So if any one of those conditions isn't the case, you are an employee under the law. I see people in this thread wondering how it'll affect companies like Uber/Lyft/whatever
'B' is downright apocalyptic for contract developers in all sorts of roles. Sounds like massive judicial overreach to me. If your summary is accurate, I wouldn't expect that particular guideline to survive appeal.
> Sounds like massive judicial overreach to me. If your summary is accurate, I wouldn't expect that particular guideline to survive appeal.
It's a California state law issue and this is a decision of the California Supreme Court upholding the decision of the Court of Appeals, which had upheld the Superior Court. This has already survived the whole chain of appeals.
It's a California state law issue and this is a decision of the California Supreme Court upholding the decision of the Court of Appeals, which had upheld the Superior Court. This has already survived the whole chain of appeals.
So you're saying it can't possibly raise any (US) constitutional questions?
As an example, consider what happens when one of the affected contractors is in another state. That makes it a Commerce Clause issue. You can wave your hands and sputter indignantly all you want, but Wickard and Filburn are going to wave right back at you.
If you are an IT company and all your work is done through contract developers, perhaps you _are_ going against the spirit of the law.
Labor law is meant to protect those in the employer <-> employee relationship, and most contractual work explicitly weaken this relationship a lot. So contractual work really shouldn't be the norm in a business.
If you can't provide your main business without this set of people, then those people are probably your employees?
> If you can't provide your main business without this set of people, then those people are probably your employees?
That's not the case. A home builder may exclusively hire various sub-contracting companies to assemble a home, put in electricity, add finishings, etc. Those sub-contractors contract for many other home builders or landlords and are not employees of the home builders. That is the case, even though a home builder would go out of business without the sub-contractors.
Here is a different example. If a programmer works for one tech firm which calls the programmer a contractor, then if the programmer also create a personal website or side project for income, they may have established themselves as contractors.
I think there's a distinction here, which is often lost due to similarity of the language.
One class is "contract employee". These people are basically treated as second-class employees (with just enough arbitrary restrictions to enforce that) of the company they effectively work for.
The other class is "employee of a contractor". These people are real employees of a company that hires them and provides them benefits. The company they work for then sub-contracts to various other companies and uses those people to fulfill the work under that contract.
Since both cases use the term "contractor", and the former is far more common in the minds of everyone here, its easy to get the two distinctions confused.
In my experience "contract employees" normally work for a third party company that gets contracted by the hiring company. Then, the third party contracting company pays their employees after deductions and taxes. Otherwise, if not working for a third party company those individuals may be classified as independent contractors. When they are classified as independent contractors there already are limits on the number of hours that can be worked before they get turned into employees.
> even though a home builder would go out of business without the sub-contractors. //
They wouldn't, because they could drop in a replacement contractor. In your example the house builder relies on contractors but not the specific set of people doing the contracting (as in the parent), so any contractor can be replaced readily from the pool of contractors.
In theory a contractor can send someone else in to do the work, as long as the work in the contract is completed. If you demand a specific person to do work then they're likely an employee.
> In your example the house builder relies on contractors but not the specific set of people doing the contracting (as in the parent), so any contractor can be replaced readily from the pool of contractors.
All you've done is restate my comment.
> In theory a contractor can send someone else in to do the work, as long as the work in the contract is completed. If you demand a specific person to do work then they're likely an employee.
That theory is wrong. If Business A depends upon the specific person B, and B does other work outside of A, then B is not necessarily an employee of A. There are many people with specialized knowledge that others do not have. The acquisition of that knowledge doesn't make them employees. It makes them valuable.
> If you can't provide your main business without this set of people, then those people are probably your employees?
This doesn't make any sense. Farmers are not employees of grocery stores. Factory foremen are not employees of drop shippers. Amazon warehouse staff are also not employees of drop shippers. Comcast cable layers are not employees of YouTube.
You think farmers aren't employees of grocery stores because the stores could buy the same food from different farmers? That's just as true of the IT company and its contract developers.
This is a pretty big simplification. Grocers buy produce from the farmers, not their time.
This matches some conrractors, of course. But it also extremely doesn't match many contractor developers.
Are you required to be online 4-6 hours a day? Do some of the companies employees not even know if you are actually a contractor? Are you the one picking up the metaphorical phone when the company's client is calling with a support issue? You might actually be an employee
If you show up with a deliverable , can go on vacation without clearing it with anyone, and are actually your own boss... Well that's different of course
If you show up with a deliverable , can go on vacation without clearing it with anyone, and are actually your own boss... Well that's different of course
It was different, but my point is that the 'B' clause ("Service is outside the business' normal variety", whatever that means) can be interpreted to remove this distinction.
A lot of people are cheering for this bullshit without thinking it all the way through.
But that is wildly different. A farmer provides goods that hold value for almost anyone. Once they have produced a bushel of apples, that bushel can be bought by anyone. On the contrary, once a software developer has produced some code, it only holds value for the specific company that order this specific piece of code.
Not always. Consider two scenarios: (1) adding a feature to an existing product that the company sells. (example: writing a better grammar checker for MS word). (2) contracting with the developer of a small open source embedded database to add a specific SQL feature that you wanted to use in your web backend.
Honestly, most contracting developers are actually employees, and this position is just used as a way to skirt tax and labor laws. The abuse here isn't from the court, it's from devs and businesses.
Devs don't care simply because the pay is high enough and there are a ton of jobs available.
Somewhat true, but to me what matters as a freelance is that I get to make the call when I’ve had enough of a particular contract, or choose whether to wait for a more interesting project, or just sign up to whatever conference I feel it’s important to my own career plan.
When I was an employee I always had to beg to do anything, as well as suck up whatever shite projects the accounts would figure out would mean a sweet billability streak... dammit, the humiliation...
Eh that’s a good question, practically never. But there’s some good reason for it, in that development is not a routine job where you are completely interchangeable. There’s - thankfully - a certain amount of creative skill and professional judgement that makes me the hire and not a sub of my choice.
Several years ago Italy introduced CoCoCo contracts to capture this concept of temporary professional employment, between an employee on your payroll and a butcher you buy a stake from.
Eventually companies abused it and applied it to completely subordinates such as call center operators. It was - rightfully, given the circumstances - repealed.
I wonder if we could have something like that again, it would be easier than this pantomime.
Judicial overreach? Someone has to interpret the law. The original standard was judge-created and the refined over several decades. It was a mess and gave conflicting results in quite similar cases. This, no matter what you think of the outcome, is unquestionably a giant leap forward in clarity.
Yeah exactly. This is a question of state law and the Cal SC is the final word on what state law means. The only exception is if the USSC agrees that the state law violates some provision of the US Constitution and that’s extremely rare. Not going to happen.
That said, my (non-lawyer, pre-coffee) reading of what B actually says is that while it won't turn consultants into employees of the place they consult for, it will turn specialists into employees, whether or not they work on site. If a company occasionally submits patches to an open-source project they use, and then they hire a maintainer full-time for a few months, that sounds like B would require them to hire the maintainer as an employee.
I honestly am not 100% sure of the ramifications, but I am sure that these companies are going to act in their best interest, and with the current imbalance in the labor market (some might argue that the markets are right where they should be), I'm relatively certain that will mean employees being turned into contractors, or worst case they'll take the walmart route and make everyone work "part-time", drivers will think they're pulling a fast one by working for more than one company but they'll really just be driving their own wages and benefits down.
Of course companies are going to act in their best interest. But this ruling does not change that, because companies have been acting in their best interest all along.
If anything, this makes it easier for contractors to prove they ought to be employees.
Well, you've rehashed what I said -- That was meant to be to all the people wondering how this ruling would affect companies like Uber/Lyft/other gig economy companies.
The answer is it won't affect them, because they'll do what it takes legally to act in their best interest, like they have always done (and have had way more resources than the average worker to do). So nothing will change, outside of a likely reduction in lawsuits for companies most able to navigate the new legal climate.
The answer is it won't affect them, because they'll do what it takes legally to act in their best interest
But how does that follow? You're essentially saying that no law can ever affect them, since they'll always "do what it takes legally to act in their best interest".
I didn't say no law, I was remarking in the very specific context of this one.
What I was trying to say is that this legislation is unlikely to affect the most successful gig economy companies very much, if at all, because they'll likely find the best way to circumvent it. Even if they don't there's already very large corporations doing their best not to pay employees higher wages by taking advantage of the differences in protection for part-time and full-time classified workers.
Basically, the most upside I see for the worker with this legislation is every driver in a company like Uber needing to become an "employee". Let's assume that happens. I would expect Uber or any of the other companies to immediately take steps to reconfigure to evade this -- which I think in the "worst" (for the company, as in they weren't able to evade well) case is accepting employees but limiting them to part-time status -- it's already worked very well for companies like Walmart (and badly for the communities and workers there).
On the other hand, there is also an upside for Uber/gig economy companies -- the reduction in risk in the legal arena makes them much more attractive as an investment. Up until now, it's been an open question -- this will do much to close it. That benefit will ripple to the other lesser gig economy companies, because they will have a playbook to follow.
I got that you were talking about this law, but what I was missing was what you thought made this particular law different than others which would affect them. Now I think it's clearer.
That said, I'm not sure I agree that part-time wouldn't be that bad. It works for Walmart because their employees have low fixed costs for working (essentially just the commuting), so working fewer hours is still worthwhile.
But Uber depends on drivers buying new cars, which often they pay off by driving many hours per day. Once you limit that, they will lose everyone except the casual drivers.
The alternatives I see to this are not great for Uber: they either have to (1) buy and maintain their own fleet, or (2) accept competition so that drivers can fill up their daily schedule by working for multiple companies.
Hmnn, I think the fixed costs are only higher if you assume that most Uber drivers buy new cars to Uber -- is that true? If they don't then the fixed costs for an Uber/Lyft driver would be even lower than Walmart right?
I definitely agree with the rest of your comment -- but I think the affects of (1) and (2) might actually be net positives for Uber:
(1) More fleet for their self-driving efforts seem like not a bad thing, also I don't really want to do the numbers but the 10k spent in a year on the cars as capital instead of employee benefits might look at lot better on a balance sheet (especially tax wise).
(2) I think this is only true if the supply stays the same as now -- when people hear "oh uber pays more now", I think the supply might increase a little. The increased cost per worker will be spread over all the competition, and as long as the per-worker cost isn't too high for part-time vs contractor.
As an aside to all this, uber has also started (long ago?) charging people what it thinks they can afford so that's also a factor, it's not even a single consistent percentage anymore (if it ever was).
I think most buy/lease new cars, but it might be outdated; I think Uber used to have more restricted rules on the age of cars, but it seems nowadays they can be 10-15 years old.
(1) "10k spent in a year on the cars as capital instead of employee benefits" - Right, but nowadays they are spending on neither :)
(2) Right, but that means Uber can't take over the market. That's a pretty big blow.
'B' is downright apocalyptic for contract developers in all sorts of roles. Sounds like massive judicial overreach to me. If your summary is accurate, I wouldn't expect that particular guideline to survive appeal.