4 ms·

Wouldn't it also be a tax thing? Here in the Netherlands we have tax laws to prevent this kind of things, where if you can't choose your own hours/days/work and

Wouldn't it also be a tax thing? Here in the Netherlands we have tax laws to prevent this kind of things, where if you can't choose your own hours/days/work and are essentially employed, but pretend to be a contractor, for all tax purposes the company is your employer, even in hindsight. Makes hiring people as contractors pretty tricky for startups sometimes.

typicalrunt 15y ago
We have a saying here used by the IRS and CRA (Canadian-equivalent) for determining if contractors are employees, that if it walks like a duck, and talks like a duck, then it is a duck. Basically, a contractor (by the nature of its name) is supposed to be hired for a fixed-length period of time. I would guess that's what the tax laws are trying to enforce.
- jrockway 15y ago
  All the government cares about, though, is that they are W2 and not 1099. Then there are no rules. The IRS just wants to make sure that a big entity is responsible for payroll taxes instead of some individual. That way, it's cheaper to collect if there is a problem. (Where I work, all contractors come in through third-party companies that pay the employees as W2s. They limit being a contractor to 18 months because then people can start suing to get benefits, like an invite to the Christmas party and healthcare. Or so I've been told.)
- joelhaasnoot 15y ago
  Right, but it gets trickier than that because even though you give someone a fixed-length period, if you're the only job a contractor does, and you pick the days they work, here you are essentially becoming the employer. Don't know what the US employment taxes are, but it was prohibitively expensive for us as a startup. The total employee costs run about 1.4-1.6x net base salary, even if we would outsource through a temp/payrolling agency.

4 ms·

Wouldn't it also be a tax thing? Here in the Netherlands we have tax laws to prevent this kind of things, where if you can't choose your own hours/days/work and

by joelhaasnoot 15y ago

typicalrunt 15y ago
We have a saying here used by the IRS and CRA (Canadian-equivalent) for determining if contractors are employees, that if it walks like a duck, and talks like a duck, then it is a duck. Basically, a contractor (by the nature of its name) is supposed to be hired for a fixed-length period of time. I would guess that's what the tax laws are trying to enforce.
- jrockway 15y ago
  All the government cares about, though, is that they are W2 and not 1099. Then there are no rules. The IRS just wants to make sure that a big entity is responsible for payroll taxes instead of some individual. That way, it's cheaper to collect if there is a problem. (Where I work, all contractors come in through third-party companies that pay the employees as W2s. They limit being a contractor to 18 months because then people can start suing to get benefits, like an invite to the Christmas party and healthcare. Or so I've been told.)
- joelhaasnoot 15y ago
  Right, but it gets trickier than that because even though you give someone a fixed-length period, if you're the only job a contractor does, and you pick the days they work, here you are essentially becoming the employer. Don't know what the US employment taxes are, but it was prohibitively expensive for us as a startup. The total employee costs run about 1.4-1.6x net base salary, even if we would outsource through a temp/payrolling agency.