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Comment by speedgoose | Hacker News Reader

I’m not a lawyer, but I have a vague idea about my rights and firing people to hire them as contractors instead is illegal in both jurisdictions I know, France and Norway.

Firing people to hire contractors instead is risky because you need a reason to fire people. The reason could be economical, but one could easily argue in court that if the company is hiring contractors instead, well, it was not the real reason.

The other reason could be personal. The employee is incompetent or toxic, for example, but if you get an offer as a contractor after, it sounds trivial to win a trial too.

I know the word is a bit a taboo, but I’m personally in a union, for scientists and engineers, and I would recommend people in USA to start considering thinking about perhaps potentially slowly improving their rights.

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This is illegal in Portugal. It's also illegal to fire someone based on the termination of a specific company role (assuming the company can do it, but this is another discussion) and then next hire someone else, contractor or not, for that same, or similar, role.

Hows that working out for Portugal‘s economy?

It would be very surprising if you believe labor protections are the root cause of Portugal's economic woes. Can you share how you drew that conclusion?

Not the person you’re replying to but I’m the US anti-union propaganda’s talking points do include “bad for the economy”.

Basically anything that hurts the top 0.1% is presented as bad for the economy. Which probably has a lot to do with how the economy is measured.

I wonder if they ever figure out how to stop the emigration from the capitalist hell-hole that is the US to the socialist paradise of Cuba (or pick any South American country if you prefer, most of them are socialist).

Its a real problem!

You're doing the talking points of an 18 year-old who just read some libertarian pamphlet.

https://www.bloomberg.com/news/articles/2022-11-04/americans...

In general, Europeans would prefer to not work and strongly support social safety nets. They "work to live" while we "live to work" with our protestant work ethic.

It's telling that America just gets richer and more powerful and Europe stagnates more and more.

Reap what you sow europoors. America shows you the power of the Protestant work ethic.

I hope this is a joke. It made me laugh, anyway.

In case you're actually curious to learn about thoughts in this direction, see the paper "Did the crisis permanently scar the Portuguese labour market? Evidence from a Markov-switching Beveridge curve analysis" at https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp2043.en.pdf

From the introduction:

> For many years, a key distinguishing feature of the Portuguese labour market has been its persistently high employment and relatively low unemployment, despite the high level of employment protection ... The crisis has now seemingly brought about an end to this striking feature of the Portuguese labour market: ... As a result, Portugal now [in 2017] has the third highest unemployment rate among OECD countries; ...

And the findings:

> The results show that the sharp outward shift in the Portuguese Beveridge curve was to a large extent driven by cyclical factors. However, it was compounded by some structural factors, namely, the relatively high level of employment protection together with the relatively high minimum wage ratio and the relatively generous unemployment benefit system.

This is really interesting. If I understand correctly, it's drawing conclusions about the unemployment rate since the financial crisis.

I'm under the impression that even before the financial crisis, Portugal was considered one of the "poorer" European economies, which is what I was getting at. But I see now the comment I was responding to may have been concerned with Portugal's _recovery_ since 2008.

I came here to say the same. In the UK you can't be made redundant if there is other work you could do at the company.

Also in the UK contractors are paid a lot more than full time staff!

> Also in the UK contractors are paid a lot more than full time staff!

low level staff maybe

the big earners in UK finance are employees

contractors don't get a bonus

Certainly industry dependent. OP is about 'big tech' though, not finance (proper fintech aside I suppose).

I think 'contractors are paid more' generally (and in fairness somewhat necessarily) ignores that it's to compensate for other employee benefits. But it's ultimately a kind of pointness/trivial truth - 'the value of holiday and sick leave and job security and life assurance and pension contributions and [...] is non-zero!' - yes, of course it would be.

It’s also true in general tech once you get to director or senior manager grade your short and long term incentive plans can be 50% of your BP and your BP isn’t going to be too shabby either.

Contractors do get paid more but they don’t earn more at least not anymore after IR35 since they have a tax rate that is over 50% as they are also liable for the 15.5% employer national insurance contributions now.

Overall contractors are far cheaper in the UK even at day rates of over £1000 and replacing people that earn high 5 to low six figures.

They aren’t paid any bonus, there is no pension contribution there are no benefits and there is no liability for redundancy.

All good points but it really does depend on the industry and the level.

I have seen mid level jobs where the contractor is paid twice what the full time staff are, no bonus on either side.

Your point about long term incentives is very dependent on company. I wish I had a scheme like that!

Long term incentives are pretty much stock options plus a bonus “top up” where X% of your bonus for the current year is paid to you again after Y years (usually 2 or 3).

Stock options are usually available at most large traded companies, bonus top ups are usually for directors+ or senior managers in FAANG or other large US companies that tend to have more grades than UK ones.

Then there are ofc various retention bonuses and allowances, but these tend to be pretty much just a pay increase without the social contributions liabilities to the employer.

You can contract outside IR-35 still, no? At least there were some advertised on LinkedIn last time I looked. If the contract is outside IR-35 then you can still claim expenses and pay corporate tax instead of (most) income tax.

Does anyone advertise 'inside' IR35? I get tonnes too, but it'd be at my risk not the, err, employer's.

I haven’t seen any company that will take contractors outside of IR35 at least in London for more than a year now.

The risk falls completely on the company these days. IR35 is a very nasty piece of legislation it’s difficult to even hire remote contractors outside of the UK with it without going through an established firm.

Shorter than a year suits me. My goal with contracting is to have time off between contracts to have more energy and time to bootstrap some business ideas. It is a shame this legislation passed, I understand the concern about hidden employees/tax dodging but it seems they overshot a bit.

I think GP meant not noticed any such listings in the last 12 months, not that they were advertising a post with a duration less than a year.

I didn't think he was advertising, but I did misinterpret it as him saying only shorter term contracts were available outside IR35.

Ha, sorry, 'they' there meant the listings, not GP. Isn't English wonderful.

You aren’t getting outside of IR35 contracts in tech anymore even short fixed term ones (as short as 1-2 months), especially with any company that can afford to pay rates that make it worth while.

If HMRC catches you in violation of IR35 they can open the book and inspect any contracts over the past 10 years and retroactively penalize you. And by you I mean the “employer” in this case as in the company that hired you under contract.

No one is taking the risk today.

Almost no company will take on that risk these days. You can still claim expenses within IR35 too the only difference is that you have to use an umbrella company for PAYE to cover the NIC liability.

I think it depends. Certainly as a banking PM what I earnt as a contractor (outside ir35) is more than I earn as a permanent employee, even with a bonus.

Are you sure about that? My understanding was that the role is made redundant, not the person; that you can't hire someone else to do what a made-redundant person was just doing (of course it pretty much happens, but on paper/in theory it needs to be different). I don't really see how it makes sense for both to be true.

And in your scenario, wouldn't voluntary redundancy get really weird? 'Denied - because you're qualified for a job in a different department. So keep doing your current one or resign.'

When a role is made redundant (in the UK) an employer has a series of steps they have to make. One of which is, if there is another role the employee could do then they have to be offered it. They can refuse of course. In your voluntary redundancy scenario the employee is waving their rights...voluntarily.

Have to be offered it, or just have to be considered for it? As in, if there's a better qualified person available at the same price (or for that matter you're making two roles redundant and either of those people could do this one other role you have open, but you don't need both) do you really have to give it to the otherwise redundant person?

Employees have basically no rights at all in the US. We started the labor movement, and have completely given up all rights over the last 70 years. It's a shame really.

Pretty sure you are mistaking rights with benefits.

If you really don’t know about your rights as an employee, you should be aware that US workers have many rights guaranteed by law.

Not as much protection as west Europeans, maybe! But the other side of the coin is that it’s so much easier to get hired, or start a business in the US. https://www.dol.gov/agencies/whd/workers

The question isn't whether there are rights guaranteed by law. It's whether or not those laws are actually applied. That's why it's national news that Amazon was found to have violated labor laws... in a single warehouse in New York.[1]

And that's before we get into intentional understaffing and industry capture of the US Department of Labor.

https://www.vice.com/en/article/xgdejj/amazon-repeatedly-vio...

Well, now you’re moving the goalposts. I’m not arguing that workers are never mistreated. I would agree, sometimes they are, and that is bad! But it’s overly hyperbolic to say that US employees have no rights at all. They do, just not as many protections as a few other countries.

As an hourly, non-exempt employee, I had a legal right to overtime, paid breaks, and unpaid leave and other things. DOL signs were posted at the workplace, as is required, to inform workers about their rights. My employer (Best Buy) followed the law and I appreciated those legal protections, which the employer otherwise probably wouldn’t have given me. This is an anecdote, but is an example of a worker (me) having rights.

To be clear, that’s the specific argument I’m making. American workers have some rights, regardless of whether they’re perfect, or perfectly upheld. That’s obvious, isn’t it?

In addition to this there are active measures to make unions completely powerless.

This however does not mean that unions are powerless.

I highly recommend Adam Conover’s interview with Jane McAlevey

https://youtu.be/nA2AMxRz0iA

Not when it’s at-will employment. You don’t need a reason to fire anyone in most states in US. Only exceptions are protected things like because of gender or race etc - but that is even blurry to prove it.

Unions are the only protection but companies do everything to burst unions e.g Starbucks and Amazon.

In the US at the Federal level the IRS and DOL have specific tests for contractor vs employee. If you hire contractors that are really employees they will come after you for misclassification. This is independent of State laws.

This is one of those things that's technically illegal in the US, but is selectively enforced when big companies don't donate enough to the mafia.

Specifically, the IRS can come after you for incorrectly/falsely classifying an employee as a contractor.

I think that's also illegal in Canada

Would depend on the province. Canada kinda sits between Europe and USA when it comes to worker rights.

You can always fire people without cause, but you would owe them termination and severance pay which positively correlates with (among other things) duration of employment and specialization.

The US has no such laws or restrictions. The only restrictions for firing in the US are with discrimination of protected classes.

This isn’t really true. Americans have more rights than they think.

It varies a lot, and can be confusing.

There’s an ongoing case about how venues like Madison Square Garden are using facial recognition to deny entry to employees of law firms suing them.

There are laws in place to protect theater critics. Those laws stem from an idea that it’s unlawful to prevent someone from earning a living/practicing their profession.

Many of those older laws are on the books.

There are strict anti blacklisting laws in many states.

Nothing you mentioned has any relevance to an employer firing an employee and rehiring them as a contractor, which is perfectly legal in the US.

This actually happened a lot after the ACA/Obamacare law went in effect a decade ago. Many employers were faced with the mandate to provide insurance for full-time employees and decided to fire/downsize those roles and hire independent contractors in their place (which did not need to have healthcare provided by the employer).

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