7 ms·

While the communication should have been clearer, this may not be a matter of Upwork wanting to upsell the client, but rather Upwork being under legal pressure

by gojomo 8y ago

While the communication should have been clearer, this may not be a matter of Upwork wanting to upsell the client, but rather Upwork being under legal pressure from the IRS or state employment-protection agency (eg: California EDD) to classify workers as "W-2" employees rather than "1099" contractors – no matter what the workers or employers prefer as being in their own best interests. The government bureaucracies prefer this, and have at different times and in different jurisdictions cracked down on whatever other sorts of work-matching arrangements startups have attempted to use, for themselves or as a clearinghouse for others. The likely threshold for the "compliance issue" could have been that Wallace (the tweetstorm author) had few or no other clients, and was billing this single client full-time hours over a significant period. That full-time exclusivity is a major factor in the tax/regulatory authorities wanting someone to be classified as a salary- or wage-employee. Now, the very reason that the ultimate client prefers to use Upwork, rather than contract directly, is the headache of complying with these rules. They figure: we might screw up the 1099s, or cross some fuzzy compliance barrier, and then be hit with an enforcement action, if we try to handle our own freelancers. But if we use Upwork, well, they're the experts in ensuring "compliance", and have such a large roster of capable freelancers that neither we nor they would be at risk of appearing to be in an exclusive employment relationship. Thus: the ultimate villains here are the tax/employment-regulation authorities. They've made the sort of arrangement that both Wallace and the client prefer incur extra legal risks. Upwork has just been clumsy in communicating that, and helping those on its platform navigate the rules.

CPLX 8y ago
> Upwork has just been clumsy in communicating That’s a pretty big “just” Depriving someone of what had been a key business relationship without any communication is an abject failure.
- gojomo 8y ago
  We know that Wallace is angry, and didn't get clearer info until he hunted it down, and that's certainly a failure. But his account doesn't include a timeframe of how many days he was in this "lockout" state. (Was it a day? A week?) It's not clear if other details would have come via other channels, if not for the early warning he got from his direct backchannel-contact. And suppose he and the buyer had reached a de-facto understanding: "we want to contract you for all your hours; please hold back your hours from other buyers to be ready to take our assignments". That's somewhat indicated by way this was quickly discovered at the moment he finished prior assignments (seemingly from the same buyer), and the buyer tried to hire him for immediate followup assignments. It's exactly that kind of de-facto exclusivity, where a single employer assigns all your work, that gets you slapped by tax/employment authorities. Were there other highly-rated, qualified freelancers the buyer could have used instead? Were there other buyers ready to contract for Wallace's services, at the same rate as he'd been getting? If either or both, then rather than primarily "depriving someone of… a key business relationship", Upwork could in fact have been ensuring enough independent-contractor relationships to keep both buyer and freelancer on the right-side-of-the-law. (It's possible placing a single gig with another freelancer, or taking a single gig from another buyer, would have been enough to prevent the lock-up.) After all, the buyer chose Upwork as the only way they hire contractors – and explicitly rejected the option to hire or contract with Wallace directly. They wanted Upwork to ensure compliance with tax/employment-law... which may be exactly what Upwork did for their paying customer, albeit with missing, poor, or sluggish communication.
  - CPLX 8y ago
    Yeah sure so what. All that rationalization is out the window if they just cut someone off like that without actually communicating those reasons. The reason I take exception to it is that the concept of shadowbanning is deeply baked into the SV/startup culture and it's very often completely unethical. It's a pet peeve of mine. Sure, if you're trying to stop forum spam then who cares. And I do understand that when startups were small they were incredibly vulnerable to just being overwhelmed by an avalanche of fraud. So historically, I get why there's a culture where platforms just ban or restrict people without telling them comes from. But one thing SV has been enormously bad at is not realizing that they aren't feisty underdogs any more, they're the ruling class, and they often have tremendous economic power over people. When people depend on you for their livelihood, or for transportation or housing or similar, then you actually do owe them transparency and an explanation of what's going on.
- chiefalchemist 8y ago
  Could they have done better? Yes. If they wanted to. Could they have "warned" both parties of the legal regs? Yes again. None the less, I suspect this was also in the T&Cs. Whatever the case might be, Upwork is in the matchmaker business - not the relationship business. It's not an agency. It's an escrow of sorts in a fancy wrapper. The less legal exposure - including legal "advice" about what's been happening between the service-needer and the freelancer - is probably, truth be told, what they seek to maintain. It is, after all, not their job / role to do that. Long to short, Upwork could have done better, but so could the other two parties using Upwork. p.s. All both sides needed to do was open an account on another "escrow" site and then split the work between the two. The escrows wouldn't know. But of course, the IRS might.
deleted 8y ago
[deleted]
toss1 8y ago
Yes, it is plausible that there is a potential regulatory issue. Even if it is the key issue, that in no way excuses this horrible treatment, or passing it off as a mere "communication should have been clearer". Complete, absolute failure to contact the worker using your platform in any way?!? Nope, absolutely unacceptable. All UpWork needed to do was to say something like "This work profile, with many projects on a single employer is passing the threshold of 1099 vs W-2 employment, and as such we cannot continue supporting this hiring/working pairing as a freelance intermediary due to regulatory issues. BTW, we have a W2 Payroll solution that you can sign up for immediately to solve this problem. More details here...". The fact that UpWork did no such thing indicates clearly to me that they are not in fact concerned about regulatory issues, but merely using them as an excuse to upsell, while trying to lock-in their worker base by keeping them in the dark. IOW, completely unethical practice. As a biz owner currently using freelancers on several platforms, Upwork just got crossed off my list (just as I'll never intentionally use Uber).
- gojomo 8y ago
  The time frame isn't completely explicit in Wallace's account, but the references to discovering it "this week" and spending "all day" Thursday-before-2pm getting to the bottom of it could indicate a timeframe as short as: (1) Wednesday PM, Wallace finishes "several assignments" for this one client, marking them done in the system - and that on top of the other "dozens" of jobs he's done for them in the last few weeks, including "rush" jobs, flips his account into the "compliance concern" status which hides him from that one client. (2) Thursday AM, friend at agency says, "hey, we can't seem to hire you for more gigs"; Wallace says, "that seems wrong, ask Upwork"; agency quickly responds, "they can't explain, ask on your end". (3) Wallace finally reaches someone at Upwork after lunch Thursday PM, getting the unsatisfying explanation, then posting his angry tweetstorm 2:21PM Thursday/8th. Taking a day or two to explain an exceptional situation, or perhaps a situation that's part of a brand-new policy adopted under legal pressure, is not necessarily an awful failure. We don't really know if there might have been other explanations that would have come a few hours later, or that he missed somehow. It's even possible the status of his account was some short-term temporary "gray out" status, that nudges freelancers/buyers to diversify their counterparties, and that this gray-out status almost always results in a "cure" quickly with no explicit communication required. I would prefer explicit transparency in such situations... but could also understand why the company might be a little coy about directly coaching freelancers. (If they get that coaching even just a little wrong, according to some later interpretation of the contractor rules, it could wind up being used as additional evidence against them.)
mtgx 8y ago
Then why didn't they "just" say so when pressed multiple times about it?
- gojomo 8y ago
  They ultimately did, and it seems like it may not have taken more than a day or half-day for him to get his (ultimately unsatisfying) answer. Sometimes handling exceptional situations takes a day! If many Upworkers are hitting this, then more automation and coverage in public FAQs would be appropriate. But if very few are, or it's a new policy that's fluid and involves case-by-case review, then maybe a day or two clarity is fine for now, even though it caused anger in this one case. Wallace wasn't blocked from all work: just that one buyer, where Upwork's expertise – expertise that Upwork's customers are paying for, to cover their legal risks – flagged a potential "contractor rules" compliance problem.
  - salvar 8y ago
    I didn't see anything in the tweetstorm indicating that this only took a day for Mr. Wallace. Do you have a link to where you got that impression?
alxlaz 8y ago
> This may not be a matter of Upwork wanting to upsell the client > Thus: the ultimate villains here are the tax/employment-regulation authorities. Why be so quick to think that this may not have been Upwork's fault, but the ultimate villains definitely are the tax/employment-regulation authorities? If there is a regulatory issue at stake, the correct thing to do is to disclose it quickly and transparently. Upwork (and other freelancing websites) have no communication problem when it comes to telling you that you need to pay them some new fee, or when it comes to allegedly violating their terms and conditions. But when there's a regulatory problem, it's "just" a problem of communication? Hard to believe.
- jey 8y ago
  It's pretty clear from their wording if you are already familiar with these issues. This tax classification thing of "contractor" vs "employee" is a standard bugaboo lurking in these waters, and Upwork is doing a terrible job of articulating it and dealing with it.
  - scoggs 8y ago
    Their silence comes off at best as "saving their own asses" and at worst as "saving our own asses while doing as little work as possible to retain clients and customers". Neither make for a feel good story.
- TomMarius 8y ago
  Because governments are well known to do this and everything about this sounds just like many other cases.
  - alxlaz 8y ago
    Upwork, Freelancer.com & friends are equally well-known to do this.
    - TomMarius 8y ago
      To do what? These companies have zero interest in this tax-related issue. It's a burden to them, actually.
raverbashing 8y ago
"Clumsy" That's bull in a China shop levels of clumsy. And that's the best case
coding123 8y ago
That would be absolutely illegal. The guy is a company, there is absolutely no regulatory requirements to convert companies into full time employees. Most of that comes from lawsuit fears not regulatory action.
- gojomo 8y ago
  I didn't see anything in the tweetstorm indicating that Mr. Wallace has incorporated. Do you have a link to where you got that impression? (If Mr. Wallace has his own corporation, that might provide some extra cover, but that also might be a rare/expensive enough situation that even Upwork can't pay Wallace Inc., but has to pay Wallace-individual. In fact, there's an answer at Upwork's support forum suggesting that a corporation can't sign up as a freelancer: https://community.upwork.com/t5/Freelancers/Company-account/m-p/265992/highlight/true#M165589 https://community.upwork.com/t5/Freelancers/Company-account/...)
chris_wot 8y ago
OK, but explain why they didn't tell the freelancer this?
- gojomo 8y ago
  They did – just not as fast or as clearly as they ideally would have. See my other post on the vagueness of Wallace's time-frame: he might have even gotten the answer less than 24 hours after his account entered this "no more work with this client" status. I'd share his frustration that it wasn't instant and automatic at the moment he was "shadow-blocked" from his primary buyer's interface, but I also understand that legal-compliance exceptions sometimes take a day (or a few!) to be fully investigated/explained/etc. Maybe there's a human-in-the-loop at Upwork who does a case-by-case review, when an bilateral-relationship hits these might-be-an-employee danger-triggers – and his rapid discovery, same-day inquiry, and rant outraced another process.
stanleydrew 8y ago
I wouldn't be so quick to call the tax/employment-regulation authorities villainous. The reason these regulations exist is to prevent employers from treating people who "should be" employees as contractors where they get fewer benefits. The regulatory environment isn't set up to handle a situation where an employee would rather be a contractor, because that's relatively rare. Ideally there would be some way to take the worker's preference into account, but things just aren't set up that way and so the assumption is that contractors need to be protected from employers who want to screw them. In any individual case an employer could probably document an employee preference for a certain classification and be fine. But UpWork and state employment regulatory bodies are built for handling scale, so processes will tend towards working for the most common situations.
- candiodari 8y ago
  So you mean to say the tax authorities do this unintentionally ? Is that supposed to be better, or worse ? They're some combination of incompetence and malevolence. I feel like incompetence is worse.
  - stanleydrew 8y ago
    That's not what I said at all. They are intentionally trying to prevent employers from abusing employees by forcing them into contracting arrangements with fewer benefits.
    - candiodari 8y ago
      Trying one thing, not achieving that one, but achieving another bad thing in the process. How is that not failing ? Upwork has been in the news more than enough to make it VERY clear that if there's any kind of organisation that needs to be prevented from exploiting others, it's Upwork.
- milch 8y ago
  Making it possible for the worker to document their “preference” would defeat the entire purpose of these regulations. Companies would simply fire anyone who doesn’t have a contractor preference
egypturnash 8y ago
So you're waiving all blame for Upwork not bothering to actually tell the freelancer that they have crossed this "you're working like a full-time employee and the law says you need to actually become one" threshold? Because this sure feels like something that should generate a big HEY YOUR RELATIONSHIP WITH THIS CLIENT NEEDS TO CHANGE email/banner/etc.
- gojomo 8y ago
  Not "waiving all blame", just attempting an accurate diagnosis of what's obviously Upwork's fault (bad communication), and what's the root cause of the disruption in Wallace's earning capability (laws which essentially force Upwork to suppress an otherwise-desirable contractee-contractor relationship).
- reaperducer 8y ago
  I’m surprised Upwork didn’t spell this out for the freelancer from the beginning. I was in a similar situation with a company in LA, and my contracting company alerted me to it, and helped me transition to full time employee status with the client company, once i’d Worked enough hours with the contracting company.
gesman 8y ago
Then Upwork need to communicate that. And not in a "we will call you privately" manner, but: - Making a public statement regarding specific case with Michael. Especially why they decided to go behind his back to communicate with his agency. - Making a public disclosure of reasons they acted so ignorantly toward freelancer. People could and will leave Upwork if they're going to keep this absurdly behavior. The only thing that spread faster than California fire is public opinion in a Twitter age.
scoggs 8y ago
I'd buy this hook-line-and-sinker (especially since I've lived it as a developer) except for the fact that the author stated they hadn't even been contracted 2 months yet when this issue came up. There's no way in even 2 whole months that this would trigger any sort of action, as far as I am aware.
MrBuddyCasino 8y ago
Its the same in Germany. In a misguided attempt to protect workers, they made life much more difficult for freelancers. Some say this was intentionally done to reduce the number of freelancers, because those are not forced to participate in the social systems, which is financially advantageous.
- ozim 8y ago
  You come from wrong end with the 'misguided' assumption. There is loads more people who fear loosing their job than entrepreneurial freelancers. There is load more minimal wage workers which would be abused.
  - MrBuddyCasino 8y ago
    I totally agree that a certain sector of workers needs more protection, not less. But if they really wanted to protect the working poor, they would stop labor leasing and raise the minimum wage. That this goes on as it is currently is outrageous.
wink 8y ago
Have you read the whole thread? According to MW Upwork even said they have no real limit it's just guesswork and apparently the laws also don't have any tangible limits (bu t that's not really an argument, I agree).
- deleted 8y ago
  [deleted]
SilasX 8y ago
That definitely sounds like a very plausible explanation. But Upwork still handled it very poorly. They communicated nothing to the contractor, and they told the employer that the only option whatsoever to deal with this contractor at all was to use some expensive "Wework Payroll" service. That's ridiculous. Absolutely nothing about the situation requires that service. Essentially, Wework was taking over the relationship and then acting as his exclusive agent while making decisions that were against his interests. But you can't have it both ways like that (own the relationship while acting against the client's best interests). They should have been upfront: "Hey, he's worked for you enough that he has to become, legally, an employee; we can't keep billing you through the Wework platform like before. [give possible workarounds]." And copy the contractor on the email. Still a stupid law, but they could have handled it much better.
mathattack 8y ago
I concur. Some companies (look at ridesharing) have been fast and loose with these rules. Others go stricter towards both the spirit and letter of the law. And may times companies go through agencies (and Upwork) to avoid converting people. This isn’t a commentary of the justness of the laws - just that they exist. (The urban legend is they were founded over a MSFT janitor losing out on an IPO windfall.) In this case, I suspect the client is aware of the constraints which is why they insist on having a middleman. There are two sides to the morality of this, but I’m not sure Upwork is guilty of anything other than crappy communication. (All staffing agencies profit on the conversion)

by gojomo 8y ago

CPLX 8y ago

> Upwork has just been clumsy in communicating That’s a pretty big “just” Depriving someone of what had been a key business relationship without any communication is an abject failure.

gojomo 8y ago
We know that Wallace is angry, and didn't get clearer info until he hunted it down, and that's certainly a failure. But his account doesn't include a timeframe of how many days he was in this "lockout" state. (Was it a day? A week?) It's not clear if other details would have come via other channels, if not for the early warning he got from his direct backchannel-contact. And suppose he and the buyer had reached a de-facto understanding: "we want to contract you for all your hours; please hold back your hours from other buyers to be ready to take our assignments". That's somewhat indicated by way this was quickly discovered at the moment he finished prior assignments (seemingly from the same buyer), and the buyer tried to hire him for immediate followup assignments. It's exactly that kind of de-facto exclusivity, where a single employer assigns all your work, that gets you slapped by tax/employment authorities. Were there other highly-rated, qualified freelancers the buyer could have used instead? Were there other buyers ready to contract for Wallace's services, at the same rate as he'd been getting? If either or both, then rather than primarily "depriving someone of… a key business relationship", Upwork could in fact have been ensuring enough independent-contractor relationships to keep both buyer and freelancer on the right-side-of-the-law. (It's possible placing a single gig with another freelancer, or taking a single gig from another buyer, would have been enough to prevent the lock-up.) After all, the buyer chose Upwork as the only way they hire contractors – and explicitly rejected the option to hire or contract with Wallace directly. They wanted Upwork to ensure compliance with tax/employment-law... which may be exactly what Upwork did for their paying customer, albeit with missing, poor, or sluggish communication.
- CPLX 8y ago
  Yeah sure so what. All that rationalization is out the window if they just cut someone off like that without actually communicating those reasons. The reason I take exception to it is that the concept of shadowbanning is deeply baked into the SV/startup culture and it's very often completely unethical. It's a pet peeve of mine. Sure, if you're trying to stop forum spam then who cares. And I do understand that when startups were small they were incredibly vulnerable to just being overwhelmed by an avalanche of fraud. So historically, I get why there's a culture where platforms just ban or restrict people without telling them comes from. But one thing SV has been enormously bad at is not realizing that they aren't feisty underdogs any more, they're the ruling class, and they often have tremendous economic power over people. When people depend on you for their livelihood, or for transportation or housing or similar, then you actually do owe them transparency and an explanation of what's going on.
chiefalchemist 8y ago
Could they have done better? Yes. If they wanted to. Could they have "warned" both parties of the legal regs? Yes again. None the less, I suspect this was also in the T&Cs. Whatever the case might be, Upwork is in the matchmaker business - not the relationship business. It's not an agency. It's an escrow of sorts in a fancy wrapper. The less legal exposure - including legal "advice" about what's been happening between the service-needer and the freelancer - is probably, truth be told, what they seek to maintain. It is, after all, not their job / role to do that. Long to short, Upwork could have done better, but so could the other two parties using Upwork. p.s. All both sides needed to do was open an account on another "escrow" site and then split the work between the two. The escrows wouldn't know. But of course, the IRS might.

deleted 8y ago

[deleted]

toss1 8y ago

Yes, it is plausible that there is a potential regulatory issue. Even if it is the key issue, that in no way excuses this horrible treatment, or passing it off as a mere "communication should have been clearer". Complete, absolute failure to contact the worker using your platform in any way?!? Nope, absolutely unacceptable. All UpWork needed to do was to say something like "This work profile, with many projects on a single employer is passing the threshold of 1099 vs W-2 employment, and as such we cannot continue supporting this hiring/working pairing as a freelance intermediary due to regulatory issues. BTW, we have a W2 Payroll solution that you can sign up for immediately to solve this problem. More details here...". The fact that UpWork did no such thing indicates clearly to me that they are not in fact concerned about regulatory issues, but merely using them as an excuse to upsell, while trying to lock-in their worker base by keeping them in the dark. IOW, completely unethical practice. As a biz owner currently using freelancers on several platforms, Upwork just got crossed off my list (just as I'll never intentionally use Uber).

gojomo 8y ago
The time frame isn't completely explicit in Wallace's account, but the references to discovering it "this week" and spending "all day" Thursday-before-2pm getting to the bottom of it could indicate a timeframe as short as: (1) Wednesday PM, Wallace finishes "several assignments" for this one client, marking them done in the system - and that on top of the other "dozens" of jobs he's done for them in the last few weeks, including "rush" jobs, flips his account into the "compliance concern" status which hides him from that one client. (2) Thursday AM, friend at agency says, "hey, we can't seem to hire you for more gigs"; Wallace says, "that seems wrong, ask Upwork"; agency quickly responds, "they can't explain, ask on your end". (3) Wallace finally reaches someone at Upwork after lunch Thursday PM, getting the unsatisfying explanation, then posting his angry tweetstorm 2:21PM Thursday/8th. Taking a day or two to explain an exceptional situation, or perhaps a situation that's part of a brand-new policy adopted under legal pressure, is not necessarily an awful failure. We don't really know if there might have been other explanations that would have come a few hours later, or that he missed somehow. It's even possible the status of his account was some short-term temporary "gray out" status, that nudges freelancers/buyers to diversify their counterparties, and that this gray-out status almost always results in a "cure" quickly with no explicit communication required. I would prefer explicit transparency in such situations... but could also understand why the company might be a little coy about directly coaching freelancers. (If they get that coaching even just a little wrong, according to some later interpretation of the contractor rules, it could wind up being used as additional evidence against them.)

mtgx 8y ago

Then why didn't they "just" say so when pressed multiple times about it?

gojomo 8y ago
They ultimately did, and it seems like it may not have taken more than a day or half-day for him to get his (ultimately unsatisfying) answer. Sometimes handling exceptional situations takes a day! If many Upworkers are hitting this, then more automation and coverage in public FAQs would be appropriate. But if very few are, or it's a new policy that's fluid and involves case-by-case review, then maybe a day or two clarity is fine for now, even though it caused anger in this one case. Wallace wasn't blocked from all work: just that one buyer, where Upwork's expertise – expertise that Upwork's customers are paying for, to cover their legal risks – flagged a potential "contractor rules" compliance problem.
- salvar 8y ago
  I didn't see anything in the tweetstorm indicating that this only took a day for Mr. Wallace. Do you have a link to where you got that impression?

alxlaz 8y ago

> This may not be a matter of Upwork wanting to upsell the client > Thus: the ultimate villains here are the tax/employment-regulation authorities. Why be so quick to think that this may not have been Upwork's fault, but the ultimate villains definitely are the tax/employment-regulation authorities? If there is a regulatory issue at stake, the correct thing to do is to disclose it quickly and transparently. Upwork (and other freelancing websites) have no communication problem when it comes to telling you that you need to pay them some new fee, or when it comes to allegedly violating their terms and conditions. But when there's a regulatory problem, it's "just" a problem of communication? Hard to believe.

jey 8y ago
It's pretty clear from their wording if you are already familiar with these issues. This tax classification thing of "contractor" vs "employee" is a standard bugaboo lurking in these waters, and Upwork is doing a terrible job of articulating it and dealing with it.
- scoggs 8y ago
  Their silence comes off at best as "saving their own asses" and at worst as "saving our own asses while doing as little work as possible to retain clients and customers". Neither make for a feel good story.
TomMarius 8y ago
Because governments are well known to do this and everything about this sounds just like many other cases.
- alxlaz 8y ago
  Upwork, Freelancer.com & friends are equally well-known to do this.
  - TomMarius 8y ago
    To do what? These companies have zero interest in this tax-related issue. It's a burden to them, actually.

raverbashing 8y ago

"Clumsy" That's bull in a China shop levels of clumsy. And that's the best case

coding123 8y ago

That would be absolutely illegal. The guy is a company, there is absolutely no regulatory requirements to convert companies into full time employees. Most of that comes from lawsuit fears not regulatory action.

gojomo 8y ago
I didn't see anything in the tweetstorm indicating that Mr. Wallace has incorporated. Do you have a link to where you got that impression? (If Mr. Wallace has his own corporation, that might provide some extra cover, but that also might be a rare/expensive enough situation that even Upwork can't pay Wallace Inc., but has to pay Wallace-individual. In fact, there's an answer at Upwork's support forum suggesting that a corporation can't sign up as a freelancer: https://community.upwork.com/t5/Freelancers/Company-account/m-p/265992/highlight/true#M165589 https://community.upwork.com/t5/Freelancers/Company-account/...)

chris_wot 8y ago

OK, but explain why they didn't tell the freelancer this?

gojomo 8y ago
They did – just not as fast or as clearly as they ideally would have. See my other post on the vagueness of Wallace's time-frame: he might have even gotten the answer less than 24 hours after his account entered this "no more work with this client" status. I'd share his frustration that it wasn't instant and automatic at the moment he was "shadow-blocked" from his primary buyer's interface, but I also understand that legal-compliance exceptions sometimes take a day (or a few!) to be fully investigated/explained/etc. Maybe there's a human-in-the-loop at Upwork who does a case-by-case review, when an bilateral-relationship hits these might-be-an-employee danger-triggers – and his rapid discovery, same-day inquiry, and rant outraced another process.

stanleydrew 8y ago

I wouldn't be so quick to call the tax/employment-regulation authorities villainous. The reason these regulations exist is to prevent employers from treating people who "should be" employees as contractors where they get fewer benefits. The regulatory environment isn't set up to handle a situation where an employee would rather be a contractor, because that's relatively rare. Ideally there would be some way to take the worker's preference into account, but things just aren't set up that way and so the assumption is that contractors need to be protected from employers who want to screw them. In any individual case an employer could probably document an employee preference for a certain classification and be fine. But UpWork and state employment regulatory bodies are built for handling scale, so processes will tend towards working for the most common situations.

candiodari 8y ago
So you mean to say the tax authorities do this unintentionally ? Is that supposed to be better, or worse ? They're some combination of incompetence and malevolence. I feel like incompetence is worse.
- stanleydrew 8y ago
  That's not what I said at all. They are intentionally trying to prevent employers from abusing employees by forcing them into contracting arrangements with fewer benefits.
  - candiodari 8y ago
    Trying one thing, not achieving that one, but achieving another bad thing in the process. How is that not failing ? Upwork has been in the news more than enough to make it VERY clear that if there's any kind of organisation that needs to be prevented from exploiting others, it's Upwork.
milch 8y ago
Making it possible for the worker to document their “preference” would defeat the entire purpose of these regulations. Companies would simply fire anyone who doesn’t have a contractor preference

egypturnash 8y ago

So you're waiving all blame for Upwork not bothering to actually tell the freelancer that they have crossed this "you're working like a full-time employee and the law says you need to actually become one" threshold? Because this sure feels like something that should generate a big HEY YOUR RELATIONSHIP WITH THIS CLIENT NEEDS TO CHANGE email/banner/etc.

gojomo 8y ago
Not "waiving all blame", just attempting an accurate diagnosis of what's obviously Upwork's fault (bad communication), and what's the root cause of the disruption in Wallace's earning capability (laws which essentially force Upwork to suppress an otherwise-desirable contractee-contractor relationship).
reaperducer 8y ago
I’m surprised Upwork didn’t spell this out for the freelancer from the beginning. I was in a similar situation with a company in LA, and my contracting company alerted me to it, and helped me transition to full time employee status with the client company, once i’d Worked enough hours with the contracting company.

gesman 8y ago

Then Upwork need to communicate that. And not in a "we will call you privately" manner, but: - Making a public statement regarding specific case with Michael. Especially why they decided to go behind his back to communicate with his agency. - Making a public disclosure of reasons they acted so ignorantly toward freelancer. People could and will leave Upwork if they're going to keep this absurdly behavior. The only thing that spread faster than California fire is public opinion in a Twitter age.

scoggs 8y ago

I'd buy this hook-line-and-sinker (especially since I've lived it as a developer) except for the fact that the author stated they hadn't even been contracted 2 months yet when this issue came up. There's no way in even 2 whole months that this would trigger any sort of action, as far as I am aware.

MrBuddyCasino 8y ago

Its the same in Germany. In a misguided attempt to protect workers, they made life much more difficult for freelancers. Some say this was intentionally done to reduce the number of freelancers, because those are not forced to participate in the social systems, which is financially advantageous.

ozim 8y ago
You come from wrong end with the 'misguided' assumption. There is loads more people who fear loosing their job than entrepreneurial freelancers. There is load more minimal wage workers which would be abused.
- MrBuddyCasino 8y ago
  I totally agree that a certain sector of workers needs more protection, not less. But if they really wanted to protect the working poor, they would stop labor leasing and raise the minimum wage. That this goes on as it is currently is outrageous.

wink 8y ago

Have you read the whole thread? According to MW Upwork even said they have no real limit it's just guesswork and apparently the laws also don't have any tangible limits (bu t that's not really an argument, I agree).

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SilasX 8y ago

That definitely sounds like a very plausible explanation. But Upwork still handled it very poorly. They communicated nothing to the contractor, and they told the employer that the only option whatsoever to deal with this contractor at all was to use some expensive "Wework Payroll" service. That's ridiculous. Absolutely nothing about the situation requires that service. Essentially, Wework was taking over the relationship and then acting as his exclusive agent while making decisions that were against his interests. But you can't have it both ways like that (own the relationship while acting against the client's best interests). They should have been upfront: "Hey, he's worked for you enough that he has to become, legally, an employee; we can't keep billing you through the Wework platform like before. [give possible workarounds]." And copy the contractor on the email. Still a stupid law, but they could have handled it much better.

mathattack 8y ago

I concur. Some companies (look at ridesharing) have been fast and loose with these rules. Others go stricter towards both the spirit and letter of the law. And may times companies go through agencies (and Upwork) to avoid converting people. This isn’t a commentary of the justness of the laws - just that they exist. (The urban legend is they were founded over a MSFT janitor losing out on an IPO windfall.) In this case, I suspect the client is aware of the constraints which is why they insist on having a middleman. There are two sides to the morality of this, but I’m not sure Upwork is guilty of anything other than crappy communication. (All staffing agencies profit on the conversion)