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California Supreme Court Transforms the Test for Who Is an Employee

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Re: California Supreme Court Transforms the Test for Who Is an Employee

#111

Post by rtpg »

thaumasiotes wrote: post #109
rtpg wrote: post #47

Earlier quoted context omitted.

If you are an IT company and all your work is done through contract developers, perhaps you _are_ going against the spirit of the law. Labor law is meant to protect those in the employer employee relationship, and most contractual work explicitly weaken this relationship a lot. So contractual work really shouldn't be the norm in a business. If you can't provide your main business without this set of people, then thos…

> If you can't provide your main business without this set of people, then those people are probably your employees? This doesn't make any sense. Farmers are not employees of grocery stores. Factory foremen are not employees of drop shippers. Amazon warehouse staff are also not employees of drop shippers. Comcast cable layers are not employees of YouTube. You think farmers aren't employees of grocery stores because t…

This is a pretty big simplification. Grocers buy produce from the farmers, not their time.

This matches some conrractors, of course. But it also extremely doesn't match many contractor developers.

Are you required to be online 4-6 hours a day? Do some of the companies employees not even know if you are actually a contractor? Are you the one picking up the metaphorical phone when the company's client is calling with a support issue? You might actually be an employee

If you show up with a deliverable , can go on vacation without clearing it with anyone, and are actually your own boss... Well that's different of course

Re: California Supreme Court Transforms the Test for Who Is an Employee

#112

Post by ddingus »

ajross wrote: post #52
ddingus wrote: post #31

Earlier quoted context omitted.

Honestly, yours is a GREAT read. That's a very solid case for contractors and almost nobody will have a meaningful problem with it. I've done similar things in the CAD / data management space. A person with outside perspective, rare skills, experience, and most importantly, is the outside voice able to bring real options to the table along with production proven, time tested ways and means, is worth every penny. The…

> A person with outside perspective, rare skills, experience, and most importantly, is the outside voice able to bring real options to the table along with production proven, time tested ways and means, is worth every penny. Such a contractor would likely meet the new "ABC" standard in the linked article, though. Those aren't the positions that are in danger of being eliminated, it's the "grunt contractor" folks who…

Indeed. I simply wanted to highlight an effective and practical contractor.

Not so sure I disagree with CA overall.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#114

Post by georgemcbay »

jahewson wrote: post #78
bdcravens wrote: post #70

Earlier quoted context omitted.

So a 1099 developer who is required to participate in daily standups will likely qualify as an employee I presume?

I see no reason to think that.

Microsoft has gotten slammed in the past for this sort of thing by the IRS:

https://corporate.findlaw.com/human-resources/employee-or-in...

The IRS' concerns aren't exactly the same as the state law concerns, but the lists they use to qualify contractor versus employee seem pretty similar, just with the CA state law test being more simplified (though IANAL, the more simplified CA state law list seems no less likely for companies to run afoul of with this sort of relationship).

Re: California Supreme Court Transforms the Test for Who Is an Employee

#115

Post by rexgallorum2 »

siruncledrew wrote: post #63
hardwaresofton wrote: post #34

Here is the new test (the ABC test if you're into unnecessary pet names for things): > If A, B, or C isn’t present, the worker is considered an employee. > A. Freedom from control over how to perform the service > B. Service is outside the business' normal variety or workplace > C. Worker is engaged in independently established role So if any one of those conditions isn't the case, you are an employee under the law.…

Could someone please provide examples for A and C? I understand B, but I don't fully understand A and C. For A, does that only mean working hours (i.e. can't make someone work 11am-7pm EST)? Does that affect scheduling milestones or tasks to be completed? For C, what does 'independently established role' mean? Like job title? Thanks in advance.

A: You hire an external contractor to do work (roofing, pouring concrete, creating a website, etc.), the contractor should have full autonomy (and liability) regarding how, when, and by whom the work is done--the contractor is responsible for the end result. A good (bad) example might be a language school--just the type of business that often operates in this grey area. A language school might 'hire' a teacher, technically an independent contractor, to do teaching work, yet nonetheless treat the teacher as an employee, specifying exact teaching times, methods, books, locations, etc., closely monitoring performance (as with an employee), and even integrating the person into an internal hierarchy (so the boss becomes a boss rather than a client). True autonomy (freedom from control) in this case would be the freedom to decide upon the times, locations, methods, materials, etc. and a dependence upon own's own independent expertise while performing the contracted duty.

C: The contractor (ideally) works for many companies (i.e. has many clients) and not just for you. Is the contractor (individual or company) independently established? When determining C, the authorities might look specifically at things like whether the contractor has an established business location, whether the contractor has employees, how much work the contractor does for any individual client, etc.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#116

Post by hardwaresofton »

icebraining wrote: post #106
hardwaresofton wrote: post #101

Earlier quoted context omitted.

I didn't say no law, I was remarking in the very specific context of this one. What I was trying to say is that this legislation is unlikely to affect the most successful gig economy companies very much, if at all, because they'll likely find the best way to circumvent it. Even if they don't there's already very large corporations doing their best not to pay employees higher wages by taking advantage of the differenc…

I got that you were talking about this law, but what I was missing was what you thought made this particular law different than others which would affect them. Now I think it's clearer. That said, I'm not sure I agree that part-time wouldn't be that bad. It works for Walmart because their employees have low fixed costs for working (essentially just the commuting), so working fewer hours is still worthwhile. But Uber…

Hmnn, I think the fixed costs are only higher if you assume that most Uber drivers buy new cars to Uber -- is that true? If they don't then the fixed costs for an Uber/Lyft driver would be even lower than Walmart right?

I definitely agree with the rest of your comment -- but I think the affects of (1) and (2) might actually be net positives for Uber:

(1) More fleet for their self-driving efforts seem like not a bad thing, also I don't really want to do the numbers but the 10k spent in a year on the cars as capital instead of employee benefits might look at lot better on a balance sheet (especially tax wise).

(2) I think this is only true if the supply stays the same as now -- when people hear "oh uber pays more now", I think the supply might increase a little. The increased cost per worker will be spread over all the competition, and as long as the per-worker cost isn't too high for part-time vs contractor.

As an aside to all this, uber has also started (long ago?) charging people what it thinks they can afford so that's also a factor, it's not even a single consistent percentage anymore (if it ever was).

Re: California Supreme Court Transforms the Test for Who Is an Employee

#117

Post by afpx »

taurath wrote: post #2

It’s interesting how even within companies a hard set social hierarchy has taken place between employees and contractors. The contractors tend to perform the exact same duties as employees, but are usually paid less, have worse future prospects (companies tend to like to hire from full time to full time), worse benefits and generally don’t get most of the perks of being an employee. For coders, is this because they’r…

  Given all the emphasis in hiring on avoiding “bad” hires at all costs ...
I suspect that a small portion of companies use grueling interviews as more of a hazing ritual, and many of the rest follow because, well, that’s just what everyone else seems to do.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#118

Post by icebraining »

hardwaresofton wrote: post #116
icebraining wrote: post #106

Earlier quoted context omitted.

I got that you were talking about this law, but what I was missing was what you thought made this particular law different than others which would affect them. Now I think it's clearer. That said, I'm not sure I agree that part-time wouldn't be that bad. It works for Walmart because their employees have low fixed costs for working (essentially just the commuting), so working fewer hours is still worthwhile. But Uber…

Hmnn, I think the fixed costs are only higher if you assume that most Uber drivers buy new cars to Uber -- is that true? If they don't then the fixed costs for an Uber/Lyft driver would be even lower than Walmart right? I definitely agree with the rest of your comment -- but I think the affects of (1) and (2) might actually be net positives for Uber: (1) More fleet for their self-driving efforts seem like not a bad t…

I think most buy/lease new cars, but it might be outdated; I think Uber used to have more restricted rules on the age of cars, but it seems nowadays they can be 10-15 years old.

(1) "10k spent in a year on the cars as capital instead of employee benefits" - Right, but nowadays they are spending on neither :)

(2) Right, but that means Uber can't take over the market. That's a pretty big blow.

Re: California Supreme Court Transforms the Test for Who Is an Employee

#119

Post by eecc »

kahnpro wrote: post #93
CamperBob2 wrote: post #46

Earlier quoted context omitted.

So if any one of those conditions isn't the case, you are an employee under the law. I see people in this thread wondering how it'll affect companies like Uber/Lyft/whatever 'B' is downright apocalyptic for contract developers in all sorts of roles. Sounds like massive judicial overreach to me. If your summary is accurate, I wouldn't expect that particular guideline to survive appeal.

Honestly, most contracting developers are actually employees, and this position is just used as a way to skirt tax and labor laws. The abuse here isn't from the court, it's from devs and businesses. Devs don't care simply because the pay is high enough and there are a ton of jobs available.

Somewhat true, but to me what matters as a freelance is that I get to make the call when I’ve had enough of a particular contract, or choose whether to wait for a more interesting project, or just sign up to whatever conference I feel it’s important to my own career plan.

When I was an employee I always had to beg to do anything, as well as suck up whatever shite projects the accounts would figure out would mean a sweet billability streak... dammit, the humiliation...

Re: California Supreme Court Transforms the Test for Who Is an Employee

#120

Post by CydeWeys »

kbenson wrote: post #28
CydeWeys wrote: post #24

Earlier quoted context omitted.

The vast majority of "contractors" in the US are paid than their full-time equivalents.

> The vast majority of "contractors" in the US are paid than their full-time equivalents. You're missing the most important word there. I'm honestly not sure which one is intended.

Meant to say "less" :/
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