Labor Dept. Says Workers at a Gig Company Are Contractors

[Eugene]

Source: New York Times

The Labor Department weighed in Monday on a question whose answer could be worth billions of dollars to gig-economy companies, deciding that one company’s workers were contractors, not employees.

As a result, the unidentified company — whose workers, it appears, clean residences — will not have to offer the federal minimum wage or overtime, or pay a share of Social Security taxes. And while the decision officially applies only to that company, legal experts said it was likely to affect a much larger portion of the industry.

The move signals the Trump administration’s approach to the way gig companies, a growing share of the economy, must treat their work force. As companies like Uber and Lyft begin to sell shares to the public, industry officials estimate that requiring them to classify their workers as employees would raise their labor costs by 20 to 30 percent.

“Today, the U.S. Department of Labor offers further insight into the nexus of current labor law and innovations in the job market,” Keith Sonderling, an official in the division that oversees such issues, said in a statement. It is a longstanding policy for the department not to disclose the names of companies receiving such letters.

-snip-

By Noam Scheiber
April 29, 2019


Read more: https://www.nytimes.com/2019/04/29/business/economy/gig-economy-workers-contractors.html

[Merlot]

1. There is no upside to this.

[mr_lebowski]

2. That sounds ... kinda shitty ... BTW since when does calling people 'contractors'

mean that you can get away with not paying them minimum wage?

[Dan]

4. Actually what is worse (if possible)

Is not paying into Social Security for these workers; One could almost say that there is no retirement being paid unless the workers pays into a 401K (etc.).

This means that in the future, these ‘contractors’ not being paid minimum wage, no social security and no retirements - what is their future, when and if they reach a retirement age?

Truly a dog eating dog world coming our way.

[frazzled]

6. As independent contractors, they would have to pay self-employment taxes

for Medicare and Social Security on their tax returns. It’s required. Hopefully, they will have lots of expenses to write off against their income, for gas, auto upkeep and repairs, etc., thereby reducing their tax liability.

But it still stinks. And it stinks for the public as well, because the companies presumably don’t have to train them (and lord knows, so many of them in my city seem untrained), assume liability for their actions, etc.

This is all about those IPOs ... making those early investors reallllllly rich soon.

[Lonestarblue]

11. They pay taxes but have no employer health insurance.

Healthy young people may be able to get by without health insurance for a few years, but eventually most people need it. This should be a big issue for younger voters (and actually all voters) because companies are finding ways to avoid paying for benefits for the people who actually do the work and make them successful organizations. Those people used to be called employees.

There are legitimate needs for temporary workers, but even they should be protected by working for temp agencies.

[Crabby Appleton]

8. The workers pay into SocSec and pay both their 'half' and the employers 'half' and

it been that way for decades - nothing new (i.e. self employment tax) If the court had ruled the other way, the employer would have had to pay the employer share of SocSec and Medicare tax.

[Cognitive_Resonance]

3. Corporations are people, and now employees are contractors. nt

[IronLionZion]

13. Corporations are people, but workers are just tools to be used and abused by executives

They of course expect favorable rulings and regulations from all that corporate money they donated to politicians.

[not fooled]

5. And another way

to underfund and bust up Social Security, the pukes' wet dream.

Sure to be upheld by the 5 corporatist pukes on the SC.

[watoos]

7. It wasn't enough for these greedy bastards to just bust unions.

[Maxheader]

9. I dunno..

I worked contract engineering for ten years...got my jobs through temp placement sites like monster...
SS was taken out of my check along with medicare etc..by the hiring shop, just like when I was a direct
at boeing. The customer...sikorsky, airbus etc paid the shop who paid me..after taking out for taxes
etc. If a corp wants to call employees 'contractors'...then maybe they need to get ahold of a shop like
CDS or PDM and have them setup written contractual agreements like I signed...

Of course, salary's...usually a per/hour rate has to be negotiated. And usually 30 to 50% higher than
whatever the corp had been paying...

[turbinetree]

10. SUPREME COURT ON EMPLOYEE VS INDEPENDENT CONTRACTOR

SUPREME COURT ON EMPLOYEE VS INDEPENDENT CONTRACTOR

TAX STATUS

UNITED STATES v. SILK
Supreme Court of the United States
331 U.S. 704; 67 S. Ct. 1463; 91 L.Ed. 1757 (1947)
June 16, 1947

http://cehdclass.gmu.edu/jkozlows/tax8.htm


And then there is this ruling from California.........................

https://www.californiaemploymentlawreport.com/2018/05/five-key-issues-california-employers-must-know-supreme-courts-ruling-independent-contractors/

[riversedge]

12. This is so wrong. so so so WRONG