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Comment by dfxm12 | Hacker News Reader

Instacart Inc. is cutting about 1,900 employees’ jobs ... as the company seeks to boost its ranks of contract workers.

It's important to note that "employees", in the US, are entitled to benefits [0] that "contractors" aren't. As more and more employers try to glorify the gig economy or fire employees in favor of contractors, it is more important than ever to make sure that critical benefits, especially affordable health coverage, are uncoupled from employment status.

0 - https://www.investopedia.com/articles/personal-finance/12091...

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It should be that if:

* All your work is for one firm

* You use their tools and/or premises to do the work

* You have no realistic opportunity to work some where else - either a restriction in your contract or due to the hours that you work

Then no matter what it says on your contract you are a employee.

That used to be the law in Aotearoa for everybody. But when Peter Jackson turned rouge they changed the law, personally for him and Warner Brothers, to take those rights from people working on films. And computer games.

https://www.hollywoodreporter.com/news/nz-government-changes...

Treating people as interchangeable parts, like machines, is simply evil.

I think your third point is key. For the first two points I believe that you can still be a contractor if you are choosing to do all your work for one firm and you're using their tools and premises to do the work.

One effect of your 3rd point is that companies decide to reduce the number of hours they offer to employees to keep them just under whatever threshold is created.

This happened in NYC with adjunct professors years ago, according to one of my friends who was working as one. If they wanted to avoid paying benefits they had to reduce the number of hours per semester, and it became uneconomical to keep doing the job for him since the amount of preparation was almost the same but the pay was much reduced.

Wouldn’t a simple fix be to say that if you have two part time positions at the same time for the same skill set you must merge them into a single full time one.

Sure, it’s heavy handed, but if they are gonna play games we can’t leave things to trust and common sense.

how exactly would you “merge” them?

Bundle the hours and responsibilities into a single full-time position.

I mean if you have first-year "Introduction to Algorithms" as a PT, and another PT "Introduction to NetWorking" then they can easily be taught by a single person. Create an FT where the job is to teach both.

What I have seen is jobs limited to weird amounts like 29 hours a week. You can't really combine two of those into one 58-hour-a-week position.

What do you mean by "merge" them? Have two employees (more accurately, 4 part-time 29.5-hour employees doing the work of 3 full-time 40-hour employees) share benefits: "You get health insurance this month and I get it next month, you can contribute to your 401k this month and I can next month" kind of thing? Or prohibit you from hiring more than 3 'unnecessary' part-time employees?

I'm abundantly familiar with the sort of antics that are involved. For another example, my wife used to work in childcare. To cover 8 classrooms Monday to Friday from 7:30 to 5:30 with at least one lead and one aide, plus two floaters (900 hours per week) they employed approximately 36 part-time workers (several were high school/college study programs working 16 or 24 hours per week) and no full-time workers. You're suggesting that they should be mandated to instead hire 24 full-time workers and pay benefits?

In actuality, every teacher and aide except the owners used to be mandated to work no more than 29.5 hours per week. You often had short stints of working from after nap time at 2pm to 5:30pm just so that you could make hours (which sucked when she was driving 30 minutes at 16mpg to make $10.75/hour with gas at $4/gallon). Some people got scheduled mornings, some got afternoons, but you didn't dare come in for a full day because then they'd have to give benefits. It was amazing how paranoid and irate the front office would get at 5:31pm when couple parents were late for pick-up and they had to keep staff around for more than their scheduled hours. If anyone hit more than 30 hours, they'd shuffle the schedule so they were no longer working afternoon shifts that might go long, and this was all complicated by frequently requested shift trades among the underpaid and underemployed people involved; you weren't allowed to cover for anyone if you'd gone over 30 hours in any of the previous 4 weeks. And it was a nightmare for anyone who tried to have a second job that might need you between 7:30 and 5:30, you wouldn't know for sure until Friday night what you'd be asked to work Monday morning. And they weren't just turning screws in a factory, this also had negative effects on the kids they were teaching when they'd wake up from nap time to find a relative stranger watching them.

Given the demographic, they much preferred shuffling around colorful magnets on a calendar to spreadsheets or databases, and there was a lot of shuffling indeed. But I'd hate to imagine what it would be like to code an automated time clock for that byzantine system...it would be generous to call it a game.

that's why functions in any public policy should be continuous to remove obvious points of stress and leverage used for gaming the system. federal income tax is this way, even as the derivative function, tax rate, is discontinous (bracketed).

We employ people that work less than 5 hours/week who get to make their own schedule and work from their homes. Even though all of them have other jobs and use it as a small side hustle, we still classify them as employees.

Many people choose to forget that there is such a thing as a part-time employee.

You missed the ability to negotiate the price of your work and not face consequences for not taking jobs that pay less.

There was a time when janitors were employees. They're not INDEPENDENT contractors, but they're still filling a much shittier niche than in decades prior. Mostly we just need labor protection laws in general and non-employer provided health care I'd say.

You have no realistic opportunity to work some where else - either a restriction in your contract or due to the hours that you work

I think this part would need to be more specific. A while ago I worked as a low level employee at the Gap in Boston, and the rules were that nobody could work more than 29 hours per week so that nobody was categorized as full time, but you also had to be available whenever you were scheduled. However, many people had two jobs, despite this restriction. They would be asking other employees to swap shifts every week and sometimes failing but usually making it work. Nowadays, with Uber, it's a lot easier to fill in an extra 15 hours a week that you'd like to work. So who could really claim to have "no realistic opportunity to work somewhere else" if any odd hours could be filled as an Uber driver or similar gig worker?

It's important to recognize that the different ways of scheduling part time work are really different. 20 hours a week that is mandated with three days notice by your employer really sucks. 20 hours a week that you choose with the Uber app is far better.

Yeah, how do we get more specific here? I had a few ideas, but they all seemed similarly nebulous or else might create suspicious discontinuities. [1]

I wonder if categorizing contractors v. employees is like recognizing porn. "I know it when I see it" says Justice Stewart.

1. https://danluu.com/discontinuities/

I just think it's a bad idea to treat contractors and employees differently. It's crazy to have someone happily doing X hours of work, wishing they could do X+10 hours of work per week, and their boss also wishes they could do X+10 hours of work per week, but then the position would have to be paid more and they don't have the money. It's just cruel to take someone working a minimum wage job, which sucks enough already, and then make them get TWO minimum wage jobs, two bosses, two schedules to work around, all because they can get a contractor job but not a full time job.

So if we say, if you employ someone at a normal 40 hour a week job, you have to provide them with benefit X. Then if you pay a contractor 20 hours a week you should have to provide them with something that's half the cost of benefit X. It just sucks to incentivize companies to hire two thousand 20-hour-a-week positions instead of one thousand 40-hour-a-week positions.

I think this comment helps me understand why Gig economy was ever a thing in US in the first place.

This was done in the UK and parts of Europe basically to appease the taxman.

See https://www.netlawman.co.uk/ia/ir35

The consequence, as partially intended, is that companies are hesitant to work with individual contractors. The problem is that if you want to start a consultancy, you're going to have a fun time finding your first client.

The correct solution is to decouple employment from taxation/benefits/pension/health-care/everything.

That is essentially how it works in many European countries, but even stricter. In the Netherlands for example, if 70%+ of your work is for a single employer and the number of hours is above some reasonable threshold, then you're an employee.

I'm not sure why the onus is on the business here, rather than the individual: when deciding to be a "contractor" vs. "employee," I should & do take those risks and decisions into account, and weigh the trade-offs.

You want 401k match and other nice benefits? Then become a full-time employee somewhere. You like more flexibility and independence, given the trade-offs? Then go with independent contracting.

Because they don’t give you that flexibility. They require a high number of working hours to stay in the system, and require you to work peak hours anyways.

No one really gains as a contractor working 39 hours a week without benefits.

The whole point of the sharecropper economy is to make it so a lot of people don't really have much choice.

Because, given the opportunity and no regulation, companies will always push to make all employees contractors. Independent contractors represent a significantly lower liability on the balance sheets. Except that those lower liabilities are just externalizing the cost of employment to other systems (health and unemployment insurance, etc). If we don't regulate corporations, they will just race to the bottom in how they treat labor.

I'll grant that I agree this is probably true for low-skilled labor where supply is high and interchangeable.

I don't think this is the case for low-supply, high-skill labor (ex: doctors, engineers, etc.) as well as certain low-supply trades (HVAC, welders, etc.) Then bargaining power can properly counteract any such forces.

"low-supply, high-skill labor (ex: doctors, engineers, etc.)"

Doctors, I know, have powerful unions and associations. Very, very, powerful.

This is absolutely true for engineers. While I did have employer provided healthcare, I was hired as a contract worker at Google X on their flagship robotics research project as a mechatronics prototype engineer and later a test engineer. I worked for two years alongside full time employees on the same exact things as full time employees. But they got stock, parties, and other special treats that contractors did not. Almost 50% of the team - I think the legal limit - were contractor roles.

While I do appreciate that from their perspective it makes sense, it is also true that if we don't fight to protect workers, all jobs will go this way. That's actually why what an up-thread comment said is a great idea. If we decouple important things like healthcare from employment, then everyone gets important quality of life care without employers having to restrict benefits. If we do not fight for ourselves, we will end up in a situation where most people cannot access the basic necessities of life. Already in the US millions of Americans are without healthcare.

The AMA is a union in all but name [1] and quite powerful [2]:

By money spent, the AMA is the nation’s third largest lobbying organization of the last 20 years, behind only the US Chamber of Commerce and the National Association of Realtors. [1]

[1] https://www.forbes.com/sites/johngoodman/2014/09/03/the-doct...

[2] https://www.theguardian.com/commentisfree/2019/jun/06/why-we...

What does lobbying have to do with whether or not an organization is a union? The Chamber of Commerce obviously isn't a union.

The AMA obviously represents a certain class of workers, so the question is whether it is a political organization to increase their stature. The lobbying stats answer in the strong affirmative.

American software engineers should form a special interest group. Not sure why so many people are resistant to the idea. Lobbies too. Its strange that an otherwise left leaning demographic acts virtually conservative when it really counts towards their labor

Edit for word choice

> American software engineers should form a special interest group.

It could be that one of the most prominent of the FAANGs is actually supporting things like this [0] under the threat of their lower paid warehouse workers unionizing. But also consider that Google is also going after its tech people who were involved in Unionizing and recently investigated an AI ethicsist [1].

I think its clear, most SWE have it (too?) good with amazing salaries and benefits to placate them into indifference or apathy on the matter and go to great lengths to keep them in an infantile servile cocoon/echo-chamber while at work, all while they create these abominations on privacy, free speech and the Human psyche while much of the rest of the World's working class/Industries suffer with under or unemployment altogether, so why risk it?

Especially since so much of the labour is through H1 visas who can control and dictate the terms of their employment with the simple decision to terminate them and leave them out in the cold rather easily.

It's concerning that even Tesla has been so anti-Union if I'm honest, and speaking as someone who has been in the Auto Industry, mainly German, most of it is highly unionized outside of the US.

It was the Big 3's fault for being complacent and relaxed about innovation that made it non-competitive and was highlighted in 2008 financial crises how bad it had gotten.

I'm not in favour of Unions unless as an absolute last resort, as in the case with FAANGs devouring of the Market share and its consolidation of the competition. I personally think having Unions only made the situation in 2008 worse for the Big 3 due to wide spread corruption and incompetence from the executive board, design, and engineering departments: but the core of the problem with US car manufacturers is with having a mediocre product in comparison to the rest of the World, rather than it solely being a union based Industry and thus a sure failure.

That much is clear and had been the case outside of pick up trucks since the 70s as Japan, Germany and now Korea have eaten the US' lunch (marketshare) in total national and international deliveries/sales YoY and DoD.

In the end it didn't stop Ford from still offering union based jobs, declining a bailout and they simply deciding to stop making cars now and focused on their stronger selling trucks, SUV products and some EV stuff, some of which is still in the works. They also had a massive marketing push for their Mustang and GT line up in Motorsports that made it rather successful. Though I think GM had more success with its relaunch of the Charger.

I wouldn't buy any of it myself, but I commend their efforts and still it shows that the 'Unions are the source of all evil' that many Tech based conglomerates push is not true, especially for Mega Corps like Amazon and Google who have severe and outright horrible labour problems.

0: https://www.vice.com/en/article/5dpkad/amazon-launches-anti-...

1: https://www.cnbc.com/2021/01/21/margaret-mitchell-google-inv...

What would a union do for me that could possibly be worth 1% of my pay?

There is already excess demand for skilled software engineers and if you don’t like how your company is treating you, there are many others from which to choose.

Security. Unions (and lobbies) aren't just about tangible and immediate benefits, they're a form of insurance against changing job markets and work forces. Again, not sure why you're so against it.

Do you have a good example of where a union was able to protect against major changes in the job market?

Steel is out. So are auto workers.

Why are auto workers considered out? The UAW still has hundreds of thousands of members. I would consider it relatively successful, for its members anyway.

They have lots of members but it’s way down from say 30 years ago. And benefits have been pulled way back. The union agreed that existing GM employees can keep their packages ($50+ per hour) while new union members start at $18. Basically 2 tiers of union members.

Job security comes in many forms. Working in a field where engineers can create huge returns for their company and where resulting demand far outstrips supply is a far better form of security than any union could ever provide. Unions can’t realistically protect against changing work forces. Software engineering is globalizing. Unstoppably.

I’m not opposed to people organizing for whatever purpose they think is best. I am opposed to people being forced to pay a tithe to unions in order to work in their field.

I don’t see unions as making my life in software engineering better at all and, given that, I’m naturally opposed to paying 1% of my earnings to a group that I don’t think will help. If others see it differently, they’re welcome to form one; I’m not “so opposed” that I’ll picket outside their workplace to interfere with them.

Most engineers seeking security for their future would be much better off increasing their 401(k) deferral (or other savings) rate by 1% rather than sending that money to a union.

Acting is certainly a high-skill profession, but even the in-demand ones are members of the Screen Actors Guild. They know why it's a good idea.

What do you think about sports leagues and the fact that the major ones in US have unions for their players? (low supply, high demand)

Perhaps. But also, given the regulation, you remove opportunity for those that are looking for the type of employment you discredit from accepting it from employers that want to offer it. I very much appreciate the ability to step into the gig economy when I need to. I assume you mean well, but I wish you and other's who agree with you would kindly butt out and let me make my own decisions.

> Because, given the opportunity and no regulation, companies will always push to make all employees contractors

This is not the case. Companies need permanent staff for: - deciding strategy, at various levels - deciding who's worth bringing on board - managing internal and external staff - cost (permanent contractors cost a lot) - being part of corporate memory, which can be handed over in a notice period of a month or two or three, but not in the week it takes for a contractor to offboard

If only it was a matter of choice rather than a very planned uberization of the workforce.

If only you could come reasonably close to proving that.

Let's say you were correct. Want to stop it? Regulation is just a wall with holes. The only way to stop it is to reduce the labor force.

If this is actually a plan, it's conception requires that the labor force is going to expand rapidly. In a tighter labor market, companies are much better off locking up labor rather than nickel and diming costs. So any said evil plan is an add-on to opening the gates to immigration, both legal and illegal.

The point is that companies are eliminating full-time employment roles for employees and replacing them with roles for contractors. That means there are less full-time employment opportunities for W-2 employees, and an increasing amount of roles for 1099 contractors.

Speaking as a person who intentionally chooses to be a contractor, and refuses offers of permanent employment because I prefer to be a contractor, I respectfully disagree. I have these options because being a computer programmer (lately) gives me options. In any occupation where it is a "buyer's market", the employee has no such option.

Now, whether things like healthcare and retirement should be linked to employment in the first place, is a real and valid question. But currently it is, and the distinction between "employee" and "contractor" seems bogus in a lot of cases.

When you say it gives you more flexibility do you mind if I ask what do you mean?

I'm in the US and generally my employment has been at will, either of us are free to end the arrangement at any time. Having a specific date where that arrangement ends doesn't seem to be more flexible, if I wanted to leave in a month I would just give my notice and leave.

I'm in the same position as you career wise and I often get offers to join contract roles and they are very unappealing to me. When I do the math on the benefits I'd lose out on and the additional taxes, rarely are these offers competitive let alone when I factor in the greater volatility inherent in the arrangement and the lack of unemployment benefits. Also in my experience the recruiters pushing the contract roles are the most desperate and aggressive, that doesn't lead me to believe these roles are all that high quality.

I just transitioned to contract based. The pay is significantly higher than if I was a salaried employee. In addition all of my salary comes to me, pre tax. This allows me greater flexibility regarding what I do with my $. For example I will use all income in the first half of the year to pay off all of my debt (2 cars, credit cards and money down for a house refinance). The second half of the year I will save for taxes and at that stage my overall monthly bills are massively lower. I get my health insurance via my wife who is salaried. In addition it allows me to write off a lot of things for taxes. Getting paid through my company gives a lot of tax benefits.

The contract is for a year, with the option to extend. The job I just left was salaried but actively laying people off. So while both positions have risk, the contracted one provides a much higher income and flexibility to use it as I see fit. Plus any work I do on the weekend for the contract position is paid, as a salaried employee its not.

Key point: "I get my health insurance via my wife who is salaried."

What if you had to provide your own health insurance?

  For example I will use all income in the first half of the year to pay off all of my debt

In the USA, this is a form of tax evasion, as you are required to pay estimated tax 4 set times a year, based on income during those periods. So, it might be prudent to avoid boasting about same in a public forum.

While you certainly should make payments 4x yearly, and I do, the reality is they just penalize you (10%, IIRC). I've never heard of it being prosecuted as "tax evasion".

But, unless your interest is >10%, probably actually costing you money compared to making 4x payments per year. IANAL (or accountant).

Maybe one month you want to work 40 hours a week, the next you want to work 20 hours a week, the next you want to work 40 again. That's quite hard to arrange with a traditional job, but often possible with contract work. Especially when you work somewhere that has a few contractors doing similar stuff and you can just arrange amounts of work between you and your peers.

I'm not OP, and I live in a different country, but my answer is unlimited vacation between contracts. Software development contracts cover my yearly expenses in 3 months. I have the rest of the year to myself if I want to.

This is more or less the chief reason for me to work this way. When my daughter was younger I would take summers off, to spend more time with her. Now that she's older, and not so interested in spending all day with her dad (sniff, but I think I was the same way at her age), I continue to do it because it gives me several months per year off, and also results in greater variability in what I'm working on.

If I just quit my job once or twice a year, after being hired as a "permanent" employee, after a while my resume would start to look like a warning sign. Why can't this guy keep a job? But as a contractor, it's normal and expected.

Would you mind sharing why you prefer to be a contractor?

See answer to nicbou's comment.

The unskilled labor market has monopsony power. This is effectively telling people to pull themselves up by the bootstraps.

If we go down that route then pretty soon 80% of people will be unable to find employment, at all. Which is fine as long as the rest of society is set up to handle that in terms of things like healthcare.

... and if any of these contractors are in CA, then they (edit to add this: Instacart) will likely be sued by the EDD. The EDD would view this as a blatant way to get out of paying benefits (which it does appear to be).

It isn't at all though if you read the article. They are instead partnering with stores to have the store employees fill orders from Instacart instead of Instacart's employee "shoppers."

The model of Instacart has evolved, it went from any shopper going into any store and getting you what you need to having the stores actually be in on it and using Instacart as an extension to increase demand and orders (think how DD partners with restaurants for delivery vs. the old Postmates model where they could just send someone in to order your food for you)

No one listened when I said Prop 22 is going to backfire hard. Bet the 1900 jobs are in California alone.

Why is the onus on corporations to provide benefits to the people? Shouldn't this come from the government?

i am really curious about the labor market in the few months. especially here in eu, the companies were holding their employees due to state subventions. that can end up badly when it is over.

There are advantages in countries with socialized healthcare to be an independent contractor (e.g. Canada). In the US, not so much.

I suspect overall you are correct. But it's really a function of what you pay in price, or tax. One of the reasons why contractors make more/hr is that healthcare and other benefits are factored in, at least in theory. Couples that both get benefits suffer the lower earnings while only one health benefit gets used (ignoring the small affect of coordination of benefits).

It really depends.

I know a woman who worked at my Fortune 500 as a contractor for like 3 years. She was able to bill hourly, work when she wanted (mostly).

I had heard she made $600k for a similar role where if she were an employee she would have gotten $200k + benefits.

The cost of a health plan was negligible.

I don't think this is typical. I'm referring more to freelance graphic designers, copywriters, etc. People who are starting businesses by leveraging their skills. Some don't want to be tied to a single client but have to start somewhere.

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