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>>This worries me. I am a one-man shop, and I do not want to be classified as an employee. You are one out of almost 24 million nonemployer businesses[1] that

>>This worries me. I am a one-man shop, and I do not want to be classified as an employee. You are one out of almost 24 million nonemployer businesses[1] that will be affected by this proposed rule, or around 15% of the entire US labour force[2]. Will be interesting to see what type of response elected representatives will receive once the effects of the rule start being felt. [1] https://www.jpmorganchase.com/institute/research/small-business/small-business-dashboard/economic-activity https://www.jpmorganchase.com/institute/research/small-busin... [2] https://www.bls.gov/news.release/empsit.t01.htm https://www.bls.gov/news.release/empsit.t01.htm

thrtythreeforty 3y ago
What are the potential impacts on self-employed people, for someone who is almost completely out of the loop?
- Exoristos 3y ago
  Expense and paperwork. In my experience, you'll be barraged with paperwork that doesn't really apply, but failing to process it results in penalties.
- otoburb 3y ago
  I think the most worrying one is that clients of independent contractors (which I know is an incredibly broad term and conditions, leverage and respect vary across and within industries) may be less willing to hire ICs if they're might be forced to treat them as full-time equivalent employees (benefits). If true, then this could lead to reduced business for ICs, which in turn requires more time spent on business development and less time on billable engagements to maintain similar revenue levels going forward. On the other hand, if you're, say, a trucker that would for all intents and purposes normally be considered an employee of a company because so much of their livelihood, hours and method of work depends on a single employer, then their situation (and total compensation) would likely improve.
- hobotime 3y ago
  Instead of hiring American independent contractors, more remote independent contractors will be hired. Work from home taught companies that many jobs can be outsourced.
  - otoburb 3y ago
    But not offshore software developers, unless companies are willing to amortize those salaries over 15 years, or Section 174 is modified.
    - pcthrowaway 3y ago
      Does the 15-year amortization period really apply if working with a remote contractor via a U.S.-based employer of record (such as remote.com)? The "research" is being performed remotely, but you're just paying for the service of a U.S. company. It would be similar to paying a U.S.-based consulting shop, who may or may not use off-shore labor; I'm actually not sure if the service you're paying for falls under section 174 in either situation, but I'd be surprised if businesses are required to look into the R&D supply chains of their service providers
      - otoburb 3y ago
        >>I'd be surprised if businesses are required to look into the R&D supply chains of their service providers Agreed, this seems overly onerous, but now you're having to pay an(other) intermediary margin instead of hiring the remote contractor yourself, and possibly even at slightly higher rates because now the U.S.-based consulting shop has to deal with the 15 year amortization of their use of off-shore labour.
        nerdawson 3y ago
        I worked through Remote.com for quite a while, including after this rule came into effect. I'd be amazed if that's how it worked for them in practice. I can't see how it could be a viable business for them if they had to amortize the cost over 15 years. Their margin would be a tiny fraction of the revenue deemed taxable meaning every employee would put them in a worse cashflow situation. It's not like they could borrow to cover the 15yr span either.
PH95VuimJjqBqy 3y ago
these precedents have been in place for years, this is just covering "gig workers" with the same protections contractors have had for a very long time. For everyone else, this person is just spreading FUD. I think it was in the early aughts when these tests first started to go into effect because companies would have 95%+ of their workforce be contractors as a means to avoid taxes but would treat them like employees (setting their hours, etc). It turns out the government doesn't like it when you try to avoid paying taxes, so these tests went into effect. This is just an extension of that to cover gig workers and the largest point of contention is going to be whether or not these gig workers can _regularly_ turn down work without being "fired". tech companies here are trapped between a rock and a hard place. Either they're working with contractors who can turn down work without negative repercussions and risk not serving customers or they admit these workers don't actually have a choice because they need to serve customers in a timely fashion.
- gavinhoward 3y ago
  OP here. I get where you're coming from, but I think you're too harsh on me. I don't know what the impact will be on my business, and I specifically said that it is a worry, not a certainty. I am not trying to spread FUD.

thrtythreeforty 3y ago

What are the potential impacts on self-employed people, for someone who is almost completely out of the loop?

Exoristos 3y ago
Expense and paperwork. In my experience, you'll be barraged with paperwork that doesn't really apply, but failing to process it results in penalties.
otoburb 3y ago
I think the most worrying one is that clients of independent contractors (which I know is an incredibly broad term and conditions, leverage and respect vary across and within industries) may be less willing to hire ICs if they're might be forced to treat them as full-time equivalent employees (benefits). If true, then this could lead to reduced business for ICs, which in turn requires more time spent on business development and less time on billable engagements to maintain similar revenue levels going forward. On the other hand, if you're, say, a trucker that would for all intents and purposes normally be considered an employee of a company because so much of their livelihood, hours and method of work depends on a single employer, then their situation (and total compensation) would likely improve.
hobotime 3y ago
Instead of hiring American independent contractors, more remote independent contractors will be hired. Work from home taught companies that many jobs can be outsourced.
- otoburb 3y ago
  But not offshore software developers, unless companies are willing to amortize those salaries over 15 years, or Section 174 is modified.
  - pcthrowaway 3y ago
    Does the 15-year amortization period really apply if working with a remote contractor via a U.S.-based employer of record (such as remote.com)? The "research" is being performed remotely, but you're just paying for the service of a U.S. company. It would be similar to paying a U.S.-based consulting shop, who may or may not use off-shore labor; I'm actually not sure if the service you're paying for falls under section 174 in either situation, but I'd be surprised if businesses are required to look into the R&D supply chains of their service providers
    - otoburb 3y ago
      >>I'd be surprised if businesses are required to look into the R&D supply chains of their service providers Agreed, this seems overly onerous, but now you're having to pay an(other) intermediary margin instead of hiring the remote contractor yourself, and possibly even at slightly higher rates because now the U.S.-based consulting shop has to deal with the 15 year amortization of their use of off-shore labour.
      - nerdawson 3y ago
        I worked through Remote.com for quite a while, including after this rule came into effect. I'd be amazed if that's how it worked for them in practice. I can't see how it could be a viable business for them if they had to amortize the cost over 15 years. Their margin would be a tiny fraction of the revenue deemed taxable meaning every employee would put them in a worse cashflow situation. It's not like they could borrow to cover the 15yr span either.

PH95VuimJjqBqy 3y ago

these precedents have been in place for years, this is just covering "gig workers" with the same protections contractors have had for a very long time. For everyone else, this person is just spreading FUD. I think it was in the early aughts when these tests first started to go into effect because companies would have 95%+ of their workforce be contractors as a means to avoid taxes but would treat them like employees (setting their hours, etc). It turns out the government doesn't like it when you try to avoid paying taxes, so these tests went into effect. This is just an extension of that to cover gig workers and the largest point of contention is going to be whether or not these gig workers can _regularly_ turn down work without being "fired". tech companies here are trapped between a rock and a hard place. Either they're working with contractors who can turn down work without negative repercussions and risk not serving customers or they admit these workers don't actually have a choice because they need to serve customers in a timely fashion.

gavinhoward 3y ago
OP here. I get where you're coming from, but I think you're too harsh on me. I don't know what the impact will be on my business, and I specifically said that it is a worry, not a certainty. I am not trying to spread FUD.