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California passes bill that classifies gig economy workers as employees

nytimes.com

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Re: California passes bill that classifies gig economy workers as employees

#321

Post by gamblor956 »

dsfyu404ed wrote: post #277
whiddershins wrote: post #246

All these people making Uber money on the side ... the whole thing was possible in part due to the low friction in (and also complete disregard for) the regulatory environment. I’m in NYC and honestly can’t figure out how to legally hire a studio assistant for a few hours a week without being at risk for any of a number of lawsuit vectors. So I just coil my own cables. And I don’t mentor people who want to learn some…

You could 1099 them but considering the likelihood of someone who's taking an entry level music job claiming the income on their taxes seems like a recipe for an audit for both parties. Realistically you should probably do what everyone else does in this situations and pay under the table. Think of the lost taxes as billing the government for making stupid laws that can't reasonably be followed even when you want to…

Or instead, if you're really not willing to learn something you'll do with every future hire, you could just use a small business payroll service provider that specializes in this sort of stuff to do it for you so that you don't risk prison time.

Payroll might be complicated to learn the first time. But it's like riding a bike, once you learn it's trivial to do.

Re: California passes bill that classifies gig economy workers as employees

#322

Post by gamblor956 »

monkbroc wrote: post #183

Is there any reason to believe the ride sharing companies won't reorganize their drivers using a similar model to what Amazon uses for their delivery drivers: contract to external firms that employ drivers so the parent entity is absolved of responsibility? https://www.nytimes.com/2019/09/05/us/amazon-delivery-driver...

Labor law jurisprudence allows for piercing the veil when a company outsources its primary revenue generating function.

Re: California passes bill that classifies gig economy workers as employees

#324

Post by scottmsul »

influx wrote: post #188
stickfigure wrote: post #14

If this actually gets enforced, I predict we'll all be talking about the law of unintended consequences in a year's time.

Won’t this just mean that Uber hires all their drivers, prevents them from driving on another service, waits for Lyft to die and then raise rates?

Everyone here's talking about Uber, I would guess most of the unintended consequences will be less visible. Smaller companies, freelancers, independent contractors, consultants, that whole ecosystem might undergo a chilling effect.

Re: California passes bill that classifies gig economy workers as employees

#325

Post by usaar333 »

pcwalton wrote: post #40
xbeta wrote: post #27

Workers have no choice but to get W2 status to get health care insurance, retirement compensation, etc. And they fix it by simply moving them as FT employees, because to the State of California that's the easiest thing they can do. Single-payer free healthcare for all - which is the right thing to do is too much for the State. This is just how bad the State of California is being run.

California already has among the most generous state-level medical benefits in the country. Here, it's hard to be in a situation in which one simultaneously can't afford insurance and doesn't qualify for Medicare or Medi-Cal (California Medicaid). Singling out California for not taking the unprecedented step of rolling out single-payer alone--which is a difficult proposition to say the least in a country that guarant…

Here's the thresholds: https://www.coveredca.com/PDFs/FPL-chart.pdf

Med-cal is basically poverty level coverage (138% FPL - $29k for a family of 3)

The main issues with can't afford (or more honestly can afford but it is very painful) healthcare are at the higher numbers as subsidies fade out. $83k for a family of 3 has no subsidies, but even high deductible insurance is going to go for $10k/year (meaning expected costs are realistically hitting above $13k). That's over 20% of take-home income.

Re: California passes bill that classifies gig economy workers as employees

#326

Post by strictnein »

dustinmoris wrote: post #291
neltnerb wrote: post #272

Earlier quoted context omitted.

Well, other than the minor hassle that they need to know how to issue a W2 and get enrolled for workers comp insurance and pay their estimated taxes for them. None are super hard, but they are barriers for people who aren't used to hiring people, which is the case for I think a lot of self-employed people. I only finally bothered to learn how to do it all last year when I needed some extra help with projects for my c…

> So either it's expensive to hire a CFO just for that, or expensive in your time to learn it all when your main goal is to actually get work done that produces revenue. This attitute is exactly why those laws are needed. As a business owner if you want to hire some other human being to work for your company then it should be your natural instinct that wants you to learn everything that makes the life of that other h…

> As a business owner if you want to hire some other human being to work for your company then it should be your natural instinct that wants you to learn everything that makes the life of that other human being easy to work for you

Everything? That'd be thousands of pages of regulations to sift through and understand. So, no, there's no "natural instinct" to do that.

Kind of going overboard on the rest of it. They just want to hire some part time help, not staff a coal mine.

Re: California passes bill that classifies gig economy workers as employees

#327

Post by miracle2k »

Quanttek wrote: post #298
whiddershins wrote: post #246

All these people making Uber money on the side ... the whole thing was possible in part due to the low friction in (and also complete disregard for) the regulatory environment. I’m in NYC and honestly can’t figure out how to legally hire a studio assistant for a few hours a week without being at risk for any of a number of lawsuit vectors. So I just coil my own cables. And I don’t mentor people who want to learn some…

That "flexibility" means precarity as the majority of gig employees do this full-time: >In California, the legislation will affect at least one million workers who have been on the receiving end of a decades-long trend of outsourcing and franchising work, making employer-worker relationships more arm’s-length. Many people have been pushed into contractor status with no access to basic protections like a minimum wage…

Of course they don't have to schedule them. But if Uber has to take them on as employees, then Uber might reasonably want to take advantage of their right as an employer to force them to work certain shifts.

Re: California passes bill that classifies gig economy workers as employees

#328

Post by gamblor956 »

quaquaqua1 wrote: post #209
Aeolun wrote: post #201

Earlier quoted context omitted.

Does it matter who the employees are employed by? All rules for an employer apply just as well for the employing company as they would for Amazon if they employed them directly.

It does matter. Here's why: Uber agrees to pay X rate currently to drivers. A law is passed that makes X rate even more unprofitable. Uber then engages the services of an external company which provides labor at a lower rate, fires all of the current Uber drivers, and encourages them to work for the new external company. The external company, if sued, does not have the resources that Uber has, and simply goes bankrup…

The law allows for veil piercing in situations like that, meaning they could skip the temporary intermediaries and just treat Uber as the employer.

Believe it or not, they did think of issues like this when drafting the law. Especially since almost all of these other issues brought up in the comments are decades old and already addressed by existing labor laws.

Re: California passes bill that classifies gig economy workers as employees

#329

Post by hn_throwaway_99 »

dnautics wrote: post #270
Mizza wrote: post #71

Can anybody here with proper experience break down the "ABC" test for me? It seems to me like the "C" part (that the work is "part of a company’s regular business") applies to literally any company who would hire a freelancer to work on their product or service.

> applies to literally any company who would hire a freelancer to work on their product or service. IANAL but I imagine that's exactly the point. There are always incidentals, like let's say you're a restaurant and you need to hire a plumber to fix your toilet or if you're a real estate agent and you need to hire a programmer to do your website.

No, those examples you give would be taken care of as part of the "B" part of the test. Plumbing and website design is certainly not the main business of restaurants and real estate agents.

The problem becomes if you need to hire a freelance programmer to do some work for your software development company. There the "C" part of the test becomes a lot more of a gray area IMO.

Re: California passes bill that classifies gig economy workers as employees

#330

Post by dsfyu404ed »

gamblor956 wrote: post #321
dsfyu404ed wrote: post #277

Earlier quoted context omitted.

You could 1099 them but considering the likelihood of someone who's taking an entry level music job claiming the income on their taxes seems like a recipe for an audit for both parties. Realistically you should probably do what everyone else does in this situations and pay under the table. Think of the lost taxes as billing the government for making stupid laws that can't reasonably be followed even when you want to…

Or instead, if you're really not willing to learn something you'll do with every future hire, you could just use a small business payroll service provider that specializes in this sort of stuff to do it for you so that you don't risk prison time. Payroll might be complicated to learn the first time. But it's like riding a bike, once you learn it's trivial to do.

It's not about the complexity, it's the cost and risk exposure. Employees come with costs (workers comp being the big one) and risk exposure that 1099 workers do not have (and what the employer gets in the trade-off is more direct control). For someone doing menial work and getting industry experience on the side (most trades have entry level jobs like this) that additional cost/risk could be the difference between their position existing and just tacking the responsibility onto some other existing employee.
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