Online elderly caretaker marketplace HomeHero of Santa Monica is offering 1,200 of its independently contracted workers employee status.

The move is one of the largest changes of workforce status by an on-demand startup in recent years and will greatly multiply HomeHero’s staff, which currently stands at 30 full time employees. HomeHero is claiming that the mass hiring will make it one of the largest homecare providers in California.

HomeHero helps match in-home independent caregivers with elderly clients through an algorithm and by facilitating online video interviews. The website also provides automated scheduling, payments and email updates and sends text messages when caregivers clock-in for their shift.

HomeHero decided to offer its contractor workforce employee status so that the company could sign lucrative in-home care deals with hospitals, said HomeHero Chief Executive Kyle Hill. Under Internal Revenue Service rules, HomeHero could not direct its independent contractors to complete healthcare checklists or to follow strict patient privacy guidelines, controls the company needed to win hospital business, said Hill.

“The data collection that we want to do, to truly integrate ourselves into the hospitals, particularly accepting patient health data and sending information back to the (electronic medical records), that would require W-2 employee status,” said Hill. “We instruct the caregivers to collect an enormous amount of information about the patient after the shift is over. You can’t do that with 1099 workers.”

The process of switching all HomeHero’s independent contractors to employees will likely take three months, said Hill. The company would prefer if its contractors came on as full time employees, but depending on demand for caretakers in different regions, it would be open to hiring some on a part-time basis, he said.

“We are going to sit down and have a one-on-one conversation with every caregiver and offer them employee status,” said Hill, adding that the company had hired additional staff to help handle its ballooning workforce. “They are keeping basically the same wage and then you are tacking on workers’ comp, healthcare, unemployment and other benefits on that as well.”

Technology reporter Garrett Reim can be reached at greim@labusinessjournal.com. Follow him on Twitter @garrettreim for the latest in L.A. tech news.