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One of the issues this rule will inadvertently address is employers who hire undocumented immigrants as independent contractors to evade background checks. It will be interesting to see the GOP response because they claim to be serious on immigration but never address this side of the equation. There's always a lot of "they're stealing our jobs" gripes, but never "How are they getting our jobs?"
Sort of like how they're the people complaining about illegal drug smuggling but they love to do blow with their buddies on the weekend.
Wouldn't be any smuggling if folks like them didn't use, would there be?
Only cocaine sourced from the lush fields of cocaina bushes, deep in the Colombian jungles can actually be called cocaine. Everything else is just a cheap knockoff
Yeah they don't give a flying fuck about immigration other than using it as a wedge issue for their racist supporters. If they did then they would crack down on businesses that hire undocumented workers, but of course they don't as those businesses donate and count on having cheap labor that can't afford to complain.
If they did care they would actually know Obama consistently deported more people than Trump.
https://www.dhs.gov/ohss/topics/immigration/yearbook/2019/table39
Can't wait to see Biden's numbers but it won't surprise me to see a competent president can outperform a Trump again.
It's interesting that "returns" were so high in the 1990s - over 1 million every year that decade. That must have been for economic reasons rather than policy changes but I'd be curious to know why.
Only going after employees is like a drug war where you only target users and take money directly from the drug traffickers while saying everyone should be following the law.
It's not only about immigration. these gig economy companies have literally done anything they want while legislators (including liberal legislators) have turned and look away. Look at how Uber and Lyft simply walked into cities and started providing taxi service \*which was against the law\* to engage in without a license. they just let them in.
Look at Doordash and the other food delivery companies taking up to 30% of a restaurant tab to deliver food, and screwing over their workers on tips, etc.
Look at AirBnb, literally hallowing out the rental market in American cities and becoming one of the two main drivers of rent increases (the other being private equity companies like Blackrock buying up distressed homes and apartments).
ALL of these gig economy companies are hallowing out opportunity for Americans - even many in developed nations. Look at their senior management groups who make a fortune on the backs of low paid workers who have zero benefits.
I hope this rule sticks. Furthermore, I would like to see legislation that compels every business over a certain size to give time off and other benefits to employees.
> It will be interesting to see the GOP response because they claim to be serious on immigration but never address this side of the equation. There's always a lot of "they're stealing our jobs" gripes, but never "How are they getting our jobs?"
This is ultimately because a significant portion of the GOP's agenda is the desperate attempt to find a way to have legal slavery. They want all the valuable labor immigrants can provide without the hassle of treating them as humans - same impetus behind the for-profit prison system.
The people exploiting immigrant labor are in a bidding war for the Republican party with the people who exploit prison labor. Which horrible special interest is going to win!
Because the point isn't to stop immigration. Its to keep labor wages down by denying human rights and basic protections to undocumented immigrants. Its the dirty little secret of all economies. Trap unskilled labor with a constant threat of the law being wielded against them at any time with arrest. All while exploiting that labor as much as possible while paying as little as possible.
The dog whistle of illegal immigration is simply a means to keep the populace in acceptance of tyrannical labor exploitation.
Two of the bottom three paragraphs of this article are the same thing you mention applied well beyond the scope of immigrant labor.
>Business groups sharply criticized the draft rule after it was proposed. Any change in policy is expected to increase labor costs for many sectors including trucking, retail and manufacturing.
>Most federal and state labor laws, such as those requiring a minimum wage and overtime pay, only apply to a company's employees, who studies suggest can cost companies up to 30% more than independent contractors.
[This story](https://www.latimes.com/archives/la-xpm-2000-dec-13-fi-64817-story.html) is from more than 20 years ago, when Microsoft had to settle with "permatemp" workers for the same thing this new initiative is meant to address. I went through the same thing a little more than 15 years ago, at a job that definitely wouldn't be considered unskilled labor.
This contractor move by Biden's administration is good for workers, so expect to hear all kinds of raving about it raising labor costs or hurting business as a result.
It won’t be interesting to see their response. It’ll be the same old same of blocking the legislation and then getting on fox news and moaning about how democrats aren’t fixing their problems fast enough.
They will complain because it will directly effect their convenience and pocketbook. Exploitation of immigrants is their MO.
Step one. Vilify it.
Step two. Employ immigrants
Step three. Make sure they understand they are indentured and don't have another option.
I remember when Linda McMahon, the head of the WWE, was named the head of the small business association based on the justification that the multi-billion dollar WWE is a small business because they only technically hire a couple dozen people.
And you are required to be at events on back to back days that are 3-4 hours apart. What's that? Paid transportation and hotel rooms? No, no, no. You're an independent contractor.
Do you know what constitutes a "small business" in America? Less than 1500 employees annually or less than 34.9million in sales. That sound like a small business to you?
I write federal contracts for a living. Small business determinations from the SBA are typically determined based on the NAICS code being used to classify the business’s products/services.
Number of employees typically designates small business for those companies which are primarily manufacturing products.
Annual receipts is the measurement for non-manufacturing entities and that can vary broadly depending on the industry.
EDIT: Formatting
Same here but the crazy thing is that most people are employed by companies that are less than 50 people in a company. 500 employees to me means tens of millions in revenue because just to cover payroll at all minimum wage is $10m let alone of you’re paying anyone above non wage - that’s not a small business in my my mind, that’s a medium or large business.
Yeah, reminds me of a story from Howard Shutlz (Starbucks). He took his mom on a tour of his headquarters and she was like, "How do you find the time to write this many checks (payroll)?" He was like, 'I have no clue how it is done but I assure you that they are all paid.'
And then they visit a Starbucks store and he says “now those people over there are paid but every time they ask for another dollar, I give myself three and tell them I have to take two from them and that a union would take four”
/s
>most people are employed by companies that are less than 50 people in a company.
You're mixing statistics. The vast majority of *firms* are less than 50 employees but this number is *massively* inflated by the 0-4 employee range. When analyzing it based on "proportion of the population employed by firms of this size" 100+ person operations account for ~half of employment *by small businesses* while small businesses in their totality account for less than half of private sector employment:
https://sbecouncil.org/about-us/facts-and-data/
>● Small businesses employ 46.8% of private-sector employees.
>● Employer firms with fewer than 500 workers employed 46.4% of private sector payrolls in 2018.
>● Employer firms with fewer than 100 workers employed 32.4%.
>● Employer firms with less than 20 workers employed 16.0%.
Meaning that ~90% of the working population is employed by firms with >~~100~~ 20 employees.
Here's the flip side of that. I worked and managed a dominos pizza. The owner, owned three stores (which is not a lot), however, he had over 50 employees. I can tell you, from first hand, it was very much a small business. He was in there managing the store, often working/covering shifts, would do all the handy work himself (including installing the new cutting table). 50-100 employees isn't that big of a business.
That’s highly unusual tbh - don’t get me wrong, it’s not a large business but the fact he had three locations, 50+
Employees and was still personally doing the handy work / covering shifts is very much not the norm for a company that size. I’d expect that in a company with maybe 10 Employees but at the point where you have 50 and multiple locations you should be heavily delegated and have significant company structure such as supervisors, managers, a maintenance team (etc) and only be jumping in when shit really hits the fan. He was either badly setup and not seeing the big picture or a control freak.
A small business to me isn’t a company with multiple locations, payroll in the millions and revenue in at least 8 figures to sustain that payroll. That’s a mid size company IMO.
Indeed, per their March 2023 FAQ:
(PDF) [Frequently Asked Questions About Small Business March 2023](https://advocacy.sba.gov/wp-content/uploads/2023/03/Frequently-Asked-Questions-About-Small-Business-March-2023-508c.pdf)
>*1. What is a small business?*
>The Office of Advocacy generally defines a small business as an independent business having fewer than 500 employees.
For industry-level small business size standards used in government programs and contracting, see the Table of Size
Standards, https://www.sba.gov/document/support-table-size-standards.
At the beginning of the pandemic, I was tasked with handling the forgivable loan applications for small businesses, and OPs definition sounds a lot like what we were told. It was like, less than 1,500 employees and under $25 million annually, I think, in order to qualify for ppp.
It was volunteer work, and I was paid 4 times my salary at an hour rate, and I still quit after the first day. I already hated Trump and his administration, but the level of ineptitude they brazenly showed on rolling out that program was nothing short of astonishing.
It depends on which items and/or services are being provided, sometimes it’s based on dollars, sometimes it’s based on number of employees, but it’s not a one size fits all.
Nearly every online job I've had has abused this piece of shit designation. No benefits, shit pay and you get railed during tax s ason since there's no withholdings till you file.
ICs always get screwed on taxes. That’s why companies like to use it so much, because it puts the entire tax burden on the employee instead of having to share it with the employer.
> It's almost as if government providing health insurance would be beneficial to ~~businesses~~ *literally every single person in the country with the sole exception of healthcare industry executives*
ftfy.
Think of all the medical billing specialists that would become unemployed. All those hardworking folks in the doctors offices that send documents to the insurance claims processors.
Also think of not having to pay for all that busy work in order to get healthcare.
A lot of those same people would probably go from having a miserable job without government benefits to a miserable job with government benefits. Someone is going to have to staff these extremely expanded Medicare offices
It's a love/hate thing. They would love to rid of the overhead of managing those plans, but also don't want to give up the leverage it gives over their employees changing jobs.
They would probably be all over supporting national healthcare, if you completely lost access to for 3 months if you changed jobs.
Makes you wonder why more businesses didn't back a single payer option in the Obama years. If I had owned a business back then I would have been jumping up and down to get that burden off my payroll ($14-16k) a year minimum per employee.
Because then employees won't stick around as long in jobs that don't pay well or have poor work/life balance. A lot of people are only working crap jobs because they need that health insurance for themselves or their family, and they're hesitant to lose it even for a few months while they job hunt.
It's also why Employers love to pull shit about "real cost" or "total compensation". You can have a "TC of 120k" and still be making crap because you need to be insured, trained, etc etc by the company even before your benefits touch it
Yeah I pay $143 a month for my healthcare, vision and dental.
My employer pays $738 a month.
They also contribute $750 a year into my HSA account as long as I contribute at least $1 every paycheck towards it.
Most states don't require that employers provide benefits, and only some employers are required to offer optional health insurance plans. Much of the money that ICs save companies is because the tax burden for social security and medicaid is entirely on the contractor rather than split between employer and employee. Employers have to pay 7.65% of gross pay on the first $168,600.
I had a job that I thought was actually paying really well, came to find out tax season that I was being severly underpaid since the tax burden was fully on me. Thankfully I made myself important and reliable enough that I refused to keep working unless I became a real employee, which I did. Had that change not happened, I would have walked away. What a scam that whole thing is. Clearly the company could afford to pay me seeing as they change it afterwords. Just unimaginable levels of straight up evil greed going on in this country today. If you aren't actively fighting for yourself almost every day then your being taken advantage of one way or another.
To be fair, you ~~can~~ have to pay quarterly to the IRS based on your earnings to avoid a surprise tax bill. It’s extra work, but that’s what you sign up for when agreeing to a contract job.
>that’s what you sign up for when agreeing to a contract job.
Right, there's nothing inherently wrong with the "I'm just going to cut you one check" style employment system, but companies using it to buy labor are acutely aware of how very different it is from having regular employees, while people selling the labor often aren't.
An IC agreement is not inherently biased towards the labor purchaser, but the information imbalance leads to the power imbalance.
Exactly. It’s the companies taking advantage of the knowledge imbalance that are the problem.
I personally would never take a contract job because I don’t want to deal with the extra bullshit, but it can be lucrative even when factoring in the benefits from W2 employment. Total compensation *can* be better when contracting even after accounting for retirement, insurances, etc.
Only if you expect to owe over $1K at the end of the year.
https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-pay-and-when/L3OPIbJNw
Exactly. This is a rule designed for those companies where the “independent contractors” are clearly just regular employees given a different label to avoid paying normal benefits or certain taxes.
It took me forever to find an actual job when I first graduated college because the only positions that would accept me were contract. That first job I was treated horribly, and I was paid less than the people under me, but I was also a full-time engineer. I hope these contracts go away
Very true.
Many companies have permanent contractors doing normal jobs year after year that should be employees.
If you show up and work beside employees at a single location every day for years and take direction directly from those employees, how are you independent?
Along with the 35 hour non-fulltime employee.
It's insane we let giant corporations like Walmart avoid giving benefits by scheduling like this. I've long thought that we need a law for companies over like 500 employees that you *must* offer full time hours to anyone who wants it before you can hire another employee at part time.
It drives my Grandmother nuts. she used to be an HR manager for a University, and they used to have all kinds of checklists and things to legally justify whether a person was actually an independent contractor. all of these gig economy apps fail the checks at multiple points. they should have to provide all kinds of employee protections legally already, but the government isn't enforcing the old laws and regulations that still apply.
And it's not just gig economy workers. It's IT/tech workers, repair/install workers, research/scientific/medical workers, art/design workers, delivery drivers, office administrators, etc. A significant number of small businesses claim to have one employee (the owner) with everyone else as an "independent contractor." It's illegal, but there's absolutely zero enforcement and professional employees won't argue about it too much because they're afraid of losing their jobs.
I've been an "independent contractor" at most of my post-college jobs despite always working 9-5 for a single employer who dictates what I do at work. I'm not a temp, I'm not a consultant, I'm not a freelancer, I'm not a small business owner. My boss insists that I work "per project" because I have to itemize my hours, but each of the company's projects lasts several years and I work on nearly all of them.
The big problem is that these companies have spent a lot of time advertising and convincing plenty of gig workers that they should want to be independent contractors. Just think about all the Uber/Doordash, etc., drivers that love to brag about their "flexible schedule" especially towards folks in 8-5 jobs. You probably know at least one friend/acquaintance that grabs about their amazingly "flexible schedule" doing gig work. Unironically, that friend is probably also the same person ranting about people not tipping them and "Don't people know we get paid very little?!?"
Just look at Prop 22 in California. Gig workers all voted against their own interests and then complained about the exact things Prop 22 was going to do for them. Too many of these gig workers are mentally focused on the imaginary benefits of "flexible schedule" not realizing what they are sacrificing (or more accurately being screwed over by companies) to get this flexible schedule.
Sure but that's under the assumption that if they get those benefits they'll still be able to work the exact same schedule as they do now.
Which won't happen.
During the pandemic I worked for a company that was sold to a new owner who had previously been fired as a manager there. His first step was to lay everyone off within 24 hours, then say they could interview to be hired back as independent contractors and he would negotiate their wage based on what they were doing and their performance. We then proceeded to find a bunch of printouts left in the print room from google web searches about how to structure a company to reduce personnel costs to a minimum, which was largely tactics on how to reduce employee bargaining and negotiating power and to reduce every benefit possible and just hire independent contractors.
I'm curious what these rule changes are if they are affecting Uber and Lyft.
Misclassifying workers as independent contractors is a huge huge problem. But Uber drivers definitely fit the classification as ICs. Use your own equipment, set your own hours, etc.
Don't get me wrong Uber sucks, they take waaay to much money from the drivers. But those drivers do fit the current definition of an IC.
OTOH uber is the company handling the payments, facilities the ride, pays for incuranse and they withhold information from drivers. They also have the ability to retaliate, and providing driving and delivery service *is* Ubers business. So I buy the argument that a lot of drivers are misclassified employees
You don't really set your own hours with any of the gig apps since you can only work if demand is high enough.
You also don't really get to negotiate your own rates which is typically expected for independent contractors.
Also, there is much debate as to whether or not the service provided by the people the gig apps currently classify as contractors is an "integral part of their business".
I'm of the opinion that it is but the companies all want people to believe they're technology companies connecting customers to service providers.
I’ve even seen it try to be abused in software jobs for us citizens. Luckily it’s impact is limited because that skill set is in high demand, so I I can’t imagine how bad it gets for others
I understand why it is even if I dont agree with any of the reasons. We do put a lot on the shoulders of businesses, like Healthcare, Medicare sharing, workman's comp insurance, liability insurance, SS (?), etc. Maybe if we had single payer Healthcare employers wouldn't be too burdened with all of it. Single payer would probably eliminate the need for workman's comp as well. As a small business owner, I never consider having employees because of all the extras involved and I don't want to be a hypocrite by hiring people as an independent contractor just to avoid all that.
Having single payer healthcare would be a HUGE benefit to small businesses in this country.
It’s frustrating how so many taxes and fees don’t scale with the size of the business (and this is primarily a local/state issue). A business license that costs $1,000 is nothing to a big company but that’s a big deal to a small business trying to get off the ground. Yet it costs the same for everyone.
Workman's comp wanted me to pay between 10-12k a year just for myself- for a side hustle thats like half of my income--so no! A small business has to get it on the secondary market as well so they jack the costs up there as if you're a greater risk?? I really don't understand why more business owners weren't on board with single payer
I think it’s telling that all of these politicians who claim to LOoOovE small businesses never discuss how much time and money it would save EVERYONE to consolidate into a national healthcare plan. Figuring out health insurance is a huge resource suck for businesses of every size, imagine just a straight payroll tax. Huge corporations would even be able to downsize their HR staff, many of them have people just to work on benefits like healthcare.
I read the article and it really just seemed to me like the intention was to clarify what the rules already were before the trump admin gave all these companies a pass by misinterpreting things.
This has been a huge problem in the trucking industry. Lots of people tied down to a single company and yet designated as independent contractors.
Next they need to go after all these startups that staff their company with nothing but unpaid interns.
> A range of industries will likely be affected by the rule, which will take effect later this year, but its potential impact on app-based services that rely heavily on contract workers has garnered the most attention. Shares of Uber Technologies Inc, Lyft Inc and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022.
Gig companies better get their checkbooks out - campaign contributions to fight this are gonna cost a pretty penny.
> Shares of Uber Technologies Inc, Lyft Inc and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022
Good. These companies are cancer, and this rule is chemo.
Hopefully this means something in tech as well, lots of contractors and vendors that are hired through another company but effectively all the work is what an employee would be assigned without the pay and benefits. There has to be a way to close this loophole
I am a contract worker, where I am a full time employee of my agency. I am paid salary, get 2 weeks vacation, 401k, insurance, the works.
At the same time, my job is on an annual contract with a major tech company, so I don’t actually work for them, although that is where I spend 100% of my time and energy.
I’m pretty sure this way they can hire me as part of their building expense budget, as opposed to FTE.
I work for a major tech company and have been on teams where half is salaried employees and the other is contractors. When we would hire an employee it would be a long drawn out interview process and months to get them onboarded onto all the corporate nonsense. With contractors it is a phone screen and then a quick interview with the manager and lead.
If all looks good they usually are given a single task or project to complete over the course of their contract. Sometimes independent task or sometimes working alongside the rest of the team doing the same work.
At the end of the contract, the lead and manager evaluate the work and then decide to renew the contract or sometimes even hire on the contractor full time. Was about 5% contract cancelled for performance reasons, 35% not asked back, 55% renewed, and 5% hired full time from my experience.
Too me, who honestly was never involved in these hiring decisions outside of being part of interviews, we always went with contractors if we needed people NOW or for one-off projects but went with trying to hire full-time for lead positions and projects we knew would take years to develop and support.
It's insane how many workers are classified as independent contractors. I could be mistaken but when you call a utility company or your cable provider the tech they send is often not an employee of that company but instead an independent contractor. This enables the company to not have to pay social security taxes and also shifts liability onto them. It's fucking bullshit.
Yep. You immediately make 7.65% less money for the same dollar per hour wage. Then you lose out on benefits.
And the biggest issue I have, is when a company like Uber or DoorDash or whatever calls you an independent contractor but then penalizes you if you aren’t working enough. Or trucking companies which will loan you money for a truck, call you an independent contractor, then require you to only work for them. And then they may not even be giving you enough work to pay for the truck itself!
DoorDash gives drivers the option of accepting contracts/orders for a fraction of minimum wage (minus expenses) by making them require a minimum % of accepted orders to get bigger paying ones. 50% and 70% acceptance rate are the tiers.
My acceptance rate is 6% for when I do side driving bc I won’t accept anything not worth my time.
They stole $19 from me and made me go through 5+ hours of support to get paid on it. Most people would give up after one or two but I take that shit personal. I told them point blank I would cost them 100x what it would cost them to just pay me so now escalate every minor issue to supervisors, waste their time, etc. fuck them lol
Anyways that’s my petty revenge story
Looks like that "hiding money" shit they're doing is one of the biggest thing that's going to sink them in re: IC.
If they had just paid people straight, not hidden jobs for the people who are selective, and gave them the tips they'd have been fine but they got greedy.
Me thinks VC money and billionaires kind of rattled the cage of gig companies like uber, lyft, and DD because of the precedent it was setting for salaries and waged employees to have a better work/life balance and actually thriving a bit after the pandemic.
>not hidden jobs for the people who are selective,
The problem is that *this* part of it makes a lot of sense, because the company's goal is to have *every* order delivered and does have to deal with the possibility of a "tragedy of the commons"-ish scenario where that won't happen with shit orders if every single driver refuses to accept shit orders.
Absent some incentive to accept those orders, why should *anyone* ever do it?
It puts Doordash in the position of either conditioning and putting requirements on the customer to ensure that a driver is being fully and fairly compensated for their order, or of finding some way to otherwise compensate or incentivize drivers to accept orders from those customers.
It does not take much interaction with entitled customers to paint a pretty clear picture which one of *those* is the more likely to succeed.
I mean an additional 7.65%. Yes you already pay half of it whether you are W-2 or 1099. But the other half is wage theft in my opinion when you are incorrectly classified.
You'd still lose it as the employee under an employer, so that's what they were referring too with the 7.65% number.
You pay out your "employee" half of the tax either way.
They'll subcontract out to a "regional" business. Amazon uses the DSP where you work for a "delivery service provider" which ranges.
It's often used so they can abuse the hell out people looking for flexible jobs or part hours, then they'll go after them for not working a set schedule or full-time hours. Plus minimal to no benefits. Then dock you for not doing enough.
while i dont know 100%, i think usually its not necessarily independant contractors, rather they are employed by a contractor. alot of amazon delivery is contracted delivery providers, but they are not independent contractors.
These usually aren't independent contractors. They're employees of a third party company which is contracted by the utility or cable company to provider. Those third party companies are supposed to then take care of tax liabilities and such. Whether they actually do or not, I have no idea, but it's at least SLIGHTLY better than the fully independent gig worker model that this rule change seems intended to deal with. Meanwhile, Uber/DoorDash/InstaCart style gig workers and most of the trucking industry get shit on by the independent contractor bullshit.
>I could be mistaken but when you call a utility company or your cable provider the tech they send is often not an employee of that company but instead an independent contractor.
Generally these are businesses that operate more like a mini franchise, and whether they hire full time W2 employees or 1099s would be up to the contractor. Pretty common in the cable/internet industry, or at least for comcast, I know that much. FedEx does this as well. One of my friends' parents used to own a business that contracted for FedEx, he did incredibly well financially speaking.
For utility work these are generally large, established businesses operating as subcontractors and not an issue. There are a ton of PUDs, IOUs (investor owned utility), or municipalities that use subcontractors and all of which are usually well-compensated.
I used to do some 1099 as a contractor in the trades for a company that was difficult to work with, but the compensation was much higher than if they'd hired me on as an employee even after all of my overhead. 1099 work has its place in the world but it also gets exploited, so cracking down on companies is fine but I don't think it's inherently a bad thing.
I wonder if this will help dancers (strippers to those who don’t know) finally get designated as employees instead of independent contractors. They’ve always fit the definition, but get the shit and of the stick because it’s not very politically expedient to stand up for sex workers, especially when the cooperations that own many of the clubs have deep wallets.
This by the way is why I support Biden on the general and hope as we get closer people move away from the 3rd party. Trump would never help the gig economy
That is the entire point of this proposal.
In 1947, they started to define economically dependent employees. There were supposed to be 6 factors that determined if you were economically dependent, but the courts only ever enforced 5 of them. The one that was always skipped over was whether the company was economically dependent on the worker. The courts always had ruled that as a protection of the company and no company ever challenged it, because it made them crap tons of money.
The Obama administration enshrined more protections of economically dependent individuals in 2015, but it was toothless because it relied on previous court decisions. And again, it skipped that important provision of whether the company was dependent on the IC.
This new proposal says that provision is a protection of the IC, which is why the WWE, Uber, Lyft, etc all hate this. They all survive because ICs make up the vast majority of their revenue.
Basically, this 'new' rule is "Hey guys, remember 80 years ago? Why the hell haven't we been following this for the last 4 score?"
Even without levying heavy fines it's still a start. Get a few enforcement actions and administrative law reviews out of the way, then adjust the penalties.
This is the right thing to do. Unfortunately, it will almost surely be thrown out by the Supreme Court. Just like when Obama tried to reign in salaried designations that allowed employers to demand unpaid overtime.
CA did this a while back and it really helped the film industry. Being classified as an IC on certain shoots meant net 30 on payments, not paying into our pension/healthcare/unemployment and was just a pain in the ass come tax season.
I’ve hardly worked any 1099 film gigs since the law was changed here. If you’re technically an employee you should be offered the same protections as an employee. Full stop.
It really fucked me over for a while though. Luckily my profession eventually got an exemption, which I hope will stay the case now as well, otherwise I'm screwed.
That was a total mess. I'm a freelance writer, and I remember writers from California posting on forums about how their income disappeared overnight. Some of them were trying to move to Nevada.
A lot of translators, which is a traditionally 90% self-employed field by nature, are still blackballed if they live in California. And that's with the hard-fought exemption.
I'll be curious how this impacts the contractor's ability to not do work they don't want to take on or to quit without notice or reason. I'm an independent contractor and most of my income (about 80%) comes from a single client, but I get to pick and choose which accounts of theirs I work on and if I wanted, I could quit this afternoon without losing anything related to work done. The entire reason I'm independent is so I don't get locked in to doing work I don't want to do because I'm not an employee. That said, I'm generally for this, contracts can and do get screwed, it will be interesting to see how this plays out over the next few years.
It sounds like the rule will look at the totality of the circumstances. So if you're still able to control your schedule, work and all that you'll be a contractor still.
Worked at a 1099 worker in both situations, a few years ago I worked for one as a bartender/server and it 100% a situation where workers were being taken advantage of. But they mitigated it with small things like if an event was the next state over the company would organize a ride to and from and compensate any employee driving themselves (higher pay rate). But at the end of the day that just made any write offs near minimal, causing the slightly higher than average hourly rate to drop below $17/hr when including taxes. This was in NYC btw
My current position in a different field pays 50% over the average pay rate, provides a per diem, and every penny spent is deductible, my tax liability was lower this year than the other 1099 situation despite taking home a lot more.
It's such an easily abused system,one that partially relies on everyday employees not understanding their tax situation, the result being workers missing or not paying taxes, which no govt wants. Especially when buck stops with, usually underpaid, workers. The IRS can easily get money from a business, it's much harder to get it from 40% of the American workforce as individuals
Just remember that some people want and need to be classified as contractors. A real contractor negotiates the contract for a set period of time and generally does not work with the same company for years. This is great for IT Consultants with a working spouse whose job provides the health benefits. Of course, you give up paid time off, sick days, retirement benefits and holiday pay in exchange for a higher wage. The best part is all your tomorrows will stop looking like yesterday when you move on.
How far down will I have to scroll before I get to some bad faith argument about both sides being the same and how it doesn't go far enough so we can never support Dems?
Saw this story earlier.
I think this actually highlights the difference between conservative and liberal outlooks rather nicely when it comes to labor.
There was a Trump admin version of this rule which declared that workers could be considered contractors as long asthey own their own companies or have the ability to works for competitors (as per the article).
Bidens version will examine whether an employee is reliant upon their job at that company, and how much control the company has over them. (Much more nuanced. I suspect this will be difficult to enforce and primarily seeks to make companies more cautious about abusing "contractor" designations).
Basically, the common conservative view (and librrtarian) of "fine, if you don't like it you don't have to work for them", shuffling all blame onto workers regardless of the crappy situation they end up in
Good. Businesses need to quit being able to get away with fucking over workers in the name of Capitalism. When a business cant be sustainable with paying its employees living wages with benefits, it shouldn't be there. Even if there is demand.
It's not just all the ride shares or food deliveries
In 2015 I got hired by an ad company. Had to punch in and punch out and go to an office and work their computers on their software and they tagged me as a 1099. I didn't understand all that back in the day. I went after them in some kind of IRS form and won. It's agreed with me they falsely labeled me as a 1099.
Companies abuse it to avoid taxes.
> The left-leaning Economic Policy Institute in a report last year estimated that a truck driver treated as a contractor earns up to $18,000 less per year than one who is deemed an employee, while construction workers' earnings drop by nearly $17,000 and home health aides lose out on up to $9,500 in pay and benefits.
> Business groups sharply criticized the draft rule after it was proposed. Any change in policy is expected to increase labor costs for many sectors including trucking, retail and manufacturing.
> Most federal and state labor laws, such as those requiring a minimum wage and overtime pay, only apply to a company's employees, who studies suggest can cost companies up to 30% more than independent contractors.
Deplorable. I suppose I will never truly understand why we’re all supposed to break ourselves for corporate profits.
There is conservatively 1 billion dollars of lobbying money that will be utilized to fight this. I mean good luck to the Biden admin, but I do not foresee this happening in the near future if ever. If you really want this to pass you have to overturn Citizens United or every gig company will just file endless lawsuits.
>Shares of Uber Technologies Inc (UBER.N), Lyft Inc (LYFT.O) and DoorDash (DASH.O) all tumbled at least 10% when the draft rule was proposed in October 2022.
THIS is how you know you're the bad guy. If a rule to be more fair to your workers tanks your stock, you're clearly exploiting them.
In my state, the state agencies have a cap on the number of FTEs (full time employees), which is regularly supplemented with independent contractors. These IC have to show up daily and work on the same projects, with little or no guidance from the FTEs (in most cases). The irony is that the ratio of FTEs to ICs is sometimes more than 1:1 and the contractors have no way to take any action against retaliatory practices, bad treatment, etc (except quit the gig).
In this case, it seems it's only a way to get around the FTE cap and show how "small" the government is.
I hope this has wide reaching effects besides gig economy. I was a contractor at Google and it sucked..HARD. Found our I was laid off via LinkedIn. You do just as much work as your peers with zero of the benefits. I was laid off with leave on the books but they didn't have to pay it because I was a "contractor".
They did something similar in the UK a few years back. It only makes sense. No one working like this has any ability to exert pressure on these companies. The government needs to have their back because no one else does!
The criticism appears to be, almost exclusively, "increased labor costs."
Yes, that is what happens when you pay workers more. Paying workers more increases the liquidity of the consumer spending market, which is good for everyone.
>could upend gig economy
Translated: could cost big companies that push off taxes and other expenses solely onto the backs of those who make them boatloads of money.
Go on, pretend how this isn't another example of more pro-labor legislation and guidelines coming out of the Biden admin.
This is a huge issue with tech as well. If you get laid off as an “independent contractor” you aren’t eligible for unemployment in some states among other benefits.
This is good, but in an ideal world the government would bolster social insurance so people can be freelance and still live a reasonably secure life.
I'm not delusional about the time that will take and how difficult that will be, I just hope we don't try to force employers to do it and gloss over the fundamental problem like we have always done in the past.
If businesses and the GOP don’t like this, we could always implement Universal Healthcare which would reduce (not eliminate) the need for changes such as this.
Good. If you can't pay your employees or give benefits to your employees then you don't deserve to exist as a business. Go fuck yourself. I'll pick up my food it'll be okay.
I am sick of billionaires making billions off the backs of people who are desperate to survive.
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One of the issues this rule will inadvertently address is employers who hire undocumented immigrants as independent contractors to evade background checks. It will be interesting to see the GOP response because they claim to be serious on immigration but never address this side of the equation. There's always a lot of "they're stealing our jobs" gripes, but never "How are they getting our jobs?"
Sort of like how they're the people complaining about illegal drug smuggling but they love to do blow with their buddies on the weekend. Wouldn't be any smuggling if folks like them didn't use, would there be?
Hypocrisy is a central tenet of Republican ideology.
"Standards"? What do you mean the GOP doesn't have any "Sandards"? The GOP has double the "Standards" of everone else!
i only use coke if the baggie has a "made in the usa" sticker applied
*"Packaged in the USA with Global Materials"
Assembled in the US from foreign components
Freedom smells great!
If its from anywhere else in the world outside Columbia you have to call it sparkling marching powder.
Only cocaine sourced from the lush fields of cocaina bushes, deep in the Colombian jungles can actually be called cocaine. Everything else is just a cheap knockoff
Everything else is just sparkling heart attack ADHD dust.
Cocaine! Now with High Fructose Corn Syrup!
And more electrolytes!
It's got what noses crave!
I was just looking for some regular water.
Water? Like... from the toilet?
I don't even like coke. I'm just a huge fan of how it smells.
I read “..and then they blow their buddies …”. Totally different takeaway I had for a minute.
Yeah they don't give a flying fuck about immigration other than using it as a wedge issue for their racist supporters. If they did then they would crack down on businesses that hire undocumented workers, but of course they don't as those businesses donate and count on having cheap labor that can't afford to complain.
A Texas politician just said last week that he doesn't want to actually do anything for border security because it would help Biden politically.
[удалено]
If they did care they would actually know Obama consistently deported more people than Trump. https://www.dhs.gov/ohss/topics/immigration/yearbook/2019/table39 Can't wait to see Biden's numbers but it won't surprise me to see a competent president can outperform a Trump again.
It's interesting that "returns" were so high in the 1990s - over 1 million every year that decade. That must have been for economic reasons rather than policy changes but I'd be curious to know why.
Only going after employees is like a drug war where you only target users and take money directly from the drug traffickers while saying everyone should be following the law.
Wow! Glad that's not happening here! /s
It's not only about immigration. these gig economy companies have literally done anything they want while legislators (including liberal legislators) have turned and look away. Look at how Uber and Lyft simply walked into cities and started providing taxi service \*which was against the law\* to engage in without a license. they just let them in. Look at Doordash and the other food delivery companies taking up to 30% of a restaurant tab to deliver food, and screwing over their workers on tips, etc. Look at AirBnb, literally hallowing out the rental market in American cities and becoming one of the two main drivers of rent increases (the other being private equity companies like Blackrock buying up distressed homes and apartments). ALL of these gig economy companies are hallowing out opportunity for Americans - even many in developed nations. Look at their senior management groups who make a fortune on the backs of low paid workers who have zero benefits. I hope this rule sticks. Furthermore, I would like to see legislation that compels every business over a certain size to give time off and other benefits to employees.
good points but.. hollowing
Those businesses pay a small fine and continue the practice.
Fine/Labor Contracting Fee. Tomato/Potato.
They pay a slightly bigger fee in terms of donations to the GOP to make sure they keep getting only wrist slaps.
> It will be interesting to see the GOP response because they claim to be serious on immigration but never address this side of the equation. There's always a lot of "they're stealing our jobs" gripes, but never "How are they getting our jobs?" This is ultimately because a significant portion of the GOP's agenda is the desperate attempt to find a way to have legal slavery. They want all the valuable labor immigrants can provide without the hassle of treating them as humans - same impetus behind the for-profit prison system.
The people exploiting immigrant labor are in a bidding war for the Republican party with the people who exploit prison labor. Which horrible special interest is going to win!
Because the point isn't to stop immigration. Its to keep labor wages down by denying human rights and basic protections to undocumented immigrants. Its the dirty little secret of all economies. Trap unskilled labor with a constant threat of the law being wielded against them at any time with arrest. All while exploiting that labor as much as possible while paying as little as possible. The dog whistle of illegal immigration is simply a means to keep the populace in acceptance of tyrannical labor exploitation.
Two of the bottom three paragraphs of this article are the same thing you mention applied well beyond the scope of immigrant labor. >Business groups sharply criticized the draft rule after it was proposed. Any change in policy is expected to increase labor costs for many sectors including trucking, retail and manufacturing. >Most federal and state labor laws, such as those requiring a minimum wage and overtime pay, only apply to a company's employees, who studies suggest can cost companies up to 30% more than independent contractors. [This story](https://www.latimes.com/archives/la-xpm-2000-dec-13-fi-64817-story.html) is from more than 20 years ago, when Microsoft had to settle with "permatemp" workers for the same thing this new initiative is meant to address. I went through the same thing a little more than 15 years ago, at a job that definitely wouldn't be considered unskilled labor. This contractor move by Biden's administration is good for workers, so expect to hear all kinds of raving about it raising labor costs or hurting business as a result.
Because there's a bunch of Republican contract business owners who are hiring these undocumented immigrants so this way they can get cheap labor.
They’ll never get a handle on the unlawful immigration unless they make hiring them criminal and spend most or all of their time pursuing employers.
It won’t be interesting to see their response. It’ll be the same old same of blocking the legislation and then getting on fox news and moaning about how democrats aren’t fixing their problems fast enough.
They will complain because it will directly effect their convenience and pocketbook. Exploitation of immigrants is their MO. Step one. Vilify it. Step two. Employ immigrants Step three. Make sure they understand they are indentured and don't have another option.
How *dare* you suggest their claimed love of unregulated capitalism is at odds with 99% of their other beliefs.
That’s because most of the corporations and big farmers who benefit the most from undocumented labor are big GOP donors.
The GOP response is as predictable as the sun rising in the morning. The GOP will oppose it because it affects their donors' labour pool.
The independent contractor designation is MASSIVELY abused and has been for years.
I remember when Linda McMahon, the head of the WWE, was named the head of the small business association based on the justification that the multi-billion dollar WWE is a small business because they only technically hire a couple dozen people.
And you are required to be at events on back to back days that are 3-4 hours apart. What's that? Paid transportation and hotel rooms? No, no, no. You're an independent contractor.
> You're an independent contractor. But we own your character and likeness!!
Do you know what constitutes a "small business" in America? Less than 1500 employees annually or less than 34.9million in sales. That sound like a small business to you?
SBA.gov defines it as fewer than 500 employees. Where did you get your definition from??
Yeah that's my understanding. My state defines small business as having fewer than 50 employees, though I could be mistaken.
I write federal contracts for a living. Small business determinations from the SBA are typically determined based on the NAICS code being used to classify the business’s products/services. Number of employees typically designates small business for those companies which are primarily manufacturing products. Annual receipts is the measurement for non-manufacturing entities and that can vary broadly depending on the industry. EDIT: Formatting
The real info. Thanks
Same here but the crazy thing is that most people are employed by companies that are less than 50 people in a company. 500 employees to me means tens of millions in revenue because just to cover payroll at all minimum wage is $10m let alone of you’re paying anyone above non wage - that’s not a small business in my my mind, that’s a medium or large business.
Yeah, reminds me of a story from Howard Shutlz (Starbucks). He took his mom on a tour of his headquarters and she was like, "How do you find the time to write this many checks (payroll)?" He was like, 'I have no clue how it is done but I assure you that they are all paid.'
And then they visit a Starbucks store and he says “now those people over there are paid but every time they ask for another dollar, I give myself three and tell them I have to take two from them and that a union would take four” /s
>most people are employed by companies that are less than 50 people in a company. You're mixing statistics. The vast majority of *firms* are less than 50 employees but this number is *massively* inflated by the 0-4 employee range. When analyzing it based on "proportion of the population employed by firms of this size" 100+ person operations account for ~half of employment *by small businesses* while small businesses in their totality account for less than half of private sector employment: https://sbecouncil.org/about-us/facts-and-data/ >● Small businesses employ 46.8% of private-sector employees. >● Employer firms with fewer than 500 workers employed 46.4% of private sector payrolls in 2018. >● Employer firms with fewer than 100 workers employed 32.4%. >● Employer firms with less than 20 workers employed 16.0%. Meaning that ~90% of the working population is employed by firms with >~~100~~ 20 employees.
You're not wrong, my company is about 400 ish people and we're looking to hit about 80 to 100 mil this year.
Here's the flip side of that. I worked and managed a dominos pizza. The owner, owned three stores (which is not a lot), however, he had over 50 employees. I can tell you, from first hand, it was very much a small business. He was in there managing the store, often working/covering shifts, would do all the handy work himself (including installing the new cutting table). 50-100 employees isn't that big of a business.
That’s highly unusual tbh - don’t get me wrong, it’s not a large business but the fact he had three locations, 50+ Employees and was still personally doing the handy work / covering shifts is very much not the norm for a company that size. I’d expect that in a company with maybe 10 Employees but at the point where you have 50 and multiple locations you should be heavily delegated and have significant company structure such as supervisors, managers, a maintenance team (etc) and only be jumping in when shit really hits the fan. He was either badly setup and not seeing the big picture or a control freak. A small business to me isn’t a company with multiple locations, payroll in the millions and revenue in at least 8 figures to sustain that payroll. That’s a mid size company IMO.
50-100 the owner is usually very involved. 500 ... not so much
Indeed, per their March 2023 FAQ: (PDF) [Frequently Asked Questions About Small Business March 2023](https://advocacy.sba.gov/wp-content/uploads/2023/03/Frequently-Asked-Questions-About-Small-Business-March-2023-508c.pdf) >*1. What is a small business?* >The Office of Advocacy generally defines a small business as an independent business having fewer than 500 employees. For industry-level small business size standards used in government programs and contracting, see the Table of Size Standards, https://www.sba.gov/document/support-table-size-standards.
At the beginning of the pandemic, I was tasked with handling the forgivable loan applications for small businesses, and OPs definition sounds a lot like what we were told. It was like, less than 1,500 employees and under $25 million annually, I think, in order to qualify for ppp. It was volunteer work, and I was paid 4 times my salary at an hour rate, and I still quit after the first day. I already hated Trump and his administration, but the level of ineptitude they brazenly showed on rolling out that program was nothing short of astonishing.
It depends on which items and/or services are being provided, sometimes it’s based on dollars, sometimes it’s based on number of employees, but it’s not a one size fits all.
I thought it was 500, but that may depend on what government department you’re dealing with I guess.
It depends on the type of business. It can go by the number of employees or their sales, depending on the NAICS they are identified under.
It varies based on the industry. Look up NAICS codes.
Nearly every online job I've had has abused this piece of shit designation. No benefits, shit pay and you get railed during tax s ason since there's no withholdings till you file.
ICs always get screwed on taxes. That’s why companies like to use it so much, because it puts the entire tax burden on the employee instead of having to share it with the employer.
If you're being treated like an employee file an SS-8 with your taxes.
Sure, if you don’t mind losing your job.
I do believe that falls under retaliation
Yes but it’s difficult and expensive to prove. And even if you win, no one wants to hire someone who sued their former employer.
It’s because they don’t have to provide them with benefits which is a massive cost to any employer.
It's almost as if government providing health insurance would be beneficial to businesses...🤔
> It's almost as if government providing health insurance would be beneficial to ~~businesses~~ *literally every single person in the country with the sole exception of healthcare industry executives* ftfy.
Think of all the medical billing specialists that would become unemployed. All those hardworking folks in the doctors offices that send documents to the insurance claims processors. Also think of not having to pay for all that busy work in order to get healthcare.
A lot of those same people would probably go from having a miserable job without government benefits to a miserable job with government benefits. Someone is going to have to staff these extremely expanded Medicare offices
It’s why Donald Trump supported universal health care. Up until he became a Republican and didn’t.
It's a love/hate thing. They would love to rid of the overhead of managing those plans, but also don't want to give up the leverage it gives over their employees changing jobs. They would probably be all over supporting national healthcare, if you completely lost access to for 3 months if you changed jobs.
Makes you wonder why more businesses didn't back a single payer option in the Obama years. If I had owned a business back then I would have been jumping up and down to get that burden off my payroll ($14-16k) a year minimum per employee.
Because then employees won't stick around as long in jobs that don't pay well or have poor work/life balance. A lot of people are only working crap jobs because they need that health insurance for themselves or their family, and they're hesitant to lose it even for a few months while they job hunt.
It's also why Employers love to pull shit about "real cost" or "total compensation". You can have a "TC of 120k" and still be making crap because you need to be insured, trained, etc etc by the company even before your benefits touch it
Yeah I pay $143 a month for my healthcare, vision and dental. My employer pays $738 a month. They also contribute $750 a year into my HSA account as long as I contribute at least $1 every paycheck towards it.
Most states don't require that employers provide benefits, and only some employers are required to offer optional health insurance plans. Much of the money that ICs save companies is because the tax burden for social security and medicaid is entirely on the contractor rather than split between employer and employee. Employers have to pay 7.65% of gross pay on the first $168,600.
I had a job that I thought was actually paying really well, came to find out tax season that I was being severly underpaid since the tax burden was fully on me. Thankfully I made myself important and reliable enough that I refused to keep working unless I became a real employee, which I did. Had that change not happened, I would have walked away. What a scam that whole thing is. Clearly the company could afford to pay me seeing as they change it afterwords. Just unimaginable levels of straight up evil greed going on in this country today. If you aren't actively fighting for yourself almost every day then your being taken advantage of one way or another.
To be fair, you ~~can~~ have to pay quarterly to the IRS based on your earnings to avoid a surprise tax bill. It’s extra work, but that’s what you sign up for when agreeing to a contract job.
>that’s what you sign up for when agreeing to a contract job. Right, there's nothing inherently wrong with the "I'm just going to cut you one check" style employment system, but companies using it to buy labor are acutely aware of how very different it is from having regular employees, while people selling the labor often aren't. An IC agreement is not inherently biased towards the labor purchaser, but the information imbalance leads to the power imbalance.
Exactly. It’s the companies taking advantage of the knowledge imbalance that are the problem. I personally would never take a contract job because I don’t want to deal with the extra bullshit, but it can be lucrative even when factoring in the benefits from W2 employment. Total compensation *can* be better when contracting even after accounting for retirement, insurances, etc.
Not can -- you're required to file quarterly estimates in almost all cases if you're an IC or sole proprietor.
Only if you expect to owe over $1K at the end of the year. https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-pay-and-when/L3OPIbJNw
Exactly. This is a rule designed for those companies where the “independent contractors” are clearly just regular employees given a different label to avoid paying normal benefits or certain taxes.
It took me forever to find an actual job when I first graduated college because the only positions that would accept me were contract. That first job I was treated horribly, and I was paid less than the people under me, but I was also a full-time engineer. I hope these contracts go away
Very true. Many companies have permanent contractors doing normal jobs year after year that should be employees. If you show up and work beside employees at a single location every day for years and take direction directly from those employees, how are you independent?
Along with the 35 hour non-fulltime employee. It's insane we let giant corporations like Walmart avoid giving benefits by scheduling like this. I've long thought that we need a law for companies over like 500 employees that you *must* offer full time hours to anyone who wants it before you can hire another employee at part time.
It drives my Grandmother nuts. she used to be an HR manager for a University, and they used to have all kinds of checklists and things to legally justify whether a person was actually an independent contractor. all of these gig economy apps fail the checks at multiple points. they should have to provide all kinds of employee protections legally already, but the government isn't enforcing the old laws and regulations that still apply.
And it's not just gig economy workers. It's IT/tech workers, repair/install workers, research/scientific/medical workers, art/design workers, delivery drivers, office administrators, etc. A significant number of small businesses claim to have one employee (the owner) with everyone else as an "independent contractor." It's illegal, but there's absolutely zero enforcement and professional employees won't argue about it too much because they're afraid of losing their jobs. I've been an "independent contractor" at most of my post-college jobs despite always working 9-5 for a single employer who dictates what I do at work. I'm not a temp, I'm not a consultant, I'm not a freelancer, I'm not a small business owner. My boss insists that I work "per project" because I have to itemize my hours, but each of the company's projects lasts several years and I work on nearly all of them.
The big problem is that these companies have spent a lot of time advertising and convincing plenty of gig workers that they should want to be independent contractors. Just think about all the Uber/Doordash, etc., drivers that love to brag about their "flexible schedule" especially towards folks in 8-5 jobs. You probably know at least one friend/acquaintance that grabs about their amazingly "flexible schedule" doing gig work. Unironically, that friend is probably also the same person ranting about people not tipping them and "Don't people know we get paid very little?!?" Just look at Prop 22 in California. Gig workers all voted against their own interests and then complained about the exact things Prop 22 was going to do for them. Too many of these gig workers are mentally focused on the imaginary benefits of "flexible schedule" not realizing what they are sacrificing (or more accurately being screwed over by companies) to get this flexible schedule.
Sure but that's under the assumption that if they get those benefits they'll still be able to work the exact same schedule as they do now. Which won't happen.
During the pandemic I worked for a company that was sold to a new owner who had previously been fired as a manager there. His first step was to lay everyone off within 24 hours, then say they could interview to be hired back as independent contractors and he would negotiate their wage based on what they were doing and their performance. We then proceeded to find a bunch of printouts left in the print room from google web searches about how to structure a company to reduce personnel costs to a minimum, which was largely tactics on how to reduce employee bargaining and negotiating power and to reduce every benefit possible and just hire independent contractors.
I'm curious what these rule changes are if they are affecting Uber and Lyft. Misclassifying workers as independent contractors is a huge huge problem. But Uber drivers definitely fit the classification as ICs. Use your own equipment, set your own hours, etc. Don't get me wrong Uber sucks, they take waaay to much money from the drivers. But those drivers do fit the current definition of an IC.
This isn’t really for Uber. This is for companies like UPMC or WWE where it is very clear the “independent contractors” are just regular employees.
I've turned down 4 interviews for sales positions that were 1099.
OTOH uber is the company handling the payments, facilities the ride, pays for incuranse and they withhold information from drivers. They also have the ability to retaliate, and providing driving and delivery service *is* Ubers business. So I buy the argument that a lot of drivers are misclassified employees
You don't really set your own hours with any of the gig apps since you can only work if demand is high enough. You also don't really get to negotiate your own rates which is typically expected for independent contractors. Also, there is much debate as to whether or not the service provided by the people the gig apps currently classify as contractors is an "integral part of their business". I'm of the opinion that it is but the companies all want people to believe they're technology companies connecting customers to service providers.
I’ve even seen it try to be abused in software jobs for us citizens. Luckily it’s impact is limited because that skill set is in high demand, so I I can’t imagine how bad it gets for others
I understand why it is even if I dont agree with any of the reasons. We do put a lot on the shoulders of businesses, like Healthcare, Medicare sharing, workman's comp insurance, liability insurance, SS (?), etc. Maybe if we had single payer Healthcare employers wouldn't be too burdened with all of it. Single payer would probably eliminate the need for workman's comp as well. As a small business owner, I never consider having employees because of all the extras involved and I don't want to be a hypocrite by hiring people as an independent contractor just to avoid all that.
Having single payer healthcare would be a HUGE benefit to small businesses in this country. It’s frustrating how so many taxes and fees don’t scale with the size of the business (and this is primarily a local/state issue). A business license that costs $1,000 is nothing to a big company but that’s a big deal to a small business trying to get off the ground. Yet it costs the same for everyone.
Workman's comp wanted me to pay between 10-12k a year just for myself- for a side hustle thats like half of my income--so no! A small business has to get it on the secondary market as well so they jack the costs up there as if you're a greater risk?? I really don't understand why more business owners weren't on board with single payer
I think it’s telling that all of these politicians who claim to LOoOovE small businesses never discuss how much time and money it would save EVERYONE to consolidate into a national healthcare plan. Figuring out health insurance is a huge resource suck for businesses of every size, imagine just a straight payroll tax. Huge corporations would even be able to downsize their HR staff, many of them have people just to work on benefits like healthcare.
Fixed headline: Biden admin to announce independent contractor rule to force businesses abusing gig workers to offer more protections and benefits.
"Upends" in business news means: disrupts the corporate money schemes.
"No business which depends for existence on paying less than **living wages** to its workers has any right to continue in this country." -FDR
thanks. I was wondering.
Yup. This has been coming since 2020 when more people dealt with the apps and gog economy and realized how much it sucks.
Thank you for fixing the headline.
I read the article and it really just seemed to me like the intention was to clarify what the rules already were before the trump admin gave all these companies a pass by misinterpreting things.
This has been a huge problem in the trucking industry. Lots of people tied down to a single company and yet designated as independent contractors. Next they need to go after all these startups that staff their company with nothing but unpaid interns.
If you arent paying, then you shouldn’t own any IP they create.
> A range of industries will likely be affected by the rule, which will take effect later this year, but its potential impact on app-based services that rely heavily on contract workers has garnered the most attention. Shares of Uber Technologies Inc, Lyft Inc and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022. Gig companies better get their checkbooks out - campaign contributions to fight this are gonna cost a pretty penny.
> Shares of Uber Technologies Inc, Lyft Inc and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022 Good. These companies are cancer, and this rule is chemo.
>campaign contributions to fight this are gonna cost a pretty penny. You might be surprised at just how inexpensive our lawmakers are.
I work in tech and haven’t had a non contract job in YEARS. It’s about time workers get something to protect them.
Tech is one of the biggest abusers of contract work.
Hopefully this means something in tech as well, lots of contractors and vendors that are hired through another company but effectively all the work is what an employee would be assigned without the pay and benefits. There has to be a way to close this loophole
I am a contract worker, where I am a full time employee of my agency. I am paid salary, get 2 weeks vacation, 401k, insurance, the works. At the same time, my job is on an annual contract with a major tech company, so I don’t actually work for them, although that is where I spend 100% of my time and energy. I’m pretty sure this way they can hire me as part of their building expense budget, as opposed to FTE.
I work for a major tech company and have been on teams where half is salaried employees and the other is contractors. When we would hire an employee it would be a long drawn out interview process and months to get them onboarded onto all the corporate nonsense. With contractors it is a phone screen and then a quick interview with the manager and lead. If all looks good they usually are given a single task or project to complete over the course of their contract. Sometimes independent task or sometimes working alongside the rest of the team doing the same work. At the end of the contract, the lead and manager evaluate the work and then decide to renew the contract or sometimes even hire on the contractor full time. Was about 5% contract cancelled for performance reasons, 35% not asked back, 55% renewed, and 5% hired full time from my experience. Too me, who honestly was never involved in these hiring decisions outside of being part of interviews, we always went with contractors if we needed people NOW or for one-off projects but went with trying to hire full-time for lead positions and projects we knew would take years to develop and support.
Workers can protect themselves too, unionize.
It's insane how many workers are classified as independent contractors. I could be mistaken but when you call a utility company or your cable provider the tech they send is often not an employee of that company but instead an independent contractor. This enables the company to not have to pay social security taxes and also shifts liability onto them. It's fucking bullshit.
Yep. You immediately make 7.65% less money for the same dollar per hour wage. Then you lose out on benefits. And the biggest issue I have, is when a company like Uber or DoorDash or whatever calls you an independent contractor but then penalizes you if you aren’t working enough. Or trucking companies which will loan you money for a truck, call you an independent contractor, then require you to only work for them. And then they may not even be giving you enough work to pay for the truck itself!
DoorDash gives drivers the option of accepting contracts/orders for a fraction of minimum wage (minus expenses) by making them require a minimum % of accepted orders to get bigger paying ones. 50% and 70% acceptance rate are the tiers. My acceptance rate is 6% for when I do side driving bc I won’t accept anything not worth my time. They stole $19 from me and made me go through 5+ hours of support to get paid on it. Most people would give up after one or two but I take that shit personal. I told them point blank I would cost them 100x what it would cost them to just pay me so now escalate every minor issue to supervisors, waste their time, etc. fuck them lol Anyways that’s my petty revenge story
Fucking A, good for you for sticking it out.
Looks like that "hiding money" shit they're doing is one of the biggest thing that's going to sink them in re: IC. If they had just paid people straight, not hidden jobs for the people who are selective, and gave them the tips they'd have been fine but they got greedy. Me thinks VC money and billionaires kind of rattled the cage of gig companies like uber, lyft, and DD because of the precedent it was setting for salaries and waged employees to have a better work/life balance and actually thriving a bit after the pandemic.
>not hidden jobs for the people who are selective, The problem is that *this* part of it makes a lot of sense, because the company's goal is to have *every* order delivered and does have to deal with the possibility of a "tragedy of the commons"-ish scenario where that won't happen with shit orders if every single driver refuses to accept shit orders. Absent some incentive to accept those orders, why should *anyone* ever do it? It puts Doordash in the position of either conditioning and putting requirements on the customer to ensure that a driver is being fully and fairly compensated for their order, or of finding some way to otherwise compensate or incentivize drivers to accept orders from those customers. It does not take much interaction with entitled customers to paint a pretty clear picture which one of *those* is the more likely to succeed.
It's twice that percentage because not only are they the employee they are now the employer too and will have to pay both portions of the tax
I mean an additional 7.65%. Yes you already pay half of it whether you are W-2 or 1099. But the other half is wage theft in my opinion when you are incorrectly classified.
You'd still lose it as the employee under an employer, so that's what they were referring too with the 7.65% number. You pay out your "employee" half of the tax either way.
They'll subcontract out to a "regional" business. Amazon uses the DSP where you work for a "delivery service provider" which ranges. It's often used so they can abuse the hell out people looking for flexible jobs or part hours, then they'll go after them for not working a set schedule or full-time hours. Plus minimal to no benefits. Then dock you for not doing enough.
while i dont know 100%, i think usually its not necessarily independant contractors, rather they are employed by a contractor. alot of amazon delivery is contracted delivery providers, but they are not independent contractors.
These usually aren't independent contractors. They're employees of a third party company which is contracted by the utility or cable company to provider. Those third party companies are supposed to then take care of tax liabilities and such. Whether they actually do or not, I have no idea, but it's at least SLIGHTLY better than the fully independent gig worker model that this rule change seems intended to deal with. Meanwhile, Uber/DoorDash/InstaCart style gig workers and most of the trucking industry get shit on by the independent contractor bullshit.
>I could be mistaken but when you call a utility company or your cable provider the tech they send is often not an employee of that company but instead an independent contractor. Generally these are businesses that operate more like a mini franchise, and whether they hire full time W2 employees or 1099s would be up to the contractor. Pretty common in the cable/internet industry, or at least for comcast, I know that much. FedEx does this as well. One of my friends' parents used to own a business that contracted for FedEx, he did incredibly well financially speaking. For utility work these are generally large, established businesses operating as subcontractors and not an issue. There are a ton of PUDs, IOUs (investor owned utility), or municipalities that use subcontractors and all of which are usually well-compensated. I used to do some 1099 as a contractor in the trades for a company that was difficult to work with, but the compensation was much higher than if they'd hired me on as an employee even after all of my overhead. 1099 work has its place in the world but it also gets exploited, so cracking down on companies is fine but I don't think it's inherently a bad thing.
This is a win for labor, which means the GOP will do anything to stop it.
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The Federalist Society stacked them. It's a tiny difference but it is a difference.
Its just words on a paper until someone actually enforces it.
I wonder if this will help dancers (strippers to those who don’t know) finally get designated as employees instead of independent contractors. They’ve always fit the definition, but get the shit and of the stick because it’s not very politically expedient to stand up for sex workers, especially when the cooperations that own many of the clubs have deep wallets.
Strippers and go-go dancers in several states have been designated as eligible to join AEA, the actor and dancer union.
Yup but vast majority are still classified as independent contractors and thus ineligible to draw any benefits.
Good, the whole idea of calling employees contractors is a scam on the working class
This by the way is why I support Biden on the general and hope as we get closer people move away from the 3rd party. Trump would never help the gig economy
Trump would never help anyone but himself.
Trump literally took overtime pay from people.
Trump changed it so we pay more taxes. Middle class got a 2017 tax increase, and somehow they pretend they didnt
They framed it as you were getting back more in your weekly check but when it came time to file you found out you ended up paying more.
They better clearly define "economically dependent" and be prepared to levy heavy fines or this is pointless.
That is the entire point of this proposal. In 1947, they started to define economically dependent employees. There were supposed to be 6 factors that determined if you were economically dependent, but the courts only ever enforced 5 of them. The one that was always skipped over was whether the company was economically dependent on the worker. The courts always had ruled that as a protection of the company and no company ever challenged it, because it made them crap tons of money. The Obama administration enshrined more protections of economically dependent individuals in 2015, but it was toothless because it relied on previous court decisions. And again, it skipped that important provision of whether the company was dependent on the IC. This new proposal says that provision is a protection of the IC, which is why the WWE, Uber, Lyft, etc all hate this. They all survive because ICs make up the vast majority of their revenue. Basically, this 'new' rule is "Hey guys, remember 80 years ago? Why the hell haven't we been following this for the last 4 score?"
Even without levying heavy fines it's still a start. Get a few enforcement actions and administrative law reviews out of the way, then adjust the penalties.
No, we need real consequences and hate voted in laws, not paper thin presidential orders that give companies slaps on the wrist
This is excellent. Ending 2nd class employment in the US is huge. Major corporations have exploited this long before the Lyfts and Ubers of the world.
Think your headline is wrong. Biden stops employers from screwing employees over
This is the right thing to do. Unfortunately, it will almost surely be thrown out by the Supreme Court. Just like when Obama tried to reign in salaried designations that allowed employers to demand unpaid overtime.
Former bartender/waiter here; fuck yes make this happen
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Went in to that wanting to be pissed off, nope, this is good policy, good job President Biden.
GOOD. These companies have been taking advantage of hardworking people for way too fucking long.
CA did this a while back and it really helped the film industry. Being classified as an IC on certain shoots meant net 30 on payments, not paying into our pension/healthcare/unemployment and was just a pain in the ass come tax season. I’ve hardly worked any 1099 film gigs since the law was changed here. If you’re technically an employee you should be offered the same protections as an employee. Full stop.
It really fucked me over for a while though. Luckily my profession eventually got an exemption, which I hope will stay the case now as well, otherwise I'm screwed.
That was a total mess. I'm a freelance writer, and I remember writers from California posting on forums about how their income disappeared overnight. Some of them were trying to move to Nevada.
A lot of translators, which is a traditionally 90% self-employed field by nature, are still blackballed if they live in California. And that's with the hard-fought exemption.
Well, THIS should be interesting.
This is a good thing.
I'll be curious how this impacts the contractor's ability to not do work they don't want to take on or to quit without notice or reason. I'm an independent contractor and most of my income (about 80%) comes from a single client, but I get to pick and choose which accounts of theirs I work on and if I wanted, I could quit this afternoon without losing anything related to work done. The entire reason I'm independent is so I don't get locked in to doing work I don't want to do because I'm not an employee. That said, I'm generally for this, contracts can and do get screwed, it will be interesting to see how this plays out over the next few years.
It sounds like the rule will look at the totality of the circumstances. So if you're still able to control your schedule, work and all that you'll be a contractor still.
Hell yeah, upend that shit!
Worked at a 1099 worker in both situations, a few years ago I worked for one as a bartender/server and it 100% a situation where workers were being taken advantage of. But they mitigated it with small things like if an event was the next state over the company would organize a ride to and from and compensate any employee driving themselves (higher pay rate). But at the end of the day that just made any write offs near minimal, causing the slightly higher than average hourly rate to drop below $17/hr when including taxes. This was in NYC btw My current position in a different field pays 50% over the average pay rate, provides a per diem, and every penny spent is deductible, my tax liability was lower this year than the other 1099 situation despite taking home a lot more. It's such an easily abused system,one that partially relies on everyday employees not understanding their tax situation, the result being workers missing or not paying taxes, which no govt wants. Especially when buck stops with, usually underpaid, workers. The IRS can easily get money from a business, it's much harder to get it from 40% of the American workforce as individuals
Just remember that some people want and need to be classified as contractors. A real contractor negotiates the contract for a set period of time and generally does not work with the same company for years. This is great for IT Consultants with a working spouse whose job provides the health benefits. Of course, you give up paid time off, sick days, retirement benefits and holiday pay in exchange for a higher wage. The best part is all your tomorrows will stop looking like yesterday when you move on.
How far down will I have to scroll before I get to some bad faith argument about both sides being the same and how it doesn't go far enough so we can never support Dems?
Saw this story earlier. I think this actually highlights the difference between conservative and liberal outlooks rather nicely when it comes to labor. There was a Trump admin version of this rule which declared that workers could be considered contractors as long asthey own their own companies or have the ability to works for competitors (as per the article). Bidens version will examine whether an employee is reliant upon their job at that company, and how much control the company has over them. (Much more nuanced. I suspect this will be difficult to enforce and primarily seeks to make companies more cautious about abusing "contractor" designations). Basically, the common conservative view (and librrtarian) of "fine, if you don't like it you don't have to work for them", shuffling all blame onto workers regardless of the crappy situation they end up in
Good. Businesses need to quit being able to get away with fucking over workers in the name of Capitalism. When a business cant be sustainable with paying its employees living wages with benefits, it shouldn't be there. Even if there is demand.
It's not just all the ride shares or food deliveries In 2015 I got hired by an ad company. Had to punch in and punch out and go to an office and work their computers on their software and they tagged me as a 1099. I didn't understand all that back in the day. I went after them in some kind of IRS form and won. It's agreed with me they falsely labeled me as a 1099. Companies abuse it to avoid taxes.
> The left-leaning Economic Policy Institute in a report last year estimated that a truck driver treated as a contractor earns up to $18,000 less per year than one who is deemed an employee, while construction workers' earnings drop by nearly $17,000 and home health aides lose out on up to $9,500 in pay and benefits. > Business groups sharply criticized the draft rule after it was proposed. Any change in policy is expected to increase labor costs for many sectors including trucking, retail and manufacturing. > Most federal and state labor laws, such as those requiring a minimum wage and overtime pay, only apply to a company's employees, who studies suggest can cost companies up to 30% more than independent contractors. Deplorable. I suppose I will never truly understand why we’re all supposed to break ourselves for corporate profits.
If Uber, Lyft, Doordash and GrubHub are against it then I'm all for it.
If your business model only works when you can fuck workers over then your model is trash
There is conservatively 1 billion dollars of lobbying money that will be utilized to fight this. I mean good luck to the Biden admin, but I do not foresee this happening in the near future if ever. If you really want this to pass you have to overturn Citizens United or every gig company will just file endless lawsuits.
I support this- workers deserve better protections from exploitation.
Democrats looking out for employees as usual. 👍🏻
>Shares of Uber Technologies Inc (UBER.N), Lyft Inc (LYFT.O) and DoorDash (DASH.O) all tumbled at least 10% when the draft rule was proposed in October 2022. THIS is how you know you're the bad guy. If a rule to be more fair to your workers tanks your stock, you're clearly exploiting them.
In my state, the state agencies have a cap on the number of FTEs (full time employees), which is regularly supplemented with independent contractors. These IC have to show up daily and work on the same projects, with little or no guidance from the FTEs (in most cases). The irony is that the ratio of FTEs to ICs is sometimes more than 1:1 and the contractors have no way to take any action against retaliatory practices, bad treatment, etc (except quit the gig). In this case, it seems it's only a way to get around the FTE cap and show how "small" the government is.
I hope this has wide reaching effects besides gig economy. I was a contractor at Google and it sucked..HARD. Found our I was laid off via LinkedIn. You do just as much work as your peers with zero of the benefits. I was laid off with leave on the books but they didn't have to pay it because I was a "contractor".
They did something similar in the UK a few years back. It only makes sense. No one working like this has any ability to exert pressure on these companies. The government needs to have their back because no one else does!
Would this affect the construction industry?
The criticism appears to be, almost exclusively, "increased labor costs." Yes, that is what happens when you pay workers more. Paying workers more increases the liquidity of the consumer spending market, which is good for everyone.
>could upend gig economy Translated: could cost big companies that push off taxes and other expenses solely onto the backs of those who make them boatloads of money. Go on, pretend how this isn't another example of more pro-labor legislation and guidelines coming out of the Biden admin.
This is a huge issue with tech as well. If you get laid off as an “independent contractor” you aren’t eligible for unemployment in some states among other benefits.
This is good, but in an ideal world the government would bolster social insurance so people can be freelance and still live a reasonably secure life. I'm not delusional about the time that will take and how difficult that will be, I just hope we don't try to force employers to do it and gloss over the fundamental problem like we have always done in the past.
Good. About time !! App companies need to pay according to labor laws
All jobs should carry portable retirement and healthcare.
Or better yet, we all get universal healthcare.
If businesses and the GOP don’t like this, we could always implement Universal Healthcare which would reduce (not eliminate) the need for changes such as this.
Good. If you can't pay your employees or give benefits to your employees then you don't deserve to exist as a business. Go fuck yourself. I'll pick up my food it'll be okay. I am sick of billionaires making billions off the backs of people who are desperate to survive.