Using "associate" or something along those lines is extremely common. It does seem a bit more pleasant and it also steers clear of employee vs. contractor legal distinctions.
I've worked in a couple of different industries, and from what I've seen an associate is generally a title for junior staff. After a few years, most graduate some type of specialist or project management job title.
This wasn't the case for the company I worked at. It applied to everyone of every rank. Not as a title, but just a general descriptor used in place of "employee" or "personnel".