4 ms·

What is the point of laws like this? They are way too specific. Instead the Minneapolis City Council should come out with legislation prohibiting the re-definit

What is the point of laws like this? They are way too specific. Instead the Minneapolis City Council should come out with legislation prohibiting the re-definition of what a contractor is. Uber and Lyft claim that their drivers are contractors, but then also don't allow their drivers to set rates themselves. It's an absolute tragedy that governments just let companies get away with "disruption" when its really just flaunting established laws and regulations. The IRS is clear on what the definition[0] of an independent contractor is. Uber and Lyft drivers do not meet the definition because of the constraints imposed upon them by said companies. [0]: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined https://www.irs.gov/businesses/small-businesses-self-employe...

db48x 3y ago
It's not actually that clear cut. There are at least a dozen factors that speak to the differences between an employee and a contractor, and setting your own rates or prices is only one of them. In general, you don't need to have all of these different factors before you are deemed a contractor, you only need several of them. And one of those factors is whether you bring significant equipment of your own to do the job, or if you use your employer’s equipment. Ride–share drivers drive their own personal car, which is a big step towards being a contractor. They also choose which jobs to accept, and what hours to work. Compare that with a Chef. The Chef at a restaurant decides on the menu, buys (or at least orders) the food, and cooks it to their own specifications. All of pushes them towards contractor. But they do all of that in their employer’s kitchen, using equipment provided by the employer. Therefore the IRS generally decides that chefs are employees.
- swores 3y ago
  Most chefs don't get to set their own pay rates, nor hours. If a restaurant gave a chef a contract of "come in and help our kitchen team whenever you like, but up to you how often you do" would using the employer's equipment matter? The things you said (choosing what food to buy etc) just means their boss (ie maybe the owner of the place) has made choosing food part of their job requirement. I can't imagine how being given more responsibility like that is in any way related to contractor or not, as long as the chef's job requires them to provide food to paying customers.
  - db48x 3y ago
    One of the things that the IRS looks at is who makes the decisions. If your boss decides what you work on, how you do the work, when you do the work, and where you do the work, then you are probably an employee (but there are other factors to consider as well). However, the more of those that you choose for yourself then the more likely it is that you are actually a contractor. So there are some factors in favor of the chef being a contractor. However, you are right; it is very rare for a chef to actually be a contractor. That’s because these factors are usually outweighed by others. In particular, the chef works in a kitchen owned by their employer, and they can really only be the chef of one restaurant at a time. But this is the point of the example: both the chef and the ride–share driver make similar decisions for themselves. They both decide for themselves how to accomplish the goal given to them by their employer. But unlike the chef, the ride–share driver also provides their own car. That’s a huge financial commitment that the driver makes and brings to the arrangement. Plus, they can easily work for more than one service at a time. Sure, they can only have one passenger at a time, but they can sign in to multiple services at the same time and pick and choose between jobs offered by all of them. So while a chef is rarely going to be a contractor, a ride–share driver probably is. They have many more factors in favor of them being a contractor than the chef has.
gruez 3y ago
>Uber and Lyft claim that their drivers are contractors, but then also don't allow their drivers to set rates themselves. Your own linked document says nothing about contractors being required to set their own rate. Other IRS documents[1] also does not mention being able to set your own rate as a factor. [1] https://www.irs.gov/businesses/small-businesses-self-employed/financial-control https://www.irs.gov/businesses/small-businesses-self-employe... >The IRS is clear on what the definition[0] of an independent contractor is. Uber and Lyft drivers do not meet the definition because of the constraints imposed upon them by said companies. The linked document doesn't say much aside from "You are not an independent contractor if you perform services that can be controlled by an employer", which isn't exactly "clear".
- everforward 3y ago
  > Your own linked document says nothing about contractors being required to set their own rate. Other IRS documents[1] also does not mention being able to set your own rate as a factor. Probably because everyone sets their own rates by agreeing to work; it's not a real differentiator. What does them setting their own rates mean here? They're contracted by Uber, so the "rate" here is what Uber pays them, not what the customer pays Uber. They're already more than free to demand that Uber pay them more and quit if they don't, same as any other contractor under the sun. The only time someone isn't setting their own rates is slave labor, which is already incredibly illegal.
donatj 3y ago
You set your own hours or even if you work at all. Don’t feel like working? You just don’t. Don’t have to tell anyone or get permission and no one gets mad. I have multiple friends who drive for Uber/Lyft, and it’s their second side gig they do when they have a couple extra hours and want some extra money. Even if it’s not perfectly an independent contractor, from a practical standpoint it sure doesn’t smell like traditional employment at all. Imagining the Venn Diagram of features, it seems a lot closer to contactor.
amluto 3y ago
I think that this entire debate is skewed based in rather broken concepts of benefits. In the ways that ought to matter, rideshare drivers seem like contractors: They set their own hours; overtime pay would odd, but perhaps too many hours should be banned on safety grounds. They bring their own equipment. They owe no particular allegiance to an “employer” like Uber or Lyft (and can work for more than one of them at once!). Even family leave would be somewhat odd, at least in the way that family leave works in the US. But, in the US, this results is a problem: they are low-paid contractors, and contractors don’t get certain critical employment benefits (automatically tax-deductible health care at group rates is the big one), and the result is extremely problematic. Perhaps a much better solution would be to let drivers be contractors but to fix the benefit situation. Insurance should not be tied to employment! I, as as independent contractor, should be able (or required) to purchase (or have provided to me by the state) insurance under identical terms to those that employees benefit from. In fact, changing jobs or taking a break from work should have no effect on my insurance plan or the taxation thereof! Contractors should be eligible for Medicare and Social Security just like employees. And perhaps family leave should even be a state benefit: after all, the presence of children benefits society and the state (future labor and tax revenue, not to mention that children are nice to have around), and this benefit does not depend on whether the parents are employees, college students, low-paid contractors or high-paid contractors. With all of that fixed, allowing people to put miles on their car to provide a useful service for not-amazing contractor pay doesn’t actually seem so bad to me.
- scott00 3y ago
  Contractors pay self employment taxes in lieu of the social security and Medicare payroll tax, and as a result are eligible for both. The health insurance situation is not great, but it's available through Obamacare. In my experience the actual cost is not much worse than employer provided, but the true cost is often subsidized, so employees don't always realize how much salary they are giving up for health insurance. No eligibility for unemployment or workers comp though.

db48x 3y ago

It's not actually that clear cut. There are at least a dozen factors that speak to the differences between an employee and a contractor, and setting your own rates or prices is only one of them. In general, you don't need to have all of these different factors before you are deemed a contractor, you only need several of them. And one of those factors is whether you bring significant equipment of your own to do the job, or if you use your employer’s equipment. Ride–share drivers drive their own personal car, which is a big step towards being a contractor. They also choose which jobs to accept, and what hours to work. Compare that with a Chef. The Chef at a restaurant decides on the menu, buys (or at least orders) the food, and cooks it to their own specifications. All of pushes them towards contractor. But they do all of that in their employer’s kitchen, using equipment provided by the employer. Therefore the IRS generally decides that chefs are employees.

swores 3y ago
Most chefs don't get to set their own pay rates, nor hours. If a restaurant gave a chef a contract of "come in and help our kitchen team whenever you like, but up to you how often you do" would using the employer's equipment matter? The things you said (choosing what food to buy etc) just means their boss (ie maybe the owner of the place) has made choosing food part of their job requirement. I can't imagine how being given more responsibility like that is in any way related to contractor or not, as long as the chef's job requires them to provide food to paying customers.
- db48x 3y ago
  One of the things that the IRS looks at is who makes the decisions. If your boss decides what you work on, how you do the work, when you do the work, and where you do the work, then you are probably an employee (but there are other factors to consider as well). However, the more of those that you choose for yourself then the more likely it is that you are actually a contractor. So there are some factors in favor of the chef being a contractor. However, you are right; it is very rare for a chef to actually be a contractor. That’s because these factors are usually outweighed by others. In particular, the chef works in a kitchen owned by their employer, and they can really only be the chef of one restaurant at a time. But this is the point of the example: both the chef and the ride–share driver make similar decisions for themselves. They both decide for themselves how to accomplish the goal given to them by their employer. But unlike the chef, the ride–share driver also provides their own car. That’s a huge financial commitment that the driver makes and brings to the arrangement. Plus, they can easily work for more than one service at a time. Sure, they can only have one passenger at a time, but they can sign in to multiple services at the same time and pick and choose between jobs offered by all of them. So while a chef is rarely going to be a contractor, a ride–share driver probably is. They have many more factors in favor of them being a contractor than the chef has.

gruez 3y ago

>Uber and Lyft claim that their drivers are contractors, but then also don't allow their drivers to set rates themselves. Your own linked document says nothing about contractors being required to set their own rate. Other IRS documents[1] also does not mention being able to set your own rate as a factor. [1] https://www.irs.gov/businesses/small-businesses-self-employed/financial-control https://www.irs.gov/businesses/small-businesses-self-employe... >The IRS is clear on what the definition[0] of an independent contractor is. Uber and Lyft drivers do not meet the definition because of the constraints imposed upon them by said companies. The linked document doesn't say much aside from "You are not an independent contractor if you perform services that can be controlled by an employer", which isn't exactly "clear".

everforward 3y ago
> Your own linked document says nothing about contractors being required to set their own rate. Other IRS documents[1] also does not mention being able to set your own rate as a factor. Probably because everyone sets their own rates by agreeing to work; it's not a real differentiator. What does them setting their own rates mean here? They're contracted by Uber, so the "rate" here is what Uber pays them, not what the customer pays Uber. They're already more than free to demand that Uber pay them more and quit if they don't, same as any other contractor under the sun. The only time someone isn't setting their own rates is slave labor, which is already incredibly illegal.

donatj 3y ago

You set your own hours or even if you work at all. Don’t feel like working? You just don’t. Don’t have to tell anyone or get permission and no one gets mad. I have multiple friends who drive for Uber/Lyft, and it’s their second side gig they do when they have a couple extra hours and want some extra money. Even if it’s not perfectly an independent contractor, from a practical standpoint it sure doesn’t smell like traditional employment at all. Imagining the Venn Diagram of features, it seems a lot closer to contactor.

amluto 3y ago

I think that this entire debate is skewed based in rather broken concepts of benefits. In the ways that ought to matter, rideshare drivers seem like contractors: They set their own hours; overtime pay would odd, but perhaps too many hours should be banned on safety grounds. They bring their own equipment. They owe no particular allegiance to an “employer” like Uber or Lyft (and can work for more than one of them at once!). Even family leave would be somewhat odd, at least in the way that family leave works in the US. But, in the US, this results is a problem: they are low-paid contractors, and contractors don’t get certain critical employment benefits (automatically tax-deductible health care at group rates is the big one), and the result is extremely problematic. Perhaps a much better solution would be to let drivers be contractors but to fix the benefit situation. Insurance should not be tied to employment! I, as as independent contractor, should be able (or required) to purchase (or have provided to me by the state) insurance under identical terms to those that employees benefit from. In fact, changing jobs or taking a break from work should have no effect on my insurance plan or the taxation thereof! Contractors should be eligible for Medicare and Social Security just like employees. And perhaps family leave should even be a state benefit: after all, the presence of children benefits society and the state (future labor and tax revenue, not to mention that children are nice to have around), and this benefit does not depend on whether the parents are employees, college students, low-paid contractors or high-paid contractors. With all of that fixed, allowing people to put miles on their car to provide a useful service for not-amazing contractor pay doesn’t actually seem so bad to me.

scott00 3y ago
Contractors pay self employment taxes in lieu of the social security and Medicare payroll tax, and as a result are eligible for both. The health insurance situation is not great, but it's available through Obamacare. In my experience the actual cost is not much worse than employer provided, but the true cost is often subsidized, so employees don't always realize how much salary they are giving up for health insurance. No eligibility for unemployment or workers comp though.