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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

#131

Post by fortythirteen »

taurath wrote: post #29
volkfish55 wrote: post #18

Earlier quoted context omitted.

Contractor are paid more, since they have to factor in the health insurance, taxes, unpaid vacation, perks, their own laptops, no need for office space, no 401k match. There is no reason they would ever get paid less. Maybe those with H1B visas who can get taken advantage of or outsourced contractors in Ukraine? Those contractors definitely get paid a fraction of US salary.

Contractors are almost always paid less in my experience after taking into effect stock grants and bonuses. The contracting agency probably gets a nice portion of the takehome though (for having the political capital of being on a preferred vendors list), so to the company they probably pay more than salary.

You also have to factor in the amount of responsibility for pay. A contractor with decent negotiation skils may net out slightly less than a FT senior dev at a company, but they often have less responsibility than even the FT junior and mid-level devs. Not to mention that they never get dragged into internal company politics or loyalty games.

Factor in overtime, or the lack thereof, and you can make more or have far more work/life balance than FTs. That weekend app release? There's an extra $500-$1k that the FTs aren't getting. Company doesn't allow contractors to work over 40 hours for budgeting purposes? Leave at 5 everyday without anyone complaining.

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

#132

Post by PythonicAlpha »

For me it would be interesting to see, if this also sparks remote work for software development contractors, since of test criteria B.

Else, when a software developer freelancer is working directly in a company with software developer employees, the criterion will be difficult to fulfill.

In Germany we have a similar situation, because we also have this discussion, who is an employee (for social security matters). One big criterion is remote work, but still many employers are holding back, since they fear to loose control over the contractor, when he can not look over his shoulder.

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

#134

Post by lstroud »

rtpg wrote: post #111
thaumasiotes wrote: post #109

Earlier quoted context omitted.

> 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…

There’s also a pretty big difference between a Corp to Corp relationship and a 1099.

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

#135

Post by PythonicAlpha »

lstroud wrote: post #133

Why does a court get to establish a rule like this? Shouldn’t this be a legislative responsibility?

Yes, I guess so. Thing is, that legislation is often slow, so courts have to decide matters.

In Germany also the legislation oftentimes is not competent. Many laws are made, that are without value, after they where on trial. So, at least in Germany, courts are oftentimes a second law maker, because they have to check, how all these rules fit together (in the best of all worlds, the legislation should do that beforehand).

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

#136

Post by robbiemitchell »

lstroud wrote: post #133

Why does a court get to establish a rule like this? Shouldn’t this be a legislative responsibility?

Courts interpret laws when their application is unclear or illegal. Sometimes as a matter of course they develop a rules system for interpreting the laws. Then that rules system can get reused in subsequent cases and itself becomes a standard. There are many examples of “tests” courts have developed over the years.

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

#137

Post by e40 »

gnicholas wrote: post #87
hardwaresofton wrote: post #83

Earlier quoted context omitted.

I agree with your assessment (you failed to mention leeway with which rides to take, but maybe it doesn't matter) -- Uber/Lyft would definitely not want to lose control on how their drivers perform their services since it's directly counter to part of their value proposition/brand. I pessimistically assume, however, is that assuming the A/B fight is a lost battle for gig economy compnaies, the next step is to limit t…

> I pessimistically assume, however, is that assuming the A/B fight is a lost battle for gig economy companies, the next step is to limit these employees to being part-time with some kind of How does 20 hrs/week factor in here? I didn't see a reference in the Bloomberg article. Though this is actually a good point — if time spent working isn't a factor, then someone who works for Uber, Lyft, Grubhub, and Google Expre…

Part-time workers don't usually get benefits, which is the main reason Uber is terrified they'll be classified as employees.

Walmart used the part-time distinction to great effect to increase their profits and decrease workers wages. Much has been written about this.

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

#138

Post by e40 »

bdcravens wrote: post #70
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.…

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

Yes. This has been the case in California for some time.

EDIT: typo

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

#139

Post by e40 »

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…

worse benefits

Make that no benefits. In my 35 years in the tech industry I've never seen a contractor that got benefits, since it's the primary reason contractors exist.

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

#140

Post by e40 »

jMyles wrote: post #14

Ouch. Some of my favorite gigs I've ever performed aren't possible under this standard. I question whether this will actually benefit contractors, but I have no doubt that it will benefit bigger, established players who already have full-time cadres.

I'm based in California, and we eliminated all contractor positions about 5 years ago due to the risk. The CA EDD has broad powers which can be triggered by a single phone call from a disgruntled employee or contractor.

I actually couldn't hire someone once because they required a contractor relationship.

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