A first hire should not feel like a leap into the dark

Dear members,

July has been a month of turning evidence into a more usable case. Our question remains practical: how can a small employer take on a first or early employee without facing a maze of registrations, unclear costs and rules that are hard to plan around? The answer we are working toward is not a special exemption from responsibility. It is a fairer, simpler route into formal employment.

What moved this month

On 21 July, the Cashflow Council published its draft CF-001 for consultation. The Platform Council’s revised PL-001 also advanced, and Fellows were confirmed by ballot. The Secretariat’s second-quarter report gave members a further account of the Assembly’s work. These are important steps across Reseated, but they do not change our own task: make the case for small employers using evidence that is specific enough to be acted on.

For the Team Council, the most immediate work was evidence gathering. On 26 July, we filed RC/TM/2026/S.3, our third evidence submission. On 27 July, we wrote to the European Commission on relief for first hires in RC/TM/2026/23. Those documents build on our earlier call for evidence and our letters to the OECD and the ILO. They are different parts of the same effort: record what hiring costs look like in practice, explain how those costs can affect a decision to employ, and ask institutions to consider workable options.

We are not asking anyone to accept a claim simply because it sounds plausible. A change to employment costs has to be judged carefully: it should make formal hiring more attainable without making the rules

confusing, shifting costs unfairly, or leaving workers less protected. That is why we need both individual accounts and a pattern across many businesses.

The numbers behind the work

As of 27 July, the Team Council had 80 members in 32 countries and had received 84 reports from 28 countries. Thirty-one reports had arrived in the preceding 30 days. The median amount members said was at stake was about US$4,220. The most reports came from Canada (17), the United States (10), Germany (7), Brazil (5) and Italy (5); Argentina, Mexico and the United Kingdom each contributed three.

The mix of members matters. Forty-three per cent reported teams of two to nine people, 14 per cent teams of 10 to 49, and 6 per cent teams of 50 to 249. Thirty-seven per cent were currently working alone. A hiring-cost standard must therefore speak both to the person weighing a first employee and to an employer already managing a small team. It cannot assume a payroll department, dedicated tax staff or the capacity to absorb a surprise bill.

The wider context is substantial. The ILO estimates that micro, small and medium-sized enterprises account for around 70 per cent of employment worldwide, and that about 80 per cent operate in the informal economy.¹ The OECD’s 2026 Taxing Wages figures put the average tax wedge across OECD countries at 35.1 per cent for 2025, with significant differences between countries. These figures do not tell us what any one member should pay. They do show why clear, comparable information matters when we discuss the cost of formal employment.²

One member’s account

One member, a solo business owner in Germany, described reaching a point where the work was there but the decision to hire still felt uncertain. The difficulty was not simply the headline wage. It was having to work out the total cost, understand which registrations were required, and feel

confident that the first estimate would still be reliable once the employment relationship began. The member wanted help, but did not want to make a commitment before knowing the obligations that would follow.

The obstacle was not a lack of work. It was not being able to see the full cost and steps clearly enough to plan the hire.

That is the distinction we need to keep visible. A business may be ready to grow its work before it is ready to navigate several separate processes or cope with costs it cannot forecast. A simple registration route and predictable rules would not remove every cost. They could make the decision more informed and reduce avoidable uncertainty. We will continue to protect the member’s anonymity; the account is shared to illuminate a recurring problem, not to identify a business.

What we are learning

First, the first hire is not a single moment. It is a chain of decisions: estimating total cost, registering correctly, meeting ongoing obligations and keeping enough cash available. A proposal that addresses only one link may leave the real barrier in place.

Second, the same policy will not fit every country. Members’ reports come from different systems and different stages of business growth. The Council’s job is to identify common design principles while being honest about those differences. Phasing contributions for a business’s first ten hires, simplifying payroll registration through a one-stop process, and making rules more predictable are proposals to examine, not substitutes for careful design.

Third, formalisation is not achieved by telling small employers to do better while leaving the route difficult to understand. The ILO’s estimate of informality is a reminder that the design of the system matters. Formal

employment must be possible to enter and maintain in practice, while preserving workers’ protections.¹

What comes next

We will keep building the evidence for TM-001, the Fair Hiring Cost Standard. The First Ten Hires cost diary and our employment-cost comparison remain ways to gather concrete experience, not a promise that every country will use the same formula. Please continue to report the steps, costs and uncertainties that affect your decision to hire. Specific detail helps us separate a one-off difficulty from a pattern that policymakers can address.

Across the Assembly, the next scheduled milestones are the Platform Fairness Standard ballot on 13 August and the planned letters to platform CEOs on 20 August. The CF-001 consultation is due to open on 25 August. These are upcoming dates, not completed outcomes. For our Council, the next work is to use the evidence already gathered, test the clarity of our proposals, and make sure the next draft can be understood by a small employer without specialist help.

Notes and sources

Sources

1. International Labour Organization: Micro, small and medium-sized enterprises
2. OECD Taxing Wages 2026: Germany country note