4 ms·

Ask Microsoft how it works out for a company when contractors are treated as employees[1]. What ticks me off is that before that lawsuit, I was really enjoying

Ask Microsoft how it works out for a company when contractors are treated as employees[1]. What ticks me off is that before that lawsuit, I was really enjoying being a contractor then that happened and companies became really skittish and a bit hostile. 1) https://www.reuters.com/article/businesspropicks-us-findlaw-dont-treat-c-idUSTRE53063S20090401 https://www.reuters.com/article/businesspropicks-us-findlaw-...

intopieces 8y ago
Yep. As someone who hired contractors at a company that competes with Google, I can tell you that this case was slide 1 for our training. Google already treats their contractors the best in the industry by far - free food, free transportation to work, etc. Their hands are tied.
jasode 8y ago
Microsoft losing that contractors case also had a lot of repercussions affecting legitimate contractors. In the early 1990s before Microsoft lost, I easily got direct-1099 contracting jobs at various companies. Afterwards, every company got scared and overcorrected away from 1099s. It didn't matter if you incorporated as "Joe's Programming Solutions Inc". They insisted you had to go through one of their "approved vendors" which was basically just a middleman company set up to hire you as a W-2 employee. That intermediate company would then contract you to the 1099-averse client. Microsoft's defeat was when all the "W-2 bodyshops" popped up. Instead of me earning $100 directly from a client, I had to find a W-2 shop to "hire" me as an employee and let them skim $30 from my hourly billing so I would only net $70/hour. It wasn't too happy about that but that's the closest I could get to being a freelancer. I really didn't want to be anyone's employee. I believe most contractors share my opinion that the overall effect of the court judgement against Microsoft was a net negative and it didn't improve work conditions for contractors. Instead, it just made it worse by enriching middlemen we never asked for. It's also a net negative for the client company because they pay a somewhat higher bill rate to the W-2 company because they provide the service of "legal cover" to protect against a Microsoft type of lawsuit or IRS reclassification. It's a textbook version of economic inefficiencies.
- bsimpson 8y ago
  In exchange for the $30 an hour, you get a meaningless phone call from someone who works there every couple months and access to a terrible health plan. My plan was literally "pay $100 per month to avoid the 2% Obamacare tax." It covered basically nothing, and the deductible was ridiculous. The only value "talent agencies" add is that you can start earning money immediately, instead of jumping through whatever hoops vendors need to jump through to be approved nowadays.
  - protomyth 8y ago
    You got hooked up with someone bad, which is a shame. I had a great health plan as a contractor (through my agency) and they were great about finding fun jobs. I do know a lot of agents didn't tell folks what rate they were being billed out at (I suspect that $30/hour would mean you are not getting good value), but my pay was a % of the bill rate.
    - bsimpson 8y ago
      I actually negotiated my pay with the hiring manager. I have no idea what the agency was paid. I got the invitation directly from the large company I was consulting for. They explained to me that they didn't work directly with freelancers; they had processes in place to prevent TVCs from being retroactively deemed FTEs (and compensated for withheld benefits). Therefore, they put me in touch with an agency whose only function was to hire freelancers as W2 employees and rent them back out to the company. I don't recall exactly: I think the agency's only client was the firm I was consulting for. They might have had 1 or 2 more. The whole we-only-exist-because-bureaucracy was pretty transparent. Funny story: one of the TVC restrictions was that you could only be one for a year. (At the end of the year, you had to either convert to full-time or take 6 months off.) Partway through the year, my client decided they wanted to switch agencies. Thousands of us got an email that basically said "As of next week, you legally work for Other Agency. Your day-to-day work will be the same."
      - protomyth 8y ago
mc32 8y ago
I don't think Google is going to agree to the demands. I believe they already segregate many of their low-level non-direct hires in completely different campuses. Nothing wrong with that but it indicates that they have a reason to keep many separate and don't want them physically close to sensitive projects. And I agree with you. If the Microsoft scenario happens it will end up worse for people who prefer being a consultant/contractor. Of course, some temps would prefer an FTE role.

intopieces 8y ago

Yep. As someone who hired contractors at a company that competes with Google, I can tell you that this case was slide 1 for our training. Google already treats their contractors the best in the industry by far - free food, free transportation to work, etc. Their hands are tied.

jasode 8y ago

Microsoft losing that contractors case also had a lot of repercussions affecting legitimate contractors. In the early 1990s before Microsoft lost, I easily got direct-1099 contracting jobs at various companies. Afterwards, every company got scared and overcorrected away from 1099s. It didn't matter if you incorporated as "Joe's Programming Solutions Inc". They insisted you had to go through one of their "approved vendors" which was basically just a middleman company set up to hire you as a W-2 employee. That intermediate company would then contract you to the 1099-averse client. Microsoft's defeat was when all the "W-2 bodyshops" popped up. Instead of me earning $100 directly from a client, I had to find a W-2 shop to "hire" me as an employee and let them skim $30 from my hourly billing so I would only net $70/hour. It wasn't too happy about that but that's the closest I could get to being a freelancer. I really didn't want to be anyone's employee. I believe most contractors share my opinion that the overall effect of the court judgement against Microsoft was a net negative and it didn't improve work conditions for contractors. Instead, it just made it worse by enriching middlemen we never asked for. It's also a net negative for the client company because they pay a somewhat higher bill rate to the W-2 company because they provide the service of "legal cover" to protect against a Microsoft type of lawsuit or IRS reclassification. It's a textbook version of economic inefficiencies.

bsimpson 8y ago
In exchange for the $30 an hour, you get a meaningless phone call from someone who works there every couple months and access to a terrible health plan. My plan was literally "pay $100 per month to avoid the 2% Obamacare tax." It covered basically nothing, and the deductible was ridiculous. The only value "talent agencies" add is that you can start earning money immediately, instead of jumping through whatever hoops vendors need to jump through to be approved nowadays.
- protomyth 8y ago
  You got hooked up with someone bad, which is a shame. I had a great health plan as a contractor (through my agency) and they were great about finding fun jobs. I do know a lot of agents didn't tell folks what rate they were being billed out at (I suspect that $30/hour would mean you are not getting good value), but my pay was a % of the bill rate.
  - bsimpson 8y ago
    I actually negotiated my pay with the hiring manager. I have no idea what the agency was paid. I got the invitation directly from the large company I was consulting for. They explained to me that they didn't work directly with freelancers; they had processes in place to prevent TVCs from being retroactively deemed FTEs (and compensated for withheld benefits). Therefore, they put me in touch with an agency whose only function was to hire freelancers as W2 employees and rent them back out to the company. I don't recall exactly: I think the agency's only client was the firm I was consulting for. They might have had 1 or 2 more. The whole we-only-exist-because-bureaucracy was pretty transparent. Funny story: one of the TVC restrictions was that you could only be one for a year. (At the end of the year, you had to either convert to full-time or take 6 months off.) Partway through the year, my client decided they wanted to switch agencies. Thousands of us got an email that basically said "As of next week, you legally work for Other Agency. Your day-to-day work will be the same."
    - protomyth 8y ago

mc32 8y ago

I don't think Google is going to agree to the demands. I believe they already segregate many of their low-level non-direct hires in completely different campuses. Nothing wrong with that but it indicates that they have a reason to keep many separate and don't want them physically close to sensitive projects. And I agree with you. If the Microsoft scenario happens it will end up worse for people who prefer being a consultant/contractor. Of course, some temps would prefer an FTE role.