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Because the more you treat contractors as employees (including giving them the same benefits), the more likely it is that they'll sue you claiming they really a

by kjksf 9y ago

Because the more you treat contractors as employees (including giving them the same benefits), the more likely it is that they'll sue you claiming they really are full-time employees and therefore deserve more. Exactly that happened to Microsoft (https://www.reuters.com/article/businesspropicks-us-findlaw-dont-treat-c-idUSTRE53063S20090401 https://www.reuters.com/article/businesspropicks-us-findlaw-...). Microsoft lost and, as part of preventing such lawsuits in the future, they limited things that are available to contractors.

chii 9y ago
Ianal, but I thought that contractors normally get paid more than FTE, for the risk contacting implies. Seems to me that a company is justified in treating them differently.
- giobox 9y ago
  They do normally if they are skilled "consultant" type gigs. In recent years though, using contractors instead of FTEs has been popular as a trick to get cheap labor - it's largely one of the foundations of the so-called "gig economy". As an example, this is most likely one reason why Uber spends such large amounts of money fighting any attempt to re-classify their drivers as FTEs in several different countries. Many countries have some kind of legal framework that tries to prevent exploitation of unskilled employees by classifying them as self-employed contractors instead. Claiming your employees are contractors is sometimes abused as a way to avoid a bunch of expensive things employees might have a statutory entitlement to, like sick pay, holiday allowances etc. https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status https://www.theguardian.com/technology/2016/oct/28/uber-uk-t...
- tptacek 9y ago
  The market pays some contractors more than full-time employees, but no regulation forces it to, and there are classes of contractors that make less, especially when taxes and benefits are accounted for, than FTEs.
mc32 9y ago
Exactly --the whole Microsoft lawsuit in the early 2000s? Contractors were being treated too nicely such they legally could look like employees. Also, food can be considered part of compensation for tax purposes --which is why some companies only allow x-number of per-employee "guests" per month.

by kjksf 9y ago

chii 9y ago

Ianal, but I thought that contractors normally get paid more than FTE, for the risk contacting implies. Seems to me that a company is justified in treating them differently.

giobox 9y ago
They do normally if they are skilled "consultant" type gigs. In recent years though, using contractors instead of FTEs has been popular as a trick to get cheap labor - it's largely one of the foundations of the so-called "gig economy". As an example, this is most likely one reason why Uber spends such large amounts of money fighting any attempt to re-classify their drivers as FTEs in several different countries. Many countries have some kind of legal framework that tries to prevent exploitation of unskilled employees by classifying them as self-employed contractors instead. Claiming your employees are contractors is sometimes abused as a way to avoid a bunch of expensive things employees might have a statutory entitlement to, like sick pay, holiday allowances etc. https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status https://www.theguardian.com/technology/2016/oct/28/uber-uk-t...
tptacek 9y ago
The market pays some contractors more than full-time employees, but no regulation forces it to, and there are classes of contractors that make less, especially when taxes and benefits are accounted for, than FTEs.

mc32 9y ago

Exactly --the whole Microsoft lawsuit in the early 2000s? Contractors were being treated too nicely such they legally could look like employees. Also, food can be considered part of compensation for tax purposes --which is why some companies only allow x-number of per-employee "guests" per month.