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"The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what wi

by a-dub 4y ago

"The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done." independent contractors are free to sub out work. this is the law. they also probably should not be on your slack unless you're considering the whole thing a consulting arrangement. i understand where you're coming from, especially in trying to make use of upwork in some actually useful way for your business. but you should also be aware of the law. https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined https://www.irs.gov/businesses/small-businesses-self-employe...

jackconsidine 4y ago
Yeah I get this and it doesn't apply here. The payer in this case did not have the right to control only the result of the work which is the crux of the situation. The law, nor the linked resource, stipulates that any 1099 relationship can be subcontracted out by anyone, let alone without disclosure. If that were the case the explicit option to hire onshore vs offshore on sites like Upwork would be meaningless, or a matter of arbitrage.
- arcticbull 4y ago
  Not having the right to control only the result makes them an employee which in turn makes them eligible for benefits and so on. This is the specific difference between a contractor and an employee. The problem is that you can't just have what are effectively employees but on a contract basis under law. It opens you up to liabilities, as Uber has been experiencing. The closest I think you could get is actually contracting a PEO that takes the individual under employee status and assigns them specifically to your company under contract. Being an employee of the PEO means that they can in fact control these aspects of the job, and you aren't contracting them, you are contracting the PEO who subs out to them.
  - cma 4y ago
    It seems intuitively like you can't just ghost in someone who didnt even sign the copyright assignment stuff with the right party, ndas, or undergo a possible background check.
    - a-dub 4y ago
      there's a whole industry that does this. they're called agencies. taking responsibility for quality and ensuring no subs or staff do anything sketchy is expensive and hard, as such they typically add a 100% cut to what gets billed out to the client.
      - cma 4y ago
        They don't secretly ghost them in, and they do get them to sign over copyrights etc.
  - PragmaticPulp 4y ago
    > Not having the right to control only the result makes them an employee which in turn makes them eligible for benefits and so on. This is the specific difference between a contractor and an employee. This isn't actually even the root issue. The contractor almost certainly violated their contract by sharing NDA-covered materials with an unauthorized third party. The contractor also shared access credentials to the company's systems with someone else and then facilitated fraudulent interactions wherein one person claimed to be someone else. Being a contractor doesn't give someone carte blanche authority to do whatever they want with the company's materials (codebase, design documents) and secured systems.
koolba 4y ago
> independent contractors are free to sub out work. this is the law. I’ve never seen a contracting agreement that didn’t specifically prohibit subcontracting without the explicit written consent of the client. It’s not that it wouldn’t be federally legal, it’s that it would violate the specific contract with the client.
- arcticbull 4y ago
  You can put anything you want in a contract, the question is, is it enforceable?
  - koolba 4y ago
    There isn’t a jurisdiction on the planet that would reject a contract clause that the person hired to do a job cannot covertly outsource the work by providing their credentials to a third party. That’d likely be breaking multiple clauses of any sane contracting agreement.
    - deleted 4y ago
      [deleted]
    - a-dub 4y ago
      here's upwork's suggested contract: 3. RESPONSIBILITY FOR EMPLOYEES AND SUBCONTRACTORS, INCLUDING AGENCY MEMBERS If a User subcontracts with or employs third parties to perform Freelancer Services on behalf of the User for any Engagement, the User represents and warrants that it does so as a legally recognized entity or person and in compliance with all applicable laws and regulations. Further, at all times a User that agreed to perform services under a Services Contract remains responsible for the quality of the services and represents and warrants that User has entered into agreements with any such employees and subcontractors on confidentiality and intellectual property at least as strong as those in these Optional Service Terms. it's a business to business agreement. a contractor is free to sub. https://www.upwork.com/legal#optional-service-contract-terms https://www.upwork.com/legal#optional-service-contract-terms
deepfriedbits 4y ago
Correct. This is the law in the United States. But would it apply to someone working outside of the United States?
karaterobot 4y ago
The original commenter didn't say what happened as a result, just that he caught the contractor subbing out work. If it were me, I would not renew a contract with someone who sub-contracted work out to someone I don't know and didn't approve without informing me. Whether it is or not, it certainly seems shady, and I don't want to work with people who have violated my trust. When I was a contractor, our clients usually had a number of clauses in the contract that would have allowed them to end the engagement early for pulling something like that. And, of course, in the end they could always just have said "go to hell, we're not working with you anymore," and it would come down to who wants to go to court the least.
- PragmaticPulp 4y ago
  > When I was a contractor, our clients usually had a number of clauses in the contract that would have allowed them to end the engagement early for pulling something like that. At minimum, any NDA would have been violated by sharing the company's code and/or access with a third party. Being a contractor doesn't give someone carte blanche authority to pull random people into confidential work. Any reasonable contracting agreement will make it clear that the materials are not to be shared with anyone outside of the contract.
PragmaticPulp 4y ago
> independent contractors are free to sub out work. this is the law. Practically speaking, there is no way a software contractor can sub out work without violating a litany of contractual obligations in the contracting agreement. Even minimalistic contracting boilerplate agreements will have clauses that cover these situations. For example, if you sign an NDA with a company covering the work and then turn around and send the codebase to a contractor in Romania to work on it, you've very clearly violated the terms of the NDA. So no, the law doesn't automatically allow engineering contractors to do whatever they want with the work.
- NesiG93vXQiSM8j 4y ago
  > For example, if you sign an NDA with a company covering the work and then turn around and send the codebase to a contractor in Romania to work on it, you've very clearly violated the terms of the NDA. I find that unlikely. What if you were instead handing it to an employee? (Also, different NDAs are... different, it's pretty tough to talk about them all in general and expect a statement to be true.) > So no, the law doesn't automatically allow engineering contractors to do whatever they want with the work. Yes, it does. Just because you might have terms in a contract prohibiting it doesn't mean the law prohibits it.
  - PragmaticPulp 4y ago
    > I find that unlikely. What if you were instead handing it to an employee? > (Also, different NDAs are... different, it's pretty tough to talk about them all in general and expect a statement to be true.) If you sign a contract that says you're not going to share the company's code and then you share the company's code, you've violated the NDA. It's as simple as that. Being a contractor doesn't grant someone magical immunity to the contracts they've signed. At most, the employee could argue that the contract made them a full-time employee and sue for benefits and such. They can't, however, simply ignore contractual obligations that they've agreed to.
    - trasz 4y ago
      Contractual obligations that go against the law are void. And it means that indeed, you are supposed to just ignore them.
selfmodruntime 4y ago
The legality of it does not really matter here. If I'm paying top dollar to someone in the US I expect them to actually do the work themselves.

by a-dub 4y ago

jackconsidine 4y ago

Yeah I get this and it doesn't apply here. The payer in this case did not have the right to control only the result of the work which is the crux of the situation. The law, nor the linked resource, stipulates that any 1099 relationship can be subcontracted out by anyone, let alone without disclosure. If that were the case the explicit option to hire onshore vs offshore on sites like Upwork would be meaningless, or a matter of arbitrage.

arcticbull 4y ago
Not having the right to control only the result makes them an employee which in turn makes them eligible for benefits and so on. This is the specific difference between a contractor and an employee. The problem is that you can't just have what are effectively employees but on a contract basis under law. It opens you up to liabilities, as Uber has been experiencing. The closest I think you could get is actually contracting a PEO that takes the individual under employee status and assigns them specifically to your company under contract. Being an employee of the PEO means that they can in fact control these aspects of the job, and you aren't contracting them, you are contracting the PEO who subs out to them.
- cma 4y ago
  It seems intuitively like you can't just ghost in someone who didnt even sign the copyright assignment stuff with the right party, ndas, or undergo a possible background check.
  - a-dub 4y ago
    there's a whole industry that does this. they're called agencies. taking responsibility for quality and ensuring no subs or staff do anything sketchy is expensive and hard, as such they typically add a 100% cut to what gets billed out to the client.
    - cma 4y ago
      They don't secretly ghost them in, and they do get them to sign over copyrights etc.
- PragmaticPulp 4y ago
  > Not having the right to control only the result makes them an employee which in turn makes them eligible for benefits and so on. This is the specific difference between a contractor and an employee. This isn't actually even the root issue. The contractor almost certainly violated their contract by sharing NDA-covered materials with an unauthorized third party. The contractor also shared access credentials to the company's systems with someone else and then facilitated fraudulent interactions wherein one person claimed to be someone else. Being a contractor doesn't give someone carte blanche authority to do whatever they want with the company's materials (codebase, design documents) and secured systems.

koolba 4y ago

> independent contractors are free to sub out work. this is the law. I’ve never seen a contracting agreement that didn’t specifically prohibit subcontracting without the explicit written consent of the client. It’s not that it wouldn’t be federally legal, it’s that it would violate the specific contract with the client.

arcticbull 4y ago
You can put anything you want in a contract, the question is, is it enforceable?
- koolba 4y ago
  There isn’t a jurisdiction on the planet that would reject a contract clause that the person hired to do a job cannot covertly outsource the work by providing their credentials to a third party. That’d likely be breaking multiple clauses of any sane contracting agreement.
  - deleted 4y ago
    [deleted]
  - a-dub 4y ago
    here's upwork's suggested contract: 3. RESPONSIBILITY FOR EMPLOYEES AND SUBCONTRACTORS, INCLUDING AGENCY MEMBERS If a User subcontracts with or employs third parties to perform Freelancer Services on behalf of the User for any Engagement, the User represents and warrants that it does so as a legally recognized entity or person and in compliance with all applicable laws and regulations. Further, at all times a User that agreed to perform services under a Services Contract remains responsible for the quality of the services and represents and warrants that User has entered into agreements with any such employees and subcontractors on confidentiality and intellectual property at least as strong as those in these Optional Service Terms. it's a business to business agreement. a contractor is free to sub. https://www.upwork.com/legal#optional-service-contract-terms https://www.upwork.com/legal#optional-service-contract-terms

deepfriedbits 4y ago

Correct. This is the law in the United States. But would it apply to someone working outside of the United States?

karaterobot 4y ago

The original commenter didn't say what happened as a result, just that he caught the contractor subbing out work. If it were me, I would not renew a contract with someone who sub-contracted work out to someone I don't know and didn't approve without informing me. Whether it is or not, it certainly seems shady, and I don't want to work with people who have violated my trust. When I was a contractor, our clients usually had a number of clauses in the contract that would have allowed them to end the engagement early for pulling something like that. And, of course, in the end they could always just have said "go to hell, we're not working with you anymore," and it would come down to who wants to go to court the least.

PragmaticPulp 4y ago
> When I was a contractor, our clients usually had a number of clauses in the contract that would have allowed them to end the engagement early for pulling something like that. At minimum, any NDA would have been violated by sharing the company's code and/or access with a third party. Being a contractor doesn't give someone carte blanche authority to pull random people into confidential work. Any reasonable contracting agreement will make it clear that the materials are not to be shared with anyone outside of the contract.

PragmaticPulp 4y ago

> independent contractors are free to sub out work. this is the law. Practically speaking, there is no way a software contractor can sub out work without violating a litany of contractual obligations in the contracting agreement. Even minimalistic contracting boilerplate agreements will have clauses that cover these situations. For example, if you sign an NDA with a company covering the work and then turn around and send the codebase to a contractor in Romania to work on it, you've very clearly violated the terms of the NDA. So no, the law doesn't automatically allow engineering contractors to do whatever they want with the work.

NesiG93vXQiSM8j 4y ago
> For example, if you sign an NDA with a company covering the work and then turn around and send the codebase to a contractor in Romania to work on it, you've very clearly violated the terms of the NDA. I find that unlikely. What if you were instead handing it to an employee? (Also, different NDAs are... different, it's pretty tough to talk about them all in general and expect a statement to be true.) > So no, the law doesn't automatically allow engineering contractors to do whatever they want with the work. Yes, it does. Just because you might have terms in a contract prohibiting it doesn't mean the law prohibits it.
- PragmaticPulp 4y ago
  > I find that unlikely. What if you were instead handing it to an employee? > (Also, different NDAs are... different, it's pretty tough to talk about them all in general and expect a statement to be true.) If you sign a contract that says you're not going to share the company's code and then you share the company's code, you've violated the NDA. It's as simple as that. Being a contractor doesn't grant someone magical immunity to the contracts they've signed. At most, the employee could argue that the contract made them a full-time employee and sue for benefits and such. They can't, however, simply ignore contractual obligations that they've agreed to.
  - trasz 4y ago
    Contractual obligations that go against the law are void. And it means that indeed, you are supposed to just ignore them.

selfmodruntime 4y ago

The legality of it does not really matter here. If I'm paying top dollar to someone in the US I expect them to actually do the work themselves.