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Comment by jcims | Hacker News Reader

Is it possible to pay someone in the US without getting their SSN/EIN? In other words, is there a way to do this without any major strings attached in either direction? I think that's the impediment for most orgs. By the time you've gotten to the interview process most companies have invested thousands of dollars per candidate in the process, adding on a $500-1k cash outlay per short-lister would be a rounding error.

Also, giving someone an actual backlog item would turn off most companies, but building a representative task where you vet performance against your current staff seems to be reasonable.

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As a company, you don't have to report payments to a freelancer under $600 [0]

[0] https://www.irs.gov/businesses/small-businesses-self-employe...

edit: added source

However the IRS states all income above $10 "must" be reported by the recipient.

You can self report that via other means, you don’t necessarily have to receive a 1099

Agreed, just saying that it wouldn't be tax free income.

My company, tremendous.com, does this, including the tax form collection process if spend exceeds $600 / person. Our primary use case is user research incentives, but interview incentives is an analogous problem.

Basically no strings attached for both sides. We do complete a compliance review for businesses signing up for our site (given we're a payments company), but it's basically invisible at smaller volumes.

I would say it's more strings attached than handing a wad of cash to someone. A service aggregator like this certainly would reduce the headache for the hiring company but for the person being interviewed they still have to 'play ball' by entrusting some commercial entity with private information, no?

Kinda- for a $300 reward, for example, we only need an email address. So a recipient could just choose an Amazon.com gift card and apply it to their account, with only an email address provided.

The IRS has joined the chat

Stripe Connect collects SSN/EIN for someone to get paid on Algora. It's basically no-strings-attached contract work within Git repositories.

No - the company would need to file a 1099 (assuming it was structured as a contract gig)

Algora takes care of 1099s (via Stripe) so you don't have to

De jure, no.

De facto, VISA gift cards.

That doesn't scale though. We hired 150 people in one engineering org over the past two years. Assuming we picked from a pool of 500 that'd be quarter to half million in gift cards.

Edit: because my point seemingly isn't clear. It's not about the money, its the fact that you can't hide a quarter of a million dollars in gift cards from the IRS. So for this process to scale, it has to be completely legal and above board.

It sounds like if that's the model, you're externalizing your costs to those unfortunate 500 people's time.

That's pretty unethical. Maybe don't waste so many people's time if you're very unlikely to hire them?

Those I interview, I ask to complete a small task that I pay for. It's the only way I can do it and feel okay about rejecting them if I choose to.

It feels pretty bad to work on something, get rejected, and have no compensation for your time and effort.

In this situation, the hypothetical 500 were on the short list from tens of thousands of applications and some intermediate number of first round interviews. This was the 'short list' and we could have likely hired any one of them successfully.

We didn't do the 'hand them a project for a day' btw, we met them in person and had them go through a half day of panel interviews. Still something that ideally they would have been compensated for beyond food and our gratitude.

I'm on the side of paying candidates that go through any substantial interview effort, I just think that the regulatory details are going to select for folks that are less privacy-focused and are already established in the domestic economic infrastructure. I used to work in a bug bounty program where we paid out to researchers all over the world and the logistics of it was a pretty major issue (and resulted in a non-negligible portion of the submitters forfeiting their payment).

It's an extremely common practice so I don't mean to specifically go after you about it. I'm sorry if it came off that way.

I just really don't like it. I see it as exploiting people in a vulnerable position.

You're right that there are varying degrees. Certainly the worst - for me personally - was King Games in Sweden asking me to spend a week on making a candy crush clone after a short phone interview. I was in a position to refuse but I cannot imagine how many peoples' weeks they wasted.

You bring up good points about privacy and regulatory difficulties.

I just don’t know why you focused on the monetary total earlier. You’re already spending thousands of man hours of your own engineers’ time to interview them - the gift card cost is not that consequential in comparison.

I wasn't clear, it's not the money. The gift card suggestion was basically a way to pay 'under the table', which doesn't scale.

Ah that makes sense!

Now add up the money you spent to interview those 500 people using the fully loaded per-hour cost of all the staff time. It'll be much larger than the cost of paying your interviewees.

Indeed, this might save money on net at a lot of companies. So many places are much more careful about spending cash than labor hours. I could imagine paying interview subjects could add a crispness and a focus to hiring processes that is often absent.

I'm not arguing against paying folks, I'm saying the paperwork overhead is substantial and will bias the process against those that don't want to cough up tax info for every company they apply to.

Below $600 to an individual, the IRS does not care. I have a small sites running Google ads that got me something like $200 last year. When I did my taxes, I couldn't find the 1099, so I wrote Google. Not only is it not legally necessary to send me one, they category refuse to provide the paperwork.

You are replying to me with your own tangential situation. Perhaps you shouldn't compensate all candidates, or compensate them less. I didn't say anything about why someone should be compensated, just how, if someone wanted to.

As an unrequested piece of advice, 150 hires to an engineering organization sounds like a gigantic waste of money. Perhaps you should give me the project and see if I can deliver it better for 1/150th of the price.

You lost me at 'the project'. My primary point is that the recommendations in the article don't scale well, nor do many of the recommendations I'm seeing in here. Paying folks under the table with gift cards is very low risk on the order of tens of candidates. It's not on the order of hundreds or thousands, particularly if you're operating in a market that is already highly regulated financially.

Speak with an accountant. People cut 1099-Miscs very frequently.

Yes

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