evidence toward decisions. That is the part of this work that can feel slow: reports have to be checked for patterns, a draft has to be made clear enough to test, and members must have time to challenge it. But the sequence matters. If a proposed fix is to be useful to small employers, it must begin with what they experience—not with an assumption about what they ought to experience.
For the Team Council, the central question remains practical: what would make it easier for a small business to hire its first ten people formally, without facing a maze of registrations, unpredictable obligations, or a cost structure that makes the decision impossible?
What moved this month
On 2 June, public consultation opened on the Platform Council’s draft Fairness Standard. The consultation runs through 2 July. It is an Assembly-wide test of how a proposed standard reads outside the room where it was written. The point is not simply to count support. It is to find unclear language, missing cases, and obligations that might be workable for a large operator but not for a small one.
On 23 June, Cashflow Council’s CF-001 passed the five-part pattern test: Volume, Frequency, Consistency, Spread, and Corroboration. Passing that test does not settle the remedy. It means the evidence has met the threshold for moving to the next stage: drafting a fix, then putting it before members and the public for scrutiny. That distinction is worth keeping clear. A recurring problem deserves attention; a proposed solution still has to earn confidence.
Today, 27 June, the Secretariat issued its statement for Micro-, Small and Medium-sized Enterprises Day. The global figures are a useful reminder of scale: MSMEs account for about 90% of businesses, 60–70% of employment, and roughly half of GDP worldwide.1 The ILO estimates that MSMEs provide around 70% of employment worldwide, while about 80% operate in the informal economy.2 Those are not abstract proportions. They describe people making decisions about whether to register, take on a worker, or keep a business going through an uncertain month.
The numbers in our own work
As of today, the Founders Assembly has 1,000 members across 49 countries and has received 2,756 reports from 50 countries. The reports are distributed across the councils as follows: Platform, 1,406; Cashflow, 747; Fair Play, 231; Trade, 140; Red Tape, 121; Resilience, 58; and Team, 53. Reports come from one more country than our seated membership does; that difference is a reminder that participation and membership are not the same measure.
Within the Team Council, 67 members from 28 countries have contributed 53 reports from 20 countries. The median amount at stake in those reports is approximately US$3,139. Twenty Team Council reports have come in during the last 30 days alone. The situations reported concern hiring costs. Among the reporting businesses, 40% are currently just one person; 38% have 2–9 people, 19% have 10–49, and 4% have 50–249. These numbers show why “first hire” is not a narrow issue. For many owners, the decision to hire comes before a business has a finance department, a human-resources team, or spare time to interpret a complicated process.
International comparisons also help locate the question, though they cannot replace member evidence. The OECD’s 2026 Taxing Wages publication reports an OECD-average tax wedge of 35.1% for 2025; the country notes include 49.3% for Germany. A tax wedge is a defined measure of the difference between employers’ labour costs and workers’ take-home pay. It does not capture every cost or administrative burden a small employer faces, but it helps explain why the structure and timing of employment costs matter.3
One member’s experience
One anonymous member’s account put the first-hire question in concrete terms. The member was working alone and weighing whether to bring in a first employee. The uncertainty was not just the headline monthly wage. It was the total cost after contributions, the steps needed to register payroll, and the difficulty of knowing what the obligation would look like in the months ahead. Without a clear, predictable calculation, the member could not confidently commit to the hire.
We do not publish identifying details, and we do not need them to understand the policy problem. A small employer should be able to see the steps, estimate the cost, and know when each obligation begins. That does not mean removing protections or pretending that employment has no public cost. It means asking whether the system can make compliance understandable and the first hires affordable enough to happen formally.
What we are learning
First, the first hire is a threshold decision. A cost or registration process that a mature business can absorb may deter a one-person business from creating a job at all. Second, simplification and affordability are related but distinct. A one-stop registration process can reduce time and confusion; it cannot by itself change the cost of contributions. A phased contribution structure can change the timing of costs; it must still be designed so that it is understandable and does not create unfair incentives. Third, our evidence must travel across countries without pretending that every country has the same tax system. We need to identify a common problem and describe options that local institutions can adapt.
The OECD’s reported tax wedge figures are one comparison, not a verdict on any country. The ILO’s estimate of informality is a call to make formal work more attainable, not an excuse to weaken workers’ rights. Our task is to hold both truths at once: small employers need a workable path into formal hiring, and employees need the protections that formal employment is meant to provide.
What comes next
The Platform Fairness Standard consultation remains open until 2 July. In July, the Secretariat will publish the second-quarter report, and the Cashflow Council expects to bring its CF-001 draft forward on 21 July. For Team Council, the next stage is continuing the evidence work: comparing first-hire costs, testing which administrative steps are genuinely duplicative, and examining what a phased contribution approach could look like in different systems. Our agenda is still at the evidence stage, and we will say so plainly as it develops.
Our process remains the same for every issue: reports, the five-part pattern test, a draft fix, public consultation, an Assembly ballot, and then letters to the decision-makers able to adopt it. Each step should make the next one more accountable. The aim is not to produce a statement that sounds good; it is to produce a proposal that can be examined, improved, and acted upon.
Thank you to Ana in São Paulo, David in Toronto, and Marta in Leipzig for making time to contribute to the Council’s work this month. Thank you as well to everyone who filed a report, checked a number, or helped another member describe a difficult decision clearly. The evidence belongs to the people who shared it. Our responsibility is to handle it carefully and turn it into something useful.
With respect,
Nikola JurićChair, Team CouncilLeipzig, Germany