It looks like the rule originally announced in Oct22 will be go in effect the next few months. Biden admin to announce independent contractor rule that could upend gig economy (msn.com) "The U.S. Department of Labor rule, which was first proposed in 2022 and is likely to face legal challenges, will require that workers be considered employees entitled to more benefits and legal protections than contractors when they are "economically dependent" on a company." and "The rule is among the most impactful regulations ever issued by the Labor Department office that enforces U.S. wage laws, according to Marc Freedman, vice president at the U.S. Chamber of Commerce, the largest U.S. business lobby. But he said the draft version of the rule provides little guidance to companies on where to draw the line between employees and contractors. "Economic dependence is an elusive concept that in some cases may end up being defined by the eyes of the beholder," Freedman said. The Labor Department in the proposed rule said it would consider factors such as a worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer’s business." Has anyone had the opportunity to really drill down into this matter? I'm curious how this will impact musicians and the venues that hire them. How does a musician/contractor (gigee) prove to a venue/employer (gigor) that the "gigee" is economically dependent on that "gig" with that "gigor"? And, to what degree must a "gigor" confirm the veracity of a "gigee's" assertion as regards the "gigee's economic dependence on the "gigor's gig"? Also .... it's quite possible the economic dependence of a gigee on a gigor's gig could change with time depending upon the success the gigee has in landing gigs at a later time. Seems like this new rule is going to require a lot of additional paperwork and may be quite burdensome.
I think this is geared more towards employers like Instacart/Uber etc who skirt the lines between actually employing people and hide behind being software companies to avoid labor regs. I doubt it will affect people who are actually independent contractors and artisans.
This will be interesting and impactful if enforced. On balance I do not view it as a positive. In many instances contract work benefits the worker as well as the employer. It allows the worker flexibility. I’ve worked 1099 for companies before and I actually prefer it, as it is easier to work less than 40 hours and tended to be more involved in value added work vs bullshit employee meetings and other stuff. If enforced this would be very disruptive to Uber and other contractors. Gig work has lead to a much more flexible economy. The ideas behinds 40 hr a week employee relationship is really outdated in many cases.
The only way this is enforced is if Biden (or a Democrat) wins the election and somehow a conservative court beholden to bosses doesn't buy into a flimsy, cobbled together legal argument funded by the people its meant to take on. Gator Football has a better chance of going undefeated next year than this coming to pass in any meaningful way. Reminds me of the Obama climate rules they worked diligently on for years, never went into effect because of legal challenges and was thrown in the trash the second Trump entered office. Or the student loan forgiveness they thought they had an airtight legal case for when they are dealing with raving lunatics in the court who dont give a shit about what statutes say. Gotta love the Democrats man.
Just pandering. The funny thing is that in our industry...if I hire an associate. They will likely benefit far more by being an independent contractor. As I will compensate an independent contractor at a higher rate. That said because of the nonsense laws I would only contract with a business (like we set up for my wife when she graduated and started as an IC) and I think some get scared off by what they have been told all their life. I gave the option to each associate we have ever hired whether they wanted to be an employee or an IC. Both chose employee. While it creates a little extra work for me. We are likely saving a little in the grand scheme. And almost certainly they would have extra write offs that would lower their overall tax burden if they chose to be an IC. All that matters is that both sides are happy.
The article touches on something I had not really considered about Uber / Lyft. The article implies the driver, on an hourly basis, makes less than minimum wage. So, if these Regulations close that loophole, that is a good thing. This can and should have an effect of ending independent contractors who cannot negotiate a higher fee and make less than minimum wage on an hourly basis.
Maybe Uber and the like should allow people the option like you do, but their whole business model is built around foreclosing that possibility
I have not looked into Uber and the other industries. I suspect there are situations where they might be able to abuse their power with the difference. And certainly we are dealing with a professional making enough money where deductions are likely more meaningful if they decide to be an IC (I don't know how much an uber driver makes in the big cities). That said...my initial thought is Uber as created an easy access entry point to a job that can provide. And to keep it simple an IC makes sense. Again I do not know the economics. I guess part of it is I can see uber as a part time gig? And I might be ignorant on my views when it comes to that industry. FexEx I think has tried a similar approach with some of their Ground delivery. That one is interesting as UPS seems to be more employee driven.
I have known so many businesses that claim their employees are contractors that it is ridiculous. I hope these rules prevent this from happening as much. When one person commits employment or tax fraud we all pay.
The idea a company that hires an IC is committing tax fraud is just ignorant. A truly ridiculous statement. The IC has to pay taxes. The question is about FICA in the discussion on what is fair between the two parties. Along with benefits. If the employer wants to go the IC route and offers a way to make enough for the IC where both parties are happy. Great. If they don’t then they will fail. Same if they go the employee route where they will offer less “pay” to cover the employer portion of FICA and likely extra benefits.
