Uber and Lyft ordered by California judge to classify drivers as employees

A fourth contractor thinks the price is too little and rejects it outright.

The fourth contractor has "submitted a lower bid"?

There is no advantage to the individuals from that decision, nor is there any intended.

So people spending 5 years working for the same company doing the same commute and same work as employees, subject to the same kind of control over their work etc., cannot maintain a claim to be self-employeed for the tax flexibility that goes with that.

However. You "writing code" as a contractor is not the same work as an employee if the manner in which you are doing it differs.

For example, if you have to purchase your own equipment, set your own hours, work on a "statement of work" basis instead of set hours, can substitute a subcontractor to do your work for you, and can and sometimes do work for multiple companies at the same time, and often switch the site at which you are working, those sorts of things signify that you are not operating as an employee would, and that it would be correct to classify you as running your own business and therefore subject to business taxation instead.

Of course every contractor wanted to claim that status for the tax benefits, which are basically less income tax and the ability to deduct more expenses. The government saw this and decided, although the law was what it was all along, people weren't applying it adequately. So they changed who does the assesment, and the tax liability if they get it wrong, from the contractor to the company hiring them. This is called the IR35 reform; IR35 is the name of the legislation that sets out what kind of working patterns must be treated as employment for tax purposes.

Although the reform will change who is liable for making the assessment, in principle it is still possible for a contractor to be retroactively assessed for their past as having been an employee all along, and have to pay back-tax. That's because you are supposed to have done the right assessment for yourself already, or perhaps your accountant should. This seems unlikely for most people now as long as the changes are followed through, but some people have been caught out by it.

IRS Common Law Rules for Determining Status:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits? Will the relationship continue and is the work performed a key aspect of the business?

Source: https://www.irs.gov/businesses/small-businesses-self-employe...

CA ABC Test:

Autonomy. The worker must be free from the control and direction of the hiring entity with regard to how the work is performed.

Business Dissimilarity. The worker’s labor or services must fall outside the usual course of the hiring entity’s business.

Custom of the Worker. The worker must be customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

Source: https://leginfo.legislature.ca.gov/faces/codes_displaySectio...

Obviously you may stop working with a person if their prices are too high or because quality of their work is shit.

However if you use this as a pretence for firing contractors, but the real reason you are firing them is because of their sex / gender / race - that would be illegal.

In the same vein, if you fire contractors for doing things that are none of your business, and it is common knowledge that you do that and exercise control you should not have over them, then a court may decide that in fact the relationship is not that of a contractor. That in fact this is nothing more than a legal fiction created for the purpose of tax avoidance or similar.