10 ms·

>Contractors love the good pay and engaging work in Google's data centers. They resent that Google and its staffing firm, Modis Engineering, make them quit ever

by jasode 6y ago

>Contractors love the good pay and engaging work in Google's data centers. They resent that Google and its staffing firm, Modis Engineering, make them quit every two years. >[...] But those two-year contracts are written in stone. Workers like Wait are not usually allowed to apply either to renew their contracts or to do the same job as a Google employee. If they want to keep working in the same job, they have to leave the data center for six months and then come back and apply again — but neither Google nor Modis will tell workers why. >[...] Google likely requires the six-month leave due to federal employment law, Barbara Figari, an employment attorney in California, told Protocol. Yes. All companies got rattled by Microsoft losing their lawsuit with permatemp contractors in 2000: https://www.google.com/search?q=microsoft+contractors+lawsuit+settle https://www.google.com/search?q=microsoft+contractors+lawsui... Before the Microsoft settlement, I was able to sell my services directly to the client company as a 1099 freelance contractor because I did not want to be an employee. But after that, all companies got paranoid about contractors and I then had to go through a middleman bodyshop as a "fake" W-2 employee. The programming bodyshop then skims a fee from my hourly rate to provide a "lawsuit shield" for the client that wants to pay for my services.

taurath 6y ago
The right thing for the company to do would be to hire people as employees, but it appears that worker protections are too strong for them to want to financially. Universal healthcare/dental/paid leave would allow for companies who’s employees currently are the only receivers of these “benefits” to not require companies to hold onto people so long. Worker protections are supposed to be so that catastrophic job loss is less catastrophic and companies can’t just arbitrarily decide they need 20000 people one month and 0 the next. But we should definitely look into a better deal for the workers and give companies less power over their livelihood.
- dannyw 6y ago
  Some people, like the grandparent or me, don't want to be employees.
  - Retric 6y ago
    The difference between a contractor and an employee isn’t arbitrarily. Basically, if you’re using company equipment, following the companies schedule, and don’t have a clear task with a clear finishing condition then you’re an employee. Finding someone to fill in for a secretary on maternity leave is fine, but open ended contacts on their equipment and schedule without some specific task is just opening them up to lose another lawsuit.
    - taurath 6y ago
      By that metric almost every contractor I've ever worked with should be an employee. Which I sort of agree with. But you can come up with "well defined project's" when its really "staff-aug".
  - danaris 6y ago
    And it's fine to be a contractor—as long as that's genuinely and meaningfully what you are. If you're contracting out your services to only one company, and they have primary say over when and how you work[1], then that's not a genuine "contractor" relationship; you're an employee that they're taking advantage of by paying less and not providing benefits to. If you really do want to be a contractor, who sells their services to many companies, sets their own hours, and has primary control over their tasks and such, then by all means do so. But please don't try to make things worse for the vast majority who do not want these things by advocating for stripping away protections from people who are being abusively and illegally misclassified as contractors. [1] I don't recall offhand all the various specific aspects of a job that define whether you're logically a contractor or an employee, but I do remember that it's basically "if your livelihood depends entirely on one company paying you, and/or they have near-total control over how you do your work, you're an employee, whatever the paperwork says".
    - ryanschneider 6y ago
      RE: [1] this is somewhat dated but a “contractor” friend used this “twenty factor” list to determine her “employer” was acting questionably maybe ten years ago: https://www.lakeshoreacct.com/blog/what-irs-20-factor-test https://www.lakeshoreacct.com/blog/what-irs-20-factor-test The site says the IRS no longer uses it but it’s still generally a good rule of thumb. And yes I recognize the irony that both her and her employer used the terms contractor and employer when describing their relationship.
- dcolkitt 6y ago
  Employee-status may come with certain benefits, but it also comes with many drawbacks and burdens for the employee. For me, and probably many on this board, the biggest risk is "works-for-hire". Under US law, contractors have strong legal protections of their own intellectual protection. Whereas it's much easier for a W-2 employer to claim IP made in personal time. I don't really care about healthcare of unemployment insurance. I'm well compensated enough that I can buy my own high-deductible insurance and have more than enough assets to feed myself between jobs. Forcing freelancers into W-2 status is just another example of the government screwing people over "for their own good".
  - RHSeeger 6y ago
    > Forcing freelancers into W-2 status is just another example of the government screwing people over "for their own good". It's the government screwing _some_ people over for the good of everyone else, where it's presumed that "good of everyone else" is worth more to society than what is lost by those that get screwed over by it. At least, that's generally the intent.
    - yaml-ops-guy 6y ago
      I’m very glad we’re only screwing over “some” people, good to have that cleared up, thank you for that...it’s still an abominable practice to put any amount of laborers through.
      - threatofrain 6y ago
        Government policy is inherently concerned with those kinds of moral tradeoffs. Vaccines and lockdowns naturally pose such questions.
      - RHSeeger 6y ago
        Are you of the belief that there are a set of policies/laws that result in everyone being happy and nobody being screwed over? Such a thing is not realistic. Every system of laws results in some people suffering for the benefit of others. The better law system result in less suffering for more benefit.
- deleted 6y ago
  [deleted]
ahelwer 6y ago
I also had to engage with this bodyshop arrangement. Heard a fellow contractor referring to it as "paying the pimp", which I guess has some similarities. It's worth noting that you can usually contract directly with a company as long as you maintain scoped part-time contracts with multiple companies, instead of a single open-ended long-term contract with a single company. It's true that independent contractors are somewhat disadvantaged by this whole setup, but we should also recognize that voluntary independent freelance contracting of this type is quite a privileged position and it's good our desired style of work isn't being used to undermine the rights of W-2 employees.
- im_down_w_otp 6y ago
  Isn't it? Isn't that what the "bodyshop" is for? To protect the dynamic the buyer exploited previously, but now with a rent-seeker in the middle? It doesn't seem like the workers on either end are better protected as a result. Honestly asking.
  - ahelwer 6y ago
    You're mostly right, although the way I see it is this: there are a few subclasses of independent contractor. At the top are people with high hourly rates who have niche skillsets and want to work on their own with minimal involvement in the company with which they have a contract. In the middle are the perma-temps involved in the Microsoft lawsuit or at H-1B shops, usually fairly well-paid but lacking many benefits like stock grants. At the bottom are the precarious underclass of people outlined in the article who make close to minimum wage. Then of course you have the gig workers (Uber, Instacart, etc.) who are paid piecemeal. It used to be the people at the top could have their cake & eat it too, where sometimes they'd have long open-ended contracts with a company directly - maintaining independence but also getting a steady paycheck. Now they have to shack up with one of these bodyshops that gets a fat cut of their labor, which disincentivizes the setup. I was certainly glad to get out of it; the whole operation felt shady from start to finish. Politically, this class of people used to be available as cover for the entirety of the contracting workforce. Did lawmakers really want to rob these All-American Mavericks of their Freedom? Anything that further disincentivizes the mock W-2 job route is a good thing IMO. The current situation of course is not sufficient but it's better than the free-for-all it used to be. I guess you could say it has hightened the contradictions. Some might say given the reality of these distinctions within independent contractors, we should segregate protections based on income. I don't think that'll work. Any policy targeted at helping only those of lower means will quickly become a policy to be watered down further and further and further as all the incentives in the system are aligned toward greater exploitation. By including all classes of independent contractor in any legislation, we make it stronger against attacks that would land hardest on the worst off. If that shuts down some avenues of employment for people at the top, well, so be it. I don't think scoped contracts will ever go away. Worth noting this entire thing is to some degree a sideshow of the larger debate about health insurance and how it's tied to employment. If medicare for all were passed, a lot of these issues would just go away.
mc32 6y ago
Indeed. Sometimes "wins" are really losses. This was a terrible outcome for temps in the long run.
adav 6y ago
Very similar to the introduction of IR35 legislation in the UK.
- switch007 6y ago
  And recent clamping down no?
KKKKkkkk1 6y ago
There's a very clear explanation in the article about the reason for this from an employment attorney. It's necessary so that Google can falsely classify these workers as non-employees. Under existing IRS guidelines, a company can't arbitrarily determine which workers are full employees and which are contractors. The business has to be able to prove when a worker meets certain key legal definitions about contract work, and, if they fail, they would be required to treat the contractor as if they were an employee, according to Figari. "One of those guidelines is whether there is a written contract or employment benefits. The other aspect is, is the relationship a continuing one, and is it a key aspect of the business," Figari said. Companies will try to work around this by saying: "If it's cut off at a specific timeline, we were able to get by without them for six months. They are not a key aspect of our business, and [the role] is not a continuing one," she explained.
- kodah 6y ago
  It is federal law that makes them do this, but it's also because they are in fact using contractors for full time work, they're just doing the bare minimum to separate the two.
  - downrightmike 6y ago
    They do it to keep headcount down, this is just abuse. Feds have their rules because of past abuse. This should be added.
- frankbreetz 6y ago
  but why are they no allow to do the same job as a Google employee? Isn't starting as a contractor and being brought on as an fte common practice?
  - PeterisP 6y ago
    They are not allowed to do the same job as a Google employee because Google does not want them to ever become an employee - even though they do need many full time people for that job.
coryking 6y ago
In my time at MSFT there was at least one staffing firm that was founded by a couple contractors who decided to just fuck it and make their own LLC so they didn't have to "pay the pimp" as some put it. If you went through them, you could do so as a 1099. Given their "fuck it" roots, I'm not actually sure how much of a shield they provided between you and Microsoft's Accounts Payable. I bet they paid you every week like most of these staffing firms no matter how fast or slow Microsoft felt like paying its invoices. I'm also pretty sure they provided you with equipment (though how that works if you are also a 1099... I'm not sure). What a lot of people who haven't done true 1099 work don't realize is... people and companies can be incredibly slow paying you. And as a 1099 you are your own collection agency so it's upon you to hassle them into paying you. What I'm saying is... if there is a will there is a way. I bet there is more than a few Microsoft contractors who act like their own agency. It's probably a lot of paperwork, and I have no clue if it is worth it.
- nataz 6y ago
  Oh man, the industry expectation of delayed payment was my largest headache as an independent contractor. When I was first starting out, and still struggling to get a good stable of clients, delayed payment was often something I let slide in negotiations. Better to secure a 100k contract w/ payment 3-6(!) months out than risk losing out to another shop. Even though I was bringing in a lot of income, cash flow was a constant struggle. It took a long time to build up enough billable work to smooth out income curve over time. The worst of it was when I was just transitioning from a single man shop to bringing on additional help. Conversion from independent 1099 to having your own subs, or worse, trying to carry people on overhead is hard. As the owner, you've bought into the idea of lean times, and variable income, but staff expect to be paid every week. Gogo credit cards as short term emergency bridge loans. Ahh, the fun of being a small business owner.
  - infinite8s 6y ago
    The trick for billing big companies (those with a separate accounts payable division) is to incentivize early payment (say with a 5% discount). Most account payable divisions will always try and pay the lowest amount, so they will pay early to receive the discount. Of course you bump up your rate in initial contract negotiations to make up for the discount.
hintymad 6y ago
I remember a contractor sued a startup for which I worked for treating him as a permanent employee yet didn't give her the same benefits, for the startup gave her the same laptop and the same office environment. She won the suit. Consequently, contractors from then on got crappy equipments and office environment from then on.
meanwhile7 6y ago
The skimming is awful. I didn't realize that company was skimming double my pay. I'd have my house paid off if not for that layer.
the_70x 6y ago
https://duckduckgo.com/?q=microsoft+contractors+lawsuit+settle https://duckduckgo.com/?q=microsoft+contractors+lawsuit+sett...
prirun 6y ago
I worked at Ford as a contractor back in the 80's. They regularly hired contractors, usually from India on a green card, through body shops. The body shop could be making $30/hr while the contractor was getting a pittance in exchange for the green card. And because the body shop was sponsoring their green card, the "employee" couldn't switch to another company. Pretty horrible. Instead of going through a body shop, which I refused to do, Ford just required that I was incorporated. This completely lets them off the hook on the contractor vs employee question. Did the same thing with IBM. Forming an LLC is something that at least here in Indiana can be done in a few days by filling out a form online with the state and getting a tax id with the IRS. This allows you (actually, your LLC) to be directly hired at any company without them taking any risk of you being classified as an employee.

by jasode 6y ago

taurath 6y ago

The right thing for the company to do would be to hire people as employees, but it appears that worker protections are too strong for them to want to financially. Universal healthcare/dental/paid leave would allow for companies who’s employees currently are the only receivers of these “benefits” to not require companies to hold onto people so long. Worker protections are supposed to be so that catastrophic job loss is less catastrophic and companies can’t just arbitrarily decide they need 20000 people one month and 0 the next. But we should definitely look into a better deal for the workers and give companies less power over their livelihood.

dannyw 6y ago
Some people, like the grandparent or me, don't want to be employees.
- Retric 6y ago
  The difference between a contractor and an employee isn’t arbitrarily. Basically, if you’re using company equipment, following the companies schedule, and don’t have a clear task with a clear finishing condition then you’re an employee. Finding someone to fill in for a secretary on maternity leave is fine, but open ended contacts on their equipment and schedule without some specific task is just opening them up to lose another lawsuit.
  - taurath 6y ago
    By that metric almost every contractor I've ever worked with should be an employee. Which I sort of agree with. But you can come up with "well defined project's" when its really "staff-aug".
- danaris 6y ago
  And it's fine to be a contractor—as long as that's genuinely and meaningfully what you are. If you're contracting out your services to only one company, and they have primary say over when and how you work[1], then that's not a genuine "contractor" relationship; you're an employee that they're taking advantage of by paying less and not providing benefits to. If you really do want to be a contractor, who sells their services to many companies, sets their own hours, and has primary control over their tasks and such, then by all means do so. But please don't try to make things worse for the vast majority who do not want these things by advocating for stripping away protections from people who are being abusively and illegally misclassified as contractors. [1] I don't recall offhand all the various specific aspects of a job that define whether you're logically a contractor or an employee, but I do remember that it's basically "if your livelihood depends entirely on one company paying you, and/or they have near-total control over how you do your work, you're an employee, whatever the paperwork says".
  - ryanschneider 6y ago
    RE: [1] this is somewhat dated but a “contractor” friend used this “twenty factor” list to determine her “employer” was acting questionably maybe ten years ago: https://www.lakeshoreacct.com/blog/what-irs-20-factor-test https://www.lakeshoreacct.com/blog/what-irs-20-factor-test The site says the IRS no longer uses it but it’s still generally a good rule of thumb. And yes I recognize the irony that both her and her employer used the terms contractor and employer when describing their relationship.
dcolkitt 6y ago
Employee-status may come with certain benefits, but it also comes with many drawbacks and burdens for the employee. For me, and probably many on this board, the biggest risk is "works-for-hire". Under US law, contractors have strong legal protections of their own intellectual protection. Whereas it's much easier for a W-2 employer to claim IP made in personal time. I don't really care about healthcare of unemployment insurance. I'm well compensated enough that I can buy my own high-deductible insurance and have more than enough assets to feed myself between jobs. Forcing freelancers into W-2 status is just another example of the government screwing people over "for their own good".
- RHSeeger 6y ago
  > Forcing freelancers into W-2 status is just another example of the government screwing people over "for their own good". It's the government screwing _some_ people over for the good of everyone else, where it's presumed that "good of everyone else" is worth more to society than what is lost by those that get screwed over by it. At least, that's generally the intent.
  - yaml-ops-guy 6y ago
    I’m very glad we’re only screwing over “some” people, good to have that cleared up, thank you for that...it’s still an abominable practice to put any amount of laborers through.
    - threatofrain 6y ago
      Government policy is inherently concerned with those kinds of moral tradeoffs. Vaccines and lockdowns naturally pose such questions.
    - RHSeeger 6y ago
      Are you of the belief that there are a set of policies/laws that result in everyone being happy and nobody being screwed over? Such a thing is not realistic. Every system of laws results in some people suffering for the benefit of others. The better law system result in less suffering for more benefit.
deleted 6y ago
[deleted]

ahelwer 6y ago

I also had to engage with this bodyshop arrangement. Heard a fellow contractor referring to it as "paying the pimp", which I guess has some similarities. It's worth noting that you can usually contract directly with a company as long as you maintain scoped part-time contracts with multiple companies, instead of a single open-ended long-term contract with a single company. It's true that independent contractors are somewhat disadvantaged by this whole setup, but we should also recognize that voluntary independent freelance contracting of this type is quite a privileged position and it's good our desired style of work isn't being used to undermine the rights of W-2 employees.

im_down_w_otp 6y ago
Isn't it? Isn't that what the "bodyshop" is for? To protect the dynamic the buyer exploited previously, but now with a rent-seeker in the middle? It doesn't seem like the workers on either end are better protected as a result. Honestly asking.
- ahelwer 6y ago
  You're mostly right, although the way I see it is this: there are a few subclasses of independent contractor. At the top are people with high hourly rates who have niche skillsets and want to work on their own with minimal involvement in the company with which they have a contract. In the middle are the perma-temps involved in the Microsoft lawsuit or at H-1B shops, usually fairly well-paid but lacking many benefits like stock grants. At the bottom are the precarious underclass of people outlined in the article who make close to minimum wage. Then of course you have the gig workers (Uber, Instacart, etc.) who are paid piecemeal. It used to be the people at the top could have their cake & eat it too, where sometimes they'd have long open-ended contracts with a company directly - maintaining independence but also getting a steady paycheck. Now they have to shack up with one of these bodyshops that gets a fat cut of their labor, which disincentivizes the setup. I was certainly glad to get out of it; the whole operation felt shady from start to finish. Politically, this class of people used to be available as cover for the entirety of the contracting workforce. Did lawmakers really want to rob these All-American Mavericks of their Freedom? Anything that further disincentivizes the mock W-2 job route is a good thing IMO. The current situation of course is not sufficient but it's better than the free-for-all it used to be. I guess you could say it has hightened the contradictions. Some might say given the reality of these distinctions within independent contractors, we should segregate protections based on income. I don't think that'll work. Any policy targeted at helping only those of lower means will quickly become a policy to be watered down further and further and further as all the incentives in the system are aligned toward greater exploitation. By including all classes of independent contractor in any legislation, we make it stronger against attacks that would land hardest on the worst off. If that shuts down some avenues of employment for people at the top, well, so be it. I don't think scoped contracts will ever go away. Worth noting this entire thing is to some degree a sideshow of the larger debate about health insurance and how it's tied to employment. If medicare for all were passed, a lot of these issues would just go away.

mc32 6y ago

Indeed. Sometimes "wins" are really losses. This was a terrible outcome for temps in the long run.

adav 6y ago

Very similar to the introduction of IR35 legislation in the UK.

switch007 6y ago
And recent clamping down no?

KKKKkkkk1 6y ago

There's a very clear explanation in the article about the reason for this from an employment attorney. It's necessary so that Google can falsely classify these workers as non-employees. Under existing IRS guidelines, a company can't arbitrarily determine which workers are full employees and which are contractors. The business has to be able to prove when a worker meets certain key legal definitions about contract work, and, if they fail, they would be required to treat the contractor as if they were an employee, according to Figari. "One of those guidelines is whether there is a written contract or employment benefits. The other aspect is, is the relationship a continuing one, and is it a key aspect of the business," Figari said. Companies will try to work around this by saying: "If it's cut off at a specific timeline, we were able to get by without them for six months. They are not a key aspect of our business, and [the role] is not a continuing one," she explained.

kodah 6y ago
It is federal law that makes them do this, but it's also because they are in fact using contractors for full time work, they're just doing the bare minimum to separate the two.
- downrightmike 6y ago
  They do it to keep headcount down, this is just abuse. Feds have their rules because of past abuse. This should be added.
frankbreetz 6y ago
but why are they no allow to do the same job as a Google employee? Isn't starting as a contractor and being brought on as an fte common practice?
- PeterisP 6y ago
  They are not allowed to do the same job as a Google employee because Google does not want them to ever become an employee - even though they do need many full time people for that job.

coryking 6y ago

In my time at MSFT there was at least one staffing firm that was founded by a couple contractors who decided to just fuck it and make their own LLC so they didn't have to "pay the pimp" as some put it. If you went through them, you could do so as a 1099. Given their "fuck it" roots, I'm not actually sure how much of a shield they provided between you and Microsoft's Accounts Payable. I bet they paid you every week like most of these staffing firms no matter how fast or slow Microsoft felt like paying its invoices. I'm also pretty sure they provided you with equipment (though how that works if you are also a 1099... I'm not sure). What a lot of people who haven't done true 1099 work don't realize is... people and companies can be incredibly slow paying you. And as a 1099 you are your own collection agency so it's upon you to hassle them into paying you. What I'm saying is... if there is a will there is a way. I bet there is more than a few Microsoft contractors who act like their own agency. It's probably a lot of paperwork, and I have no clue if it is worth it.

nataz 6y ago
Oh man, the industry expectation of delayed payment was my largest headache as an independent contractor. When I was first starting out, and still struggling to get a good stable of clients, delayed payment was often something I let slide in negotiations. Better to secure a 100k contract w/ payment 3-6(!) months out than risk losing out to another shop. Even though I was bringing in a lot of income, cash flow was a constant struggle. It took a long time to build up enough billable work to smooth out income curve over time. The worst of it was when I was just transitioning from a single man shop to bringing on additional help. Conversion from independent 1099 to having your own subs, or worse, trying to carry people on overhead is hard. As the owner, you've bought into the idea of lean times, and variable income, but staff expect to be paid every week. Gogo credit cards as short term emergency bridge loans. Ahh, the fun of being a small business owner.
- infinite8s 6y ago
  The trick for billing big companies (those with a separate accounts payable division) is to incentivize early payment (say with a 5% discount). Most account payable divisions will always try and pay the lowest amount, so they will pay early to receive the discount. Of course you bump up your rate in initial contract negotiations to make up for the discount.

hintymad 6y ago

I remember a contractor sued a startup for which I worked for treating him as a permanent employee yet didn't give her the same benefits, for the startup gave her the same laptop and the same office environment. She won the suit. Consequently, contractors from then on got crappy equipments and office environment from then on.

meanwhile7 6y ago

The skimming is awful. I didn't realize that company was skimming double my pay. I'd have my house paid off if not for that layer.

the_70x 6y ago

https://duckduckgo.com/?q=microsoft+contractors+lawsuit+settle https://duckduckgo.com/?q=microsoft+contractors+lawsuit+sett...

prirun 6y ago

I worked at Ford as a contractor back in the 80's. They regularly hired contractors, usually from India on a green card, through body shops. The body shop could be making $30/hr while the contractor was getting a pittance in exchange for the green card. And because the body shop was sponsoring their green card, the "employee" couldn't switch to another company. Pretty horrible. Instead of going through a body shop, which I refused to do, Ford just required that I was incorporated. This completely lets them off the hook on the contractor vs employee question. Did the same thing with IBM. Forming an LLC is something that at least here in Indiana can be done in a few days by filling out a form online with the state and getting a tax id with the IRS. This allows you (actually, your LLC) to be directly hired at any company without them taking any risk of you being classified as an employee.