1099s Driving Payroll Convergence
Anthony Mironov, CEO of Wingspan, on why 1099s are eating payroll
Payroll is turning from a back office tool into the control point for the whole workforce stack. Once a platform handles both W-2 employees and 1099 contractors, it can keep onboarding, payments, tax forms, benefits, and compliance in one system, instead of letting customers bolt on Bill.com, QuickBooks, or point tools. That is why PEOs, HCM suites, and vertical SaaS companies are all moving toward the same product shape.
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The old boundaries were functional. PEOs handled employment and benefits, HCM software handled HR workflows, and vertical SaaS handled an industry workflow like scheduling or job management. Embedded payroll and contractor APIs now let each category add the others' functions without rebuilding everything from scratch.
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The customer reason is simple, mixed workforces are now normal. A business may have 50 employees, 500 contractors, and several departments touching each engagement. If contractor onboarding, W-9 collection, identity checks, invoicing, and payouts live outside the main HR system, the company ends up duplicating work across finance, HR, and operations.
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The competitive split is build versus partner. Rippling is extending contractor capabilities inside its own suite, while Insperity used Wingspan to launch white label contractor management under its own brand. Gusto is doing a similar rebundling motion through embedded payroll for banks and vertical SaaS platforms.
The end state is fewer standalone payroll products and more workforce operating systems that combine software, payments, and financial services. The winners will be the platforms that become the default place where businesses hire, classify, pay, and support every kind of worker, because once money and worker data live in one place, the next products are easy to add.