A story about Upwork and freelancers
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The government bureaucracies prefer this, and have at different times and in different jurisdictions cracked down on whatever other sorts of work-matching arrangements startups have attempted to use, for themselves or as a clearinghouse for others.
The likely threshold for the "compliance issue" could have been that Wallace (the tweetstorm author) had few or no other clients, and was billing this single client full-time hours over a significant period. That full-time exclusivity is a major factor in the tax/regulatory authorities wanting someone to be classified as a salary- or wage-employee.
Now, the very reason that the ultimate client prefers to use Upwork, rather than contract directly, is the headache of complying with these rules. They figure: we might screw up the 1099s, or cross some fuzzy compliance barrier, and then be hit with an enforcement action, if we try to handle our own freelancers. But if we use Upwork, well, they're the experts in ensuring "compliance", and have such a large roster of capable freelancers that neither we nor they would be at risk of appearing to be in an exclusive employment relationship.
Thus: the ultimate villains here are the tax/employment-regulation authorities. They've made the sort of arrangement that both Wallace and the client prefer incur extra legal risks. Upwork has just been clumsy in communicating that, and helping those on its platform navigate the rules.
That’s a pretty big “just”
Depriving someone of what had been a key business relationship without any communication is an abject failure.
But his account doesn't include a timeframe of how many days he was in this "lockout" state. (Was it a day? A week?) It's not clear if other details would have come via other channels, if not for the early warning he got from his direct backchannel-contact.
And suppose he and the buyer had reached a de-facto understanding: "we want to contract you for all your hours; please hold back your hours from other buyers to be ready to take our assignments". That's somewhat indicated by way this was quickly discovered at the moment he finished prior assignments (seemingly from the same buyer), and the buyer tried to hire him for immediate followup assignments. It's exactly that kind of de-facto exclusivity, where a single employer assigns all your work, that gets you slapped by tax/employment authorities.
Were there other highly-rated, qualified freelancers the buyer could have used instead? Were there other buyers ready to contract for Wallace's services, at the same rate as he'd been getting? If either or both, then rather than primarily "depriving someone of… a key business relationship", Upwork could in fact have been ensuring enough independent-contractor relationships to keep both buyer and freelancer on the right-side-of-the-law. (It's possible placing a single gig with another freelancer, or taking a single gig from another buyer, would have been enough to prevent the lock-up.)
After all, the buyer chose Upwork as the only way they hire contractors – and explicitly rejected the option to hire or contract with Wallace directly. They wanted Upwork to ensure compliance with tax/employment-law... which may be exactly what Upwork did for their paying customer, albeit with missing, poor, or sluggish communication.
The reason I take exception to it is that the concept of shadowbanning is deeply baked into the SV/startup culture and it's very often completely unethical. It's a pet peeve of mine.
Sure, if you're trying to stop forum spam then who cares. And I do understand that when startups were small they were incredibly vulnerable to just being overwhelmed by an avalanche of fraud. So historically, I get why there's a culture where platforms just ban or restrict people without telling them comes from.
But one thing SV has been enormously bad at is not realizing that they aren't feisty underdogs any more, they're the ruling class, and they often have tremendous economic power over people. When people depend on you for their livelihood, or for transportation or housing or similar, then you actually do owe them transparency and an explanation of what's going on.
Could they have "warned" both parties of the legal regs? Yes again. None the less, I suspect this was also in the T&Cs.
Whatever the case might be, Upwork is in the matchmaker business - not the relationship business. It's not an agency. It's an escrow of sorts in a fancy wrapper. The less legal exposure - including legal "advice" about what's been happening between the service-needer and the freelancer - is probably, truth be told, what they seek to maintain. It is, after all, not their job / role to do that.
Long to short, Upwork could have done better, but so could the other two parties using Upwork.
p.s. All both sides needed to do was open an account on another "escrow" site and then split the work between the two. The escrows wouldn't know. But of course, the IRS might.
Even if it is the key issue, that in no way excuses this horrible treatment, or passing it off as a mere "communication should have been clearer".
Complete, absolute failure to contact the worker using your platform in any way?!?
Nope, absolutely unacceptable.
All UpWork needed to do was to say something like "This work profile, with many projects on a single employer is passing the threshold of 1099 vs W-2 employment, and as such we cannot continue supporting this hiring/working pairing as a freelance intermediary due to regulatory issues. BTW, we have a W2 Payroll solution that you can sign up for immediately to solve this problem. More details here...".
The fact that UpWork did no such thing indicates clearly to me that they are not in fact concerned about regulatory issues, but merely using them as an excuse to upsell, while trying to lock-in their worker base by keeping them in the dark. IOW, completely unethical practice.
As a biz owner currently using freelancers on several platforms, Upwork just got crossed off my list (just as I'll never intentionally use Uber).
(1) Wednesday PM, Wallace finishes "several assignments" for this one client, marking them done in the system - and that on top of the other "dozens" of jobs he's done for them in the last few weeks, including "rush" jobs, flips his account into the "compliance concern" status which hides him from that one client.
(2) Thursday AM, friend at agency says, "hey, we can't seem to hire you for more gigs"; Wallace says, "that seems wrong, ask Upwork"; agency quickly responds, "they can't explain, ask on your end".
(3) Wallace finally reaches someone at Upwork after lunch Thursday PM, getting the unsatisfying explanation, then posting his angry tweetstorm 2:21PM Thursday/8th.
Taking a day or two to explain an exceptional situation, or perhaps a situation that's part of a brand-new policy adopted under legal pressure, is not necessarily an awful failure.
We don't really know if there might have been other explanations that would have come a few hours later, or that he missed somehow.
It's even possible the status of his account was some short-term temporary "gray out" status, that nudges freelancers/buyers to diversify their counterparties, and that this gray-out status almost always results in a "cure" quickly with no explicit communication required.
I would prefer explicit transparency in such situations... but could also understand why the company might be a little coy about directly coaching freelancers. (If they get that coaching even just a little wrong, according to some later interpretation of the contractor rules, it could wind up being used as additional evidence against them.)
Relying on some kind of quasi-plausible timing/delay issue, as does the parent comment, it's even less of an excuse.
The more I see, the more clear it is that Upwork are
If they were going to give proper notice of what they were doing, they should have done so simultaneously with shutting off service. If not, they're also wrong.
It really has narrowed down to two choices:
1) Upwork are completely incompetent to even perform their primary functions
2) Upwork are playing a very unethical game.
Either way, they are not qualified to operate their business, and shouldn't be hired from either side.
As far as we can tell, he learned the details from Upwork within 12-48 hours of when the issue was discovered. That's not so bad!
He wasn't prevented from appearing to other buyers during that period – just the single buyer with whom repeated jobs jeopardized his independent contractor status.
Tempest in a teapot. Wallace's anger at the communication is legitimate, but he's likely misinterpreting the root causes, and the downstream demonization of Upwork is out-of-proportion with the particulars.
Legal issues are always somewhat 'fuzzy' and subject to judgement -- it's why we have judges. And this is not that fuzzy, the IRS has published clear standards for decades and it's well litigated. Nothing about that prevents a company from defining the boundaries of it's behavior and communicating clearly & behaving ethically.
Timing is utterly irrelevant here. The ONLY reason he found out is that he had the good luck to have a well-placed friend who could see the issue AND had a communication side-channel. Absent that luck, he'd be permanently screwed.
We've got no data on what other customers were able to buy or not, and it is also irrelevant -- particularly for a contractor primarily occupied with a single buyer, who would not have tuned his marketing to the broader market, and due to Upwork's unethical behavior would have no notice that he needed to.
"...in a teapot"? BS! A scaled business like this is a large system, and this is an example of how the system works, and limits the range of possible root causes.
In Upwork's case, it is either one of two things.
1) A sloppy mess of incompetence and make-it-up-as-you-go-along supported by ill-invested venture funds. Or,
2) A management that has specifically decided to implement a system of unethical behaviors in hopes of extracting higher profits regardless of the cost to it's users.
Either way, they are either unqualified to be in biz, or unqualified for anyone to do biz with.
I'm left wondering why you are such an eager and persistent apologist for this behavior, grasping any straw to excuse it . . .
Sometimes handling exceptional situations takes a day!
If many Upworkers are hitting this, then more automation and coverage in public FAQs would be appropriate. But if very few are, or it's a new policy that's fluid and involves case-by-case review, then maybe a day or two clarity is fine for now, even though it caused anger in this one case.
Wallace wasn't blocked from all work: just that one buyer, where Upwork's expertise – expertise that Upwork's customers are paying for, to cover their legal risks – flagged a potential "contractor rules" compliance problem.
> Thus: the ultimate villains here are the tax/employment-regulation authorities.
Why be so quick to think that this may not have been Upwork's fault, but the ultimate villains definitely are the tax/employment-regulation authorities?
If there is a regulatory issue at stake, the correct thing to do is to disclose it quickly and transparently.
Upwork (and other freelancing websites) have no communication problem when it comes to telling you that you need to pay them some new fee, or when it comes to allegedly violating their terms and conditions. But when there's a regulatory problem, it's "just" a problem of communication? Hard to believe.
Virtually every freelancer or contractor I know uses these platforms when they're starting out in order to develop a basic network of contacts and a steady (if very badly-paid) stream of contracts to build on. But as soon as you can avoid these platforms, you do. And not because of the fees, which aren't that high, but because of the disastrous support (like in this instance) and lack of protection against scamming.
That's bull in a China shop levels of clumsy. And that's the best case
(If Mr. Wallace has his own corporation, that might provide some extra cover, but that also might be a rare/expensive enough situation that even Upwork can't pay Wallace Inc., but has to pay Wallace-individual. In fact, there's an answer at Upwork's support forum suggesting that a corporation can't sign up as a freelancer: https://community.upwork.com/t5/Freelancers/Company-account/...)
See my other post on the vagueness of Wallace's time-frame: he might have even gotten the answer less than 24 hours after his account entered this "no more work with this client" status.
I'd share his frustration that it wasn't instant and automatic at the moment he was "shadow-blocked" from his primary buyer's interface, but I also understand that legal-compliance exceptions sometimes take a day (or a few!) to be fully investigated/explained/etc. Maybe there's a human-in-the-loop at Upwork who does a case-by-case review, when an bilateral-relationship hits these might-be-an-employee danger-triggers – and his rapid discovery, same-day inquiry, and rant outraced another process.
The regulatory environment isn't set up to handle a situation where an employee would rather be a contractor, because that's relatively rare.
Ideally there would be some way to take the worker's preference into account, but things just aren't set up that way and so the assumption is that contractors need to be protected from employers who want to screw them.
In any individual case an employer could probably document an employee preference for a certain classification and be fine. But UpWork and state employment regulatory bodies are built for handling scale, so processes will tend towards working for the most common situations.
Is that supposed to be better, or worse ? They're some combination of incompetence and malevolence. I feel like incompetence is worse.
Upwork has been in the news more than enough to make it VERY clear that if there's any kind of organisation that needs to be prevented from exploiting others, it's Upwork.
I think "big evil corporations" like this setup just fine.
Companies like upwork do absolutely nothing to solve that problem. In fact, they make it even worse by not even considering the idea of offering any healthcare service to any if their "contractors".
Companies like upwork provide a place for independents to find clients. I spent the last 10 years earning most of of my income from consulting. The hard problem is not getting health insurance (you can buy it, it's just expensive and paid with after-tax dollars). THE hard part about being a consultant is finding people to pay you.
These marketplaces might not be perfect, but they're a step in the right direction. I want exactly one thing from them - the ability to find work and get paid.
- pay less for insurance - after my subsidy, I pay less than my portion as a W-2 employee for nearly equivalent coverage - pay less for funds in my solo-401k without any other fees - don't get a FICA deduction for my HSA contribution (not sure why you have to be a W-2 employee for that deduction) - make more, even after additional FICA taxes
I was already an "at-will" employee, so I didn't get much more protection anyway, so leaving my company and working as a 1099 was a net win with pretty much zero downsides.
I really don't understand why the IRS is so adamant about making people W-2 employees, it's quite often a worse situation.
Because this sure feels like something that should generate a big HEY YOUR RELATIONSHIP WITH THIS CLIENT NEEDS TO CHANGE email/banner/etc.
I was in a similar situation with a company in LA, and my contracting company alerted me to it, and helped me transition to full time employee status with the client company, once i’d Worked enough hours with the contracting company.
- Making a public statement regarding specific case with Michael. Especially why they decided to go behind his back to communicate with his agency.
- Making a public disclosure of reasons they acted so ignorantly toward freelancer.
People could and will leave Upwork if they're going to keep this absurdly behavior.
The only thing that spread faster than California fire is public opinion in a Twitter age.
There's no way in even 2 whole months that this would trigger any sort of action, as far as I am aware.
There is loads more people who fear loosing their job than entrepreneurial freelancers. There is load more minimal wage workers which would be abused.
But Upwork still handled it very poorly. They communicated nothing to the contractor, and they told the employer that the only option whatsoever to deal with this contractor at all was to use some expensive "Wework Payroll" service.
That's ridiculous. Absolutely nothing about the situation requires that service. Essentially, Wework was taking over the relationship and then acting as his exclusive agent while making decisions that were against his interests. But you can't have it both ways like that (own the relationship while acting against the client's best interests).
They should have been upfront: "Hey, he's worked for you enough that he has to become, legally, an employee; we can't keep billing you through the Wework platform like before. [give possible workarounds]." And copy the contractor on the email.
Still a stupid law, but they could have handled it much better.
In this case, I suspect the client is aware of the constraints which is why they insist on having a middleman.
There are two sides to the morality of this, but I’m not sure Upwork is guilty of anything other than crappy communication. (All staffing agencies profit on the conversion)
There are complicated rules for determining who counts as an employee and who doesn't. Microsoft famously lost (or "settled?") a lawsuit around this issue: https://corporate.findlaw.com/human-resources/employee-or-in.... I don't know the details of the case and found this piece via DuckDuckGo, so others may know more about it than I do.
In short, some kind of tax / regulatory issues may lie at the bottom of this case, and the comment above should be near the top of the HN heap.
Edit to add that, of course, this is no excuse for the company not explaining what's going on.
The government decides how you’re classified, not you.
except that the issue in some countries is not cracking down on fake freelancers, but on companies who avoid taxes by treating their employees as contractors, to the point that these contractors can sue their employers to receive full employment.
upwork for sure didn't communicate very well in this case, so there is still cause for compleint, but only about how they handled this case, and not why.
greetings, eMBee.
Basically different types of companies have different legal requirements in terms of taxation, retirals and benefits. In the legal system of two countries I am familiar with larger companies have a higher burden than smaller firms.
In this scenario, a large company could theoretically reduce their costs by contracting a number of their workers as employees of smaller firms and masquerading as if they didn't have lots of employees. However it's still the management of the larger company which is supervising the work and therefore effectively committing fraud.
In situations I have worked with, there are a bunch of restrictions in what can be contracted out like this and what can't... Also how long can you have the contracted person working for the company - because if the work is person dependent, you should have hired the person directly.
I would possibly blame the hiring company more than UpWork, but there's no doubt UpWork's communication could have been better. Most of my freelancing has been done through umbrella companies in the past, but increasingly it seems a better option to use Ltd. company in the UK due to employer those massive NI contribs.
Since this simplifies the individual's tax paperwork and transfers some of that burden to the employer, this can frequently be framed as some kind of "fighting for the little guy" thing, but it's really just about the government getting paid more reliably.
Typically w2 is better for the employee. But if you are planning to do a lot of work then getting a 1099 under your LLC or S or C Corp can work out better for a sole owner.
Having only one client for over a year or so, in IR35, isn’t necessarily an immediate indicator that you’re an employee masquerading as a contractor.
Upwork’s algorithm seems to use that as the primary metric.
Does anyone else think that this should be an issue for targeted regulation? No one would accept a company taking over the road network and then randomly trashing people's cars for incomprehensible reason, yet people seem to be dreamy-eyed and naive about these new inbetween platform companies and seem to think that the market will solve itself. (Which is - as may be known - not the case with monopolies)
On the policies side: Upwork doesn't seem to have real written rules in place on at what point too many jobs for one company puts them at risk of violating the CA freelancer law. This makes it easy for a person to inadvertently place their livelihood at risk by doing what Upwork would otherwise be encouraging them to do -- more business through Upwork.
On the transparency side: Once someone breaches this invisible line, Upwork doesn't feel the need to communicate it to anyone. That would be expensive, and it seems to cut against Upwork's interests, so the wire is tripped silently and the party on either side of the transaction basically goes mad with confusion while they try to figure out what happened, until they finally exhaust themselves and give up.
Each of these is inexcusable and absolutely needs to be civil offense. The stories of people silently and irreversibly shut down by impenetrable platforms and then not able to even reach a human who can explain what went wrong are legion with internet-based services. Now that those services form the basis of a large swath of working people's livelihoods, this absolutely needs to end. Part of the cost of doing business should be clear rules and clear lines of communication when the rules need to be enforced, and an appeals process staffed by humans, or else these companies should be forced to pay out for lost income.
greetings, eMBee.
I for instance downvoted your comment, for supporting a blanket regulatory attitude across the IT spectrum. It's tantamount to proposing a single programming language across the whole stack. That portrays a very narrow view of the world. Not to mention it can lead to being counterproductive.
Do note, human communication is a complex endeavor. We employ all kinds signals and techniques for information exchange and a simple downvote in an online forum is a perfectly valid signal, albeit an ambiguous one.
That's jumping to conclusions. I didn't elaborate at all what kind of regulation I support or how granular. I now feel that my comment wasn't up to the standard, because it has a bad mix of off-topic and terse "snarkiness".
As to the usage of downvotes, of course you can use it however you like, just like you can dismiss anyone you like whenever. I'm referring to a common _regulation_ in communities, that a comment shouldn't be dismissed if you don't like it, but only if it has a negative effect on the discussion.
What do you hope to achieve by downvoting those you disagree with? Force their opinions to the bottom of the discussion stack? I.e. silence them? That's what you're effectively doing, and it's not conducive to a healthy community.
I fail to see how I jumped to conclusions. You clearly stated that vis-a-vis regulation:
> I'm a big proponent. Everything from closed-source to monopolies and ads.
If this is not an extreme pro-regulation attitude then I don't know what is.
And just to be clear, comments are clearly superior to downvotes, though we'd hardly get any work done had we written replies to all comments we disagree with; thus, occasionally replying via downvotes.
State tax/regulatory authorities disfavor contractor relationships, even when clear-eyed counterparties prefer it.
That's probably why the buyer does all their contracting through Upwork – it's a bigger risk to do it any other way – and also why Upwork has certain patterns-of-intense-work they must either block, or convert to the government's preferred payroll-relationship.
This rule is somewhat universal and matches all business types and platforms: Amazon, eBay, AirBnB, Uber, YouTube, App Stores.
https://support.upwork.com/hc/en-us/articles/211067618-Freel...
I'd say once a good match between a contractor and a client has been established, both parties should swiftly move away from the Upwork platform, their rent-seeking "rules" be damned!
You can email, Skype, phone once on a contract.
Not saying one shouldn't do it, but as Upwork is so flooded with shady characters I'd be hesitant to move clients off the platform too quickly.
(disclosure: Treeverse is a free-time project of mine)
Being able to see the tree of comments is one of the reasons I like HN and Reddit more than other sites.
It's weird at first, but then it makes a lot more sense than classic linear forum threads, Twitter, or Facebook.
You might be able to work around it though by creating a new incorporation of changing juristiction, but that's a bit complicated. It's also not clear if Upwork's contract is legal or enforceable.
I think that is only If you want to work for the same client again [Maybe has being changed in the last years?]. After a few jobs some clients will try to circumnavigate the platform. In any case I wouldn't be very surprised if some of this clients were disclosed as upwork employees in the future pushing their own agendas.
After spending some time in the platform you can see lots of strange patterns repeating here and there.
Heck, everyone ditched Digg in a matter of weeks due to a UI redesign. How on the same earth are people still using Upwork despite issues that are for more serious where people's livelihoods are affected?
I know of many freelancers who typically do between 40-50k on upwork plus other projects outside the platform. Personally, I have moved into consulting and do not rely on upwork. While still not a lot of money by standards here, I’m on track to 100k this year. I think the huge benefit is that I don’t have to deal with a lot of stress that comes with employment or nonsense the kind that the author talks about with upwork. Consider that platform your path to a sustainable freelance or consulting career. Gotta put in the grunt hours to move up. Of course there are many exemptions if you are in the right circumstances.
Upwork turned out to be a good solution for me. It took about three weeks of searching through Upwork job posts until I found a good fit. There were a lot uninteresting job postings to wade through. And being new to the platform (without any history or earnings) probably made landing a job more difficult.
But I finally found a great client who allows for flexible hours at a pretty good hourly rate. Most of our team was found via Upwork and with only one exception everyone has worked out well.
The Upwork screenshot/work monitor software is definitely intrusive but I feel that's the cost of earning trust in an environment where clients and providers don't necessarily know one another.
Now that I've earned over $10k working for this client, Upwork is "only" taking 5% of my rate. However I feel this is quite fair given the platform they provide. Anyway a body shop would be taking a much bigger cut. I'm also building up a history within Upwork and future gigs should be easier to land.
Just as with other trust-based systems like Airbnb, the longer I'm on Upwork and the higher my reputation & earnings become, the more I'm incentivized to keep using it.
"A marketing company that wanted to work with me only hires freelance writers through @Upwork. So I signed up. I wasn't thrilled about it, but that's who they contract with and it's their marketing company." - the second tweet in the linked series of tweet
Toptal is too much for scoring some beer money, Upwork may be too cheap and unreliable but I'm not sure sysadmins have a better way of finding clients.
Sure, Upwork is much easier than this but with this ease comes this huge risk of your livelihood disappearing into thin air at the whims and fancies of Upwork.
greetings, eMBee.
The majority of the freelance jobs out there are on Upwork and cannot or will not afford benefits or competitive US rates.
The company can't employ him for full-time work as a freelancer, due to regulations that protect workers rights. Whilst that might be a problem: it's like one person doesn't like it and millions need it to protect their livelihood.
Upwork wouldn't inform him because it's nothing to do with him, he's a freelancer not an employee (the reason for the whole issue). If he were an employee obviously payroll (who Upworks represent in this case) would have to give notice etc..
So, in part he's complaining about not getting the protections that a full-timer does - notification of change of work, conditions, hours and such - whilst simultaneously arguing that he should be released from those same protections.
I mean who wants holiday pay, sick pay, employer pension contributions, job security, etc. ...
Protections from who? Upwork? They are the one he needs protection from according to his story thread. They are the ones who are preventing him from earning his money by telling his client that they can’t Horne him anymore
So if these 'protections' are going to work out then they need to account for the financial situation of the employers some how and also prevent them from dropping misclassified employees when they become properly classified.
1. Wallace was on Upwork to freelance.
2. Wallace was working for one client so much that he was at risk of becoming an employment relationship, rather than a freelancing one.
3. At no point was Wallace prevented from freelancing on Upwork; Upwork (as far as is known) presented all valid opportunities to freelance to Wallace.
4. Upwork communicated to the client that if they wanted to keep working with Wallace, they'd need to hire him.
5. The client refused to hire Wallace, and tried to find ways to circumvent labour laws.
That seems to me to be a plausible interpretation of the facts from the twitter thread. In which case, the client seems to be the villain here, Upwork has done everything right, and Wallace seems to be a bit confused.
In particular: "The marketing company, as confused as I was, pressed @Upwork further. @Upwork would NOT tell them, refused to tell them what those supposed compliance issues were. [...] So for the marketing company to continue assigning me work, they have to enroll in @Upwork's 'payroll service' to do it."
This doesn't add up to me. Either Upwork is refusing to tell the client why they can't hire Wallace as a freelancer, OR they're telling the client they need to hire him as an employee. They can't really both be true! I don't know who's lying/confused here (maybe the client's HR dept is lying to Wallace's contact at the client, maybe the client is lying to Wallace, maybe Wallace is just confused), but it seems pretty clear that Upwork is angling for the "payroll service" upsell, and was telling the client very clearly that they need to hire Wallace. (That's not the story they told Wallace, but it doesn't seem like they really had Wallace's best interests at heart here, as they had a wide number of options available to them to fix this.)
And: "So @Upwork is insisting the marketing company make me an employee"
Yeah, pretty sure that's a legal requirement there buddy. And yes, I understand that both you and the client would like to circumvent it, but that's the point of labour laws; they only apply in cases where people wanted to do something they ban. Minimum wage laws have no impact on the engineer making $120k a year; they impact (for good or ill) the immigrant willing to work for $5/hour. Laws requiring firms to treat people working full time workers as employees were passed explicitly to cover the people who are happy to work full time as contractors.
In Aus we have something sort of similar for contractors called personal services income. The rules are somewhat complex but it roughly boils down to the 80/20 rule - if you derive more than 80% of your income from a single customer, you have to treat that income as if you were an employee. Note that the burden here is on the contractor and enforcement is via the tax authority - as opposed to this case where the employer seems to be on the hook
Advice to consultants - avoid these places and sign your own contracts direct with customers, and invoice your customers yourself.
http://www.courts.ca.gov/opinions/archive/S222732.PDF
> [A] worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity's business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
https://www.bizjournals.com/sanfrancisco/news/2018/09/04/cal...
The issue is basically that for contractors, you generally pay no benefits or retirement plans. However, if they are effectively employees, you do need to pay them that (ref. Uber driver cases where they are suing for classification as employees)
Hiring freelancers just to save social security costs or to avoid labour laws is unethical at best and in many jurisdictions downright illegal.
Setting up a payroll system to make this look good on paper is quite a dodgy move.
If the company is hiring him for so many jobs that he is basically a full time employee there they are the arseholes not Upwork. That marketing firm get their shit together, hire him and pay him the money (and the extras) he deserves.
The labor laws in place are to safeguard companies from using employees in a fulltime manner but treating them as freelancers so they dont pay the 10% employer tax, or sick leave or vacation or minimum wage or overtime. Once you start hitting over 30 hrs/week, and for more than 3 months workign for the same company- you are hitting the red warning flags that either the IRS is going to start asking questions about why they're not getting the employer tax, if th freelancer claims unemployment they are going to look for the last employer. and the freelancer might himself decide to sue the client claiming he was misclassifed as a contractor.
In this case all he has to do is enroll in the payroll service, pay a little more in taxes and reduce the co-employment risk to his client in exchange for more regular work. If not diversify your client base.
Back in my freelancing days, I made a conscious effort to own the whole conversation - not to use a platform - but to do my own marketing.
As an aside, I've found it interesting to watch youtube videos made by Uber, Ubereats, Deliveroo delivery people - by scooter chargers and how they all discuss how to make more money - or to complain about changes in policies having a financial impact on them.
Upwork saw an obvious red flag and covered it's arse. I think they could have done a bit better, but the Twitter rant is foolish, at best.
Sure it's just one experience, but they are crossed off in my book. I still get their recruiters emailing me on occasion (often more than one of them for the same position which is its own kind of mess), but I set the domain to just go right in the trash
It’ll be so frustrating to watch the current leaders in these industries, the companies who are actively fighting for ways to get around regulation, as they suddenly begin to fight for regulation to keep cooperative or community owned infrastructures out of the competition pool.
I think it is obvious that P2P distributed platforms will be leveraged to replace the monopoly company platforms. Things like cryptocurrency payments, Ethereum smart contracts, IPFS, Swarm framework, dat, WebRTC, etc.
I'm not into projects that are under 3 months, so I didn't use these platforms.
But there are enough alternatives (CodementorX, Toptal, Uplink)
I just learned about the law change, and I think it's driven in part by the low wages of Uber drivers and a recent lawsuit there.
Great, you built a unicorn on the broken backs of low wage earners, structured the unicorn to avoid your share of infrastructure taxes (social security, workmans comp, road use taxes), but could you have done it with a less destructive wage structure? Probably. The laws have to catch up.
You still have your $200 and don't have a pile of poo posing as a web app.