7 ms·
Regulators created the 1099 / W-2 distinction for a reason. There are probably good reasons to adjust the rules to take into account the so called gig economy,
by cjlars 6y ago
Regulators created the 1099 / W-2 distinction for a reason. There are probably good reasons to adjust the rules to take into account the so called gig economy, but making 1099 nearly illegal is not a net regulatory improvement when considering all the collateral damage.
One option that seems very reasonable to me would be to introduce a third option: Employee (W-2), Independent Contractor (1099), Dependent Contractor (new gig economy group).
- elliekelly 6y agoWhat would be the distinction between "employee" and "dependent contractor"? Unemployment benefits? Health insurance? Minimum wage?
- jedberg 6y agoI suspect dependent contractor and hourly worker would effectively merge. Both would get benefits if they work enough hours. The difference would be whether the boss picks the work hours or you do.
- cjlars 6y agoThe big issues would be when worker starts and ends, self direction in terms of how they do the job (and associated liability), worker's comp, unemployment insurance, and tools / vehicles (I.e. should Uber be required to pay ~50 cents per mile to it's drivers. W-2 says yes, 1099 says no).
- RangerScience 6y ago"Dependent contractor" feels exceptionally well-named. Props to you!
- jedberg 6y ago> One option that seems very reasonable to me would be to introduce a third option: ... Dependent Contractor (new gig economy group). Yeah that's my preferred option too if we must keep the system, but it has a lot of the same problems. Small orgs don't have the resources to hire lawyers to figure out if they can do 1099 or "new thing", and so it will still have the same chilling effect on 1099 work.
- toomuchtodo 6y agoThere should be a chilling effect on some types of employment arrangements where avoidance of worker protections and ancillary compensation was occurring.
- jedberg 6y agoSure but don't do it by mandating what kind of contracts people can enter into. Do it by supporting social services so that they don't have to accept bad contracts.
- toomuchtodo 6y agoI think we are destined to agree to disagree. Evidence has shown that people will be economically coerced into contracts, or are not educated enough to understand the consequences of the contract (gig drivers not knowing how little they're making) and the social services currently do not exist to protect them, nor are they likely to be spun up. Sure, journalists get the short end of the stick, as well as gig workers who don't need the income and just want to do it part time. Edge cases are unfortunate.
- jedberg 6y ago> and the social services currently do not exist to protect them Exactly. Fix that problem instead.
- toomuchtodo 6y agoSo everyone should suffer until those exist because businesses are permitted to take advantage of them? I'm spending low six figures annually on political donations to those who support universal healthcare. I still support shims like this until it gets here. Sorry I'm not fixing it fast enough for you.
- jedberg 6y ago
- AaronFriel 6y agoRepeated below but this comment seems more pertinent: Can the California state legislature create a new federal class of worker? I keep seeing this in threads, but I don't understand the rationale. The United States Federal Government recognizes W-2 and 1099 filings, the State of California cannot invent a new Federal filing status or amend the United States Code, correct?
- jedberg 6y agoNo but they can create a new state classification and then make the employer do a 1099 for that person federally but treat them differently under state law.
- cjlars 6y agoI believe you're correct that federal intervention would be the best outcome here.
- jeffdavis 6y agoI disagree. The federal distinction is mainly for federal taxes. The state is not just concerned with taxes, it's also concerned with other labor laws, so it may need to distinguish differently.
- cjlars 6y agoI mean, you would need both right? You want consistent tax treatment the whole way through and obviously state worker protections would be the main thing. What am I missing?
- jeffdavis 6y agoI don't see why that's helpful. W2 employees would be treated the same as now. 1099 employees would be treated the same from a federal standpoint, but separated into two groups from a state standpoint.
- mycall 6y agoIf we are talking matrices, should there be an Independent Employee? Somehow I see this as another loophole.
- jedberg 6y agoI see Independent Employee as code for hourly worker, and I see hourly worker and dependent contractors being basically the same, other than who chooses what hours one works.
- Izkata 6y agoI see it more as a tree: Work for money -|-- employee |-- contractor -|--- independent | \--- dependent | \-- youtube ad revenue / patreon / other?
- vadym909 6y agoWhats the difference between dependent contractor and W2? What do they get and what do they don't?
- lhorie 6y agoThat's basically what Uber has been pushing for
- walshemj 6y agoProbably as the government don't like the little guy or gal actually working as a real self employed contractor - see IR35 in the UK (oh but self employed layers that's fine )
- malandrew 6y agoIf someone works for two companies such as both Lyft and Uber are they still a dependent contractor? If you have more than one source of income that seems to be mutually exclusive with being dependent, no? What's the criteria for determining whether someone is a dependent contractor? I'm not against the idea, but it's important to have clear unambiguous criteria.