Would this not be a big flag to reclassify these contractors as employees? Being able to have multiple clients is one of the factors to determine if you're a contractor...
One of criteria is right to subcontract and freedom to work with multiple clients.
If they get it wrong, they're liable for taxes, not the Contractor.
HMRC, the UK tax body is responsible for this, and therefore it is an utter mess in practice and has had chilling effects on the UK IT consulting market.
Of course, idea and execution are two very different things.
In NZ, it's often found in courier companies and telecommunications, where you're an owner-operator! Except you have to do what the company you work for says, when they say, and you have to provide all your own equipment, and of course, pay for your own sick leave, accident insurance and holiday pay. And no you can't work for a competitor, are you nuts?
At one point our tax department started cracking down on this, then stopped, I'm not sure why. But it needs to be done.
And let's not even discuss the infamous Hobbit law, where a right leaning government passed legislation under urgency to make all film industry employees contractors, with no rights to unionise, to keep Peter Jackson (he can get the Sir back when he redeems himself in my mind) and Warner Brothers happy after Jackson's Weta Studios lost an Employment Court case brought by a "contractor" who they very vigorously treated as an employee.
Around here (Poland) they tried to focus the crackdown on... contractors, planning on requiring a contractor to have at least 25% of their income from a second client to be considered self-employed and not an employee.
The local IT lobbyists had a hearty laugh about this idea and that was the end of it.
So you see contractor job ads prominently listing "outside of IR35" as a benefit.
When this was implemented I know people who actually quit because they were told they would be within IR35 from then on, and they found new contracts outside of IR35.
In IT/tech people go the contracting route for the money so unsurprisingly they follow the money...
In UK (and Aus), this whole IT/dev contracting business is kind of win:win (govt. loses) though - devs like it because they get paid $$$ day rates and pay less tax, businesses like it because... capex vs opex(?).
In general, though some people prefer to be contractors, these rules are in place because some employers try to classify de facto employees as contractors to avoid paying taxes or providing required benefits. Google, FB etc have complex contractor rules for their third party contractor agencies to steer clear of that and make sure they save on taxes and benefits.
Note that security guards can be structured as contractors despite obviously not being able to choose where or when they work. There's a big list of things that "weigh in favor" of one status or the other. There aren't definitive answers unless you've recently won a lawsuit against the government (which always wants employee status for everyone).
I'm the UK, a "contractor" is typically in business on their own account, applying for jobs directly to the end client.
In the US, it seems like a "contractor" frequently works for an outsourcing company. In the UK we'd typically call these people "temps" or "consultancy staff" depending on the source.
I have worked on long contract - one or two years - for clients in the past helping them structure and put in place large projects and while I was technically there full time it was pretty clear that this was temporary, I was filling a punctual need the business wouldn’t have after and there was a somewhat clear idea of when we would part.
These relations are not necessary a way to pay less or not give benefits. I was actually paid a lot better than if I had been working there.
I think contractor is still used in that case in the UK sometimes too. The obvious example being construction firms.
At least in the IT industry people legitimately had some freedoms. I was amused to learn that a lot of lorry drivers were operating as contractors outside IR35. Not even those driving their own vehicles. The driving regulations make it pretty difficult for one driver to do anything different from another driver.
I’m a contractor, and for many companies and recruiters it was a wink wink nudge nudge arrangement to keep a gravy train running. An element of that will return when the reform is scrapped.
> One of criteria is right to subcontract
It's not entirely true. Just because such right exists in the contract, does not mean it is valid. HMRC guidances have a ton of rules where it does not count. For instance if the business could use the sub-contractor directly.
> and freedom to work with multiple clients.
This is also irrelevant, because exclusive supply agreements is a normal business practice. Also people can hold multiple employments and that does not make them "contractors". People can also be contractors and employees at the same time and anything in between.
> If they get it wrong, they're liable for taxes, not the Contractor.
That's not entirely correct either. The client can claw the money back from the Contractor and very much every contract I have seen has clauses ensuring that any unpaid tax the client is liable for will be re-paid by the contractor.
Assuming, of course, that Truss does not repeal the repeal. It's not like she is known for doing screeching U-turns...
But taxes on dividends got higher and higher in recent years.
You can still work for years in the UK, accumulate money (or real estate / other investment) in the company - then you move to Dubai and withdraw dividends tax free.
You end up paying 19% corp tax rate on your income that you can access only after you're done with the UK - which is not great compared to lower taxed countries in Europe (Malta at 5% being the best), but you get access to the London only jobs which pay a bit more (even if now that's not really true in a post remote working world).
Definitely better than getting equivalent salary and being forced to stash money in a pension you'll see when you're 60 or pay 40% taxes
The customer gets a refund, but has to charge their own customer VAT on the full amount of the goods they are selling, so the VAT accumulates until it is paid by someone who cannot claim the VAT back
That's why it's called "value added tax" - each supplier in the chain generates VAT on the value they add.
Tell that to all the contractors that had HMRC tribunals pre reform.
not anymore
You can only use the data for the purpose you originally stated, and this is not it.
This is actually much more of an issue than someone just holding two W2 jobs, because these "contractors" are almost always billing hours, and if you're billing the same hour to two people that very quickly approaches actual fraud.
The catch however, is that this doesn't necessarily absolve Equifax of miscategorizing workers -- this was the subject of the famous Microsoft Permatemp lawsuit. It is possible for a W2 worker of a temping agency to also be considered a common law employee of the contracting corporation. In Vizcaino v Microsoft, the temps were found to be Microsoft employees -- even though they were also w2 employees of third party staffing agencies.
https://en.wikipedia.org/wiki/Permatemp#Vizcaino_v._Microsof...
Edit: I was under the impression being a contractor would give one flexibility to do whatever they want when they’re not billing hours, depends on the contract wording of course
1. Paying a business attorney in your state upfront for q&a is cheaper than paying them later when things go wrong.
2. Please don’t get your legal advice from HN.
But yeah. Call a lawyer… Preferably well before you need one in a hurry.
If you’re breaking zero laws, stop.
This. Also, as a contractor you can generally be let go with no reason and little notice (also depending on the contract).
Of course that cuts both ways; if you have multiple clients you can also jump ship quite easily.
In probably 47 other states you could be fired for your activity outside of work even without a conflict of interest.
They could terminate them if they could show that the contractors were faking the hours.
A better remedy would be to fire the contract partner if you feel the work isn’t meeting the value you expect.
If you read the article and look at the differences, they fired the Equifax employees outright. They "flagged" a bunch of contractors. That almost certainly means they sent that list of contractors to their employer companies and requested additional verification of hours and/or requested they be removed from their projects.
Most contractors I know take on many clients.
This is very common misconception. People can have multiple employers just like contractors can have multiple clients. It has no bearing.
https://www.irs.gov/businesses/small-businesses-self-employe...
> Services available to the market
Does not mean the business cannot have a one client at a time.
But it does mean that. If you aren't free to seek business opportunities, your services aren't available to the market. It's a factor, not the factor.
(Famously, this made Uber grant some rights to their drivers here.)
If you are an actual employee of mine it's even more likely you are in breach.
No employment contract or agreement I've ever seen has prohibited someone from holding two W2 positions. Competing, sure. Sharing trade secrets is already illegal. Double-billing hours (e.g. on invoices or hourly work) is already illegal.
You're falling into a number of traps, not the least of which is thinking anyone who does contracting would ever agree to 50h/wk for a single client. "I'd be right more than I'd be wrong" is not sufficient justification to put additional requirements on a contract that almost certainly were not there to begin with.