What’s a Freelancer, Anyway?

Labor law has not kept up with our changing economy.

Sarah Feldberg in CJR (“‘This could ruin us’: A class-action suit imperils California freelancers“):

Dynamex is shorthand for a class-action lawsuit in California about the employment status of delivery truck drivers. Last April, the state Supreme Court ruled unanimously that Dynamex Operations West, a package delivery company, had misclassified its drivers as independent contractors rather than employees. The ruling also covers exotic dancers, hairdressers, freelance reporters, and anyone else who works as an independent contractor (IC) in the Golden State. Heralded by labor groups as protecting the rights of vulnerable workers and confronting the abuses of the gig economy, Dynamex has also created widespread confusion about who’s exempt, who’s in trouble, and what the ruling will mean for freelancers. To say that it’s having an impact would be an understatement. People are freaking out.

One would think it easy to figure out who was an “employee” versus an “independent contractor.” But it’s actually quite complicated.

The ruling established an ABC test whose three parameters must be met for a worker to be independent under California wage orders that govern things such as minimum wage and overtime. Part A says that an IC must be “free from the control and direction of the hirer in connection with the performance of the work.” Part C requires the “worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.” But it’s part B that presents a problem for freelance journalists: someone is an independent contractor only if they perform work “outside the usual course of the hiring entity’s business.” In the archetypal example, a plumber fixing a restaurant toilet clearly qualifies. A freelancer journalist writing a column for a magazine? Not so much.

“B” seems like an unnecessary and harmful addition. In the case of a restaurant, there’s no sense in which a waitress could be an “independent contractor.” They could be full-time or part-time, based on whether they meet a time threshold. But it’s hard to fathom a test where they meet condition “A.”  But, surely, a cleaning crew that does jobs all over the city but comes to the restaurant for two hours every night can, in fact, be independently contracted even though the restaurant’s management sets conditions such as time.

A magazine columnist is indeed harder to fit into the framework. But there are plenty of people who have other jobs and yet turn in a column on a set schedule. A Paul Krugman, for example, can work as an economics professor by day and also turn in periodic columns for the New York Times. So long as he’s allowed to write for other publications, he’s surely a freelancer.

Yet, apparently, it’s not that simple.

While many media companies and publications seem unaware or unfazed by the ruling, others are severing ties to California writers to ensure compliance. Bell’s client, New Jersey-based Northstar Travel Media, which produces travel industry trade journals, has stopped working with a number of California freelancers. (Disclosure: I’ve freelanced for Northstar over the past four years, and transitioned to being a part-time employee in January.) San Diego journalist Randy Dotinga lost a potential public broadcasting client that suddenly announced a no-freelance policy post Dynamex. They didn’t specify the cause, according to Dotinga, but the timing suggested they might be spooked.

Cecilia Hae-Jin Lee, an LA-based writer and photographer, hadn’t given the ruling much thought until one of her long-time editors emailed to say they couldn’t keep working with her. “I lost a regular client because of this,” she says. “They just blanket decided not to hire any California freelancers.”

I reached out to Northstar, Thomson Reuters, and the Editorial Freelancers Association to ask about Dynamex, but all three declined to comment for this piece. The Los Angeles Times, Freelancers Union, and News Guild didn’t reply at all.

California isn’t the only state with an ABC test. The ruling was based on a Massachusetts statute that sets roughly the same parameters, but when I tried to find a Massachusetts writer who was aware of the law—let alone affected by it—I came up empty. Boston University School of Law Professor and employment law expert Michael Harper attributes that to alarmism in response to the new standard. Among “high-skill” industries, he says, “it would have to be used by the workers against employers. If it’s a relationship that people are happy with. . . they’re not going to bring a case.”

Dotinga is alarmed. A former newspaper reporter who has freelanced full time for the past 20 years and previously served as the president of the American Society of Journalists and Authors, Dotinga has been working with a coalition of 16 national non-profit groups that represent professional creatives to draft a letter to legislators explaining the impact of Dynamex. “For all of us who are freelancers, this could ruin us,” Dotinga says. “We could be unable to find work. It’s potentially really devastating.”

Exemptions to the wage orders—and therefore Dynamex—already exist, granted to some “professionals” such as doctors and architects and “creatives” such as artists. Writers fall into a sort of gray zone—not explicitly exempt and not explicitly subject. Brigid O’Farrell, with the Northern California chapter of the National Writers Union, says the organization supports the Dynamex ruling, but is also concerned about its effect on freelance creatives who satisfy all but Part B of the new test. Along with Dotinga, the NWU is working on specific language that would protect independent writers who are truly independent.

Obviously, there’s plenty of room for abuse in a “freelance” system, even for creatives. Lots of web-based media companies rely on very-low-paid writers and want to keep them classified as part-time or contract labor to avoid paying expensive benefits. But the “A” part of the test would seem sufficient there: if the outlet is requiring full-time production, directing the content of the work, demanding X number of pieces per day/week/month, then the workers aren’t true freelancers.

California Assemblywoman Lorena Gonzalez, who’s sponsoring a bill that would codify Dynamex as law, has met with the group. Gonzalez says she’s concerned that workers are covered with protections like health insurance, disability, and worker’s compensation; that employers aren’t shifting those costs to the state; and that contractors have the power to dictate the terms of their work. If freelancers satisfy those stipulations, then Gonzalez gives it a green light. “In those situations they’re acting like a tiny little business, and I think that’s how independent contractors are supposed to work,” she says. When it comes to a blanket exemption, though, she’s less convinced, pointing to the potential for freelancers to break a union or for companies to hire permalancers in place of employees.

The most coveted freelance gigs—recurring columns or features that journalists can count on month after month—seem especially vulnerable. Gonzalez says she’s less concerned about journalistic piece-work. However, when a magazine uses a freelancer to write weekly movie reviews or a photographer shoots exclusively for a single paper, she asks, “Doesn’t that start to feel like they’re actually misclassified?”

Yes and no.

The weekly movie reviewer seems straightforward enough: unless you’re Roger Ebert or Leonard Maltin, writing a weekly column seems like the classic freelance assignment. We’re talking a very small commitment of time and extreme flexibility.

A photographer (or anyone, really) who is only allowed to work for one employer is almost by definition not a freelancer. A Peter Parker making a few bucks on the side selling photos to the Daily Bugle to make some spending money while in school wouldn’t expect to be paid a full-time salary or benefits. But one would presume he could take his pics to the Daily Globe if he got tired of J. Jonah Jameson’s attitude—or sell the ones that Jameson didn’t want.

“Freelancing gets a bad rap,” Dotinga says. “The fact is a lot of us do really well, and we do have a lot of job security. I’m sure if I had been a newspaper reporter for the last 20 years, I would have been laid off a few times. For me, being a freelancer is the way I’ve been able to continue being a journalist.”

I’m not sure I’ve ever seen “freelancing” and “job security” in the same sentence, at least not in a positive sense. But one presumes that the very best have enough demand for their work that they can keep the money rolling in. It strikes me as a brutal way to make a living but they ought to have a right to do it.

In the wake of massive media layoffs earlier this year, the same thing is true for many former newsroom staffers, though the ability to outsource content—and the accompanying payroll taxes—could also be a factor in declining editorial jobs.

That, of course, is the flip side of the coin. Demanding that all journalists be freelancers is to remove job security for all but the very top tier.

Harper, meanwhile, wants to apply his own ABC test to me and this assignment.

“When you say you’re writing a story, does that mean they’re paying you?” he asks.

Yes, I tell him. I pitched the story, agreed upon a rate, and set a deadline, made a one-time deal for this article without restrictions on what I can write for anybody else. CJR could kill the story, or I could pull it myself with no repercussions beyond a bridge burnt and a missing paycheck.

Satisfied, Harper says that I sound like an independent contractor. “But,” he sighs, “I understand how lawyers could make them nervous.”

Obviously, this isn’t the sort of thing that should be sorted out on an ad hoc, post hoc basis through the courts. The laws are simply behind the times, not having kept up with the changes in the economy over the last quarter century or so.

While I’ve done quite a lot of freelance writing over the years, little of it is paid. Even prestige outlets tend not to pay for public policy commentary. There’s a lot of controversy over that fact, in that it means that people like myself—who are paid a living wage by a university, think tank, or other institution—are driving down the price that independently freelancers are able to charge for their work.

In my main line of work, university teaching, we’ve seen over the course of a generation or more the driving out of full-time professors with adjuncts. Once upon a time, adjuncts were essentially freelancers. Usually, they had a full-time job in business, government, a think tank, or whathaveyou and taught an occasional class on the side in an area of especial expertise. For example, when I was teaching at Tennessee-Chattanooga way back in 1995-96, our small political science department had a longtime local politician teach a local government course and a sitting judge teach a constitutional law course. They supplemented the curriculum teaching classes none of the existing policy were especially qualified to teach for whatever satisfaction they gained from “giving back” and interacting with young people and made a few bucks for their efforts.

Gradually, though, university bean counters realized there was a veritable army of people out there with PhDs who couldn’t find full-time employment and would be happy to have a few bucks thrown their way to keep the bills fed while they built their CVs with teaching experience. Many adjuncts were teaching a more-than-full-time load at a number of schools in a given area at a well-below-full-time wage. They were clearly independent contractors by the A and C parts of the test but, rather clearly, not B.

Now, more than three-quarters of university teachers are “non-contingent”—a term that encompasses all faculty in positions not eligible for tenure. More than half of those are adjuncts, who are part-time at a given institution (but may be full-time or more-than-full-time when cobbling all their gigs together).

Some of these developments, in both journalism and academia, are lamentable. It’s not obvious to me to what extent they need to be addressed by new laws, let alone what those laws should look like. As the Dynamex outcome demonstrates, attempts to make things better can have unintended consequences that are exactly the opposite of the desired effect. At the same time, employers shouldn’t be able to skirt the intent of employment laws by creating pretend “exempt” or “contract” workers who are anything but.

FILED UNDER: Economics and Business
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Stormy Dragon says:

    Perhaps an alternate formulation of part B would solve the problem: if the business is responsible for more than 50% of the employees annual income?

  2. Dave Schuler says:

    Can a professional ever be anything other than an independent contractor under the ABC rule? Consider a physician working in and for a hospital. In principle at least the physician is “free from the control and direction of the hirer in connection with the performance of the work”. The hospital does not control the physician in connection with the performance of the work. That is governed by the standard of care and the physician’s own professional judgment. Anything else would be actionable.

  3. Sleeping Dog says:

    The IRS has a similar test to differentiate contractor/employee and if I remember correctly from quickly resolved controversy that I was a party too, it is more of a 10 step qualification. It also appears to me that the IRS only invokes this test if there is a complaint.

    Given that an increasing number of businesses are trying to eliminate employees, this is an important issue.

  4. Michael Reynolds says:

    The overuse of free-lancers allows the rich to screw working people. It is of a piece with the demonization of unions and right-to-work laws. The machine churns away, night and day, forever searching for new ways to make the rich richer, and the poor poorer. Every day and in every way the American economy looks for ways to screw working people.

    I’ve been a free-lance for a good 30 years now. It’s worked for me, but I am an outlier. Now I’m starting to edge my way into Hollywood writing and this is a union town. They have rules and regulations and limitations. Here they get paid for a rewrite, in publishing you can get hit with months of rewrites and end up not being paid a penny. Things are extremely uncertain, and I’m not counting chickens prematurely, but there may be two paths I can go by, one which leaves me a a free-lance, while the other path would turn me into an employer of sorts, an employer of union members. My personal predilection is always to stay independent unless, you know, money.

    The barriers to entry into legit NY publishing are lower than the barriers in Hollywood, but still quite high. The job insecurity in legit publishing makes driving for Uber look like a civil service career. Once you are in the WGA west I believe you have a better shot at staying employed than you do writing for Harper or Random, plus you get a health plan and there’s a shot at unemployment insurance. Basically, as in all of the gig economy, a free-lance scrapes by on his own with no support, no security, no insurance, and endures frequent episodes of rough anal.

  5. Sleeping Dog says:

    @Dave Schuler:
    An Employee if: The physician is paid a salary. The physician must abide by the work schedule set forth by the hospital and the physician must work in accordance with the policy and procedures of the hospital.

    A Contractor if: The physician has admitting privileges and only follows those patients that he/she has admitted.

    A hospital may also contract with a specialist such as a surgeon, to provide a specific service at a specific time, but a specialist could also be an employee. Nothing is black and white.

    For 15 years I was a sales person for a tech company, left them and a few years later started a rep/consulting agency where one of my partners was my former employer. I’d find them business and they paid me a commission. I had 5 similar partnerships with differing tech firms. I had my own brand, website and filed a Schedule C, pretty much defined me as an independent contractor.

  6. James Joyner says:

    @Stormy Dragon:

    Perhaps an alternate formulation of part B would solve the problem: if the business is responsible for more than 50% of the employees annual income?

    It’s not the business’ fault if the contractor has trouble finding other work. If I run a magazine or newspaper and find a blogger whose movie reviews I like, I shouldn’t be on the hook for his medical benefits if I’m paying him $1000 apiece for twelve monthly or $500 apiece for 52 weekly columns. He hasn’t transformed into a full-time employee by virtue of not finding other takers for his talents.

    @Dave Schuler: I think I agree with @Sleeping Dog‘s formulation as to what the distinction should be. I have no idea whether that’s the legal standard.

    @Michael Reynolds:

    The overuse of free-lancers allows the rich to screw working people.

    Absolutely agree. The question is what constitutes “over-use”?

    Back when OTB was making enough money to exceed operating expenses, I paid out shares to writers, who I treated as “contractors” for tax purposes. Aside from the old “Gone Hollywood” site, which was a money grab rather than a hobby, I never promised anyone cash or had anything resembling a real contract. I didn’t see any moral problem with that arrangement. OTOH, Huffington Post, the Gawker machine, and many others essentially had a massive workforces under rather tight restrictions in terms of output and the like and did the same thing. They were clearly skirting the spirit, if not the letter, of employment law.

  7. Stormy Dragon says:

    @James Joyner:

    It’s not the business’ fault if the contractor has trouble finding other work.

    I’d like to note the underlying assumption that expecting businesses to treat their employees justly is some sort of punishment.

    He hasn’t transformed into a full-time employee by virtue of not finding other takers for his talents.

    Nice job sneaking “full-time” into the conversation. The question isn’t whether the writer is a full-time employee, it’s is they’re merely an employee. And yes, if you hire a writer who no one else is paying to write, they may very well be your employee.

  8. Kathy says:

    This is a more widespread problem that just the US.

    In Europe, for example, Ryanair, the ultra-low cost airline, employs no pilots at all (or very few). They’re independent contractors instead. This doesn’t mean only a lower salary (ultra-low cost, remember?), but the pilots are also saddled with forming a company to employ themselves, and managing the taxes involved.

    The paradigm of benevolent capitalism, holds that companies hold their costs down in order to offer lower prices and make profits, meanwhile also providing employment to millions of people.

    This assumes way too much. Like the employment provided is well-compensated, or that the people who own the companies are not driven to earn exorbitant profits at all costs.

    If that was ever true, it isn’t any longer.

  9. MarkedMan says:

    @Sleeping Dog: Exactly. The Physician one is actually pretty clear cut, as more and more doctors abandon their own practice and the endless paperwork and office management that entails, and join practice groups or become hospital employees.

    The fact that a hospital can’t tell an employee doctor how to treat a patient (setting aside the fact that yes they can, and yes they do) isn’t any type of an outlier. I work with people whose primary responsibility is regulatory compliance. They are obviously employees but the company cannot tell them how to decide a regulatory issue. Same for quality control and manufacturing. They can literally go to jail if they “follow orders” (and it happens in real life). Accountants fall into the same group. Pilots. Boat Captains and senior officers.

    I’m with Michael on this one. The rules aren’t really that complicated (and I’ve had to make sure we were compliant in several different states.) What is complicated is when you try to game the system so that you don’t have to pay decent wages or benefits. You gave the example of the cleaning people. Sure, if there are cleaning people that move from company to company all day and all week long, they can be viewed as working for an independent contractor. But say, Microsoft, has tens of thousands of people who clean, and guard the doors and cook in the cafeterias. They show up in the same place every day and the only work they do is solely in support of Microsoft. Yet Microsoft goes to great lengths to claim they are not employees. Not just cleaning people either, programmers and engineers too. One example: you can’t invite a contractor to the Christmas party. The last time I worked for a major corporation I cancelled our nice Holiday party and had a much cheaper one that took place in the office. The reason? We had three long term contractors that had been there longer than most of the employees, working side by side on the exact same stuff and I was told in no uncertain terms that we could not spend one single cent of company money bringing them to the Holiday party. When I said I would pay for them out of my own pocket, I was first told that would fly but only if I made it clear to everyone involved that it wasn’t company money (excruciatingly embarrassing for all parties) and then Legal finally said no, even that would be “risky”.

    In that case it wasn’t really a cost savings issue that kept them as contractors but rather that they weren’t counted as a head count increase but rather as a project expense. No US CEO in their right mind will let head count creep up on their watch (startups aside, of course) or the investor community will massacre them and the McKinsey people will start having whispered conversations with the board.

  10. James Joyner says:

    @Stormy Dragon:

    I’d like to note the underlying assumption that expecting businesses to treat their employees justly is some sort of punishment.

    I’m contending that someone hired to do a project isn’t an employee and that it isn’t unfair to consider them otherwise.

    And yes, if you hire a writer who no one else is paying to write, they may very well be your employee.

    That’s a bizarre notion. And one that will have the perverse effect we’re seeing in the CJR story: people refusing to hire these people on a contract basis lest they somehow be transformed into employees. Someone’s services might well be worth, say, $500 for the particular article/column/whatever and not worth paying Social Security taxes, health insurance, etc.

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  11. Gustopher says:

    Single payer health care would go a long way towards reducing the incentives for companies to play classification games.

    We put a lot of demands on employers that end up having unintended consequences. And there are all sorts of things that kick in once they hire their fiftieth worker, which encourages finding ways to ensure that everyone is a contractor. 401k access is similar.

    I’m not a big fan of the “unshackle businesses” arguments, but maybe we want to move some of this onto the public sector, where it isn’t being implemented by someone who has a financial interest in not doing so.

    And make a lot of the 50+ employee regulations just always apply (I would not be opposed to paying the small businesses that end up with a larger than expected financial burden from that). I think this is chunks of the FMLA and ADA that cut it at 50, plus the ACA.

  12. Gustopher says:

    @MarkedMan: I was at a company that had a few contractors doing the exact same job as the employees.

    We had a weekly employee meeting where the contractors were not present, where nothing happened other than someone carefully preparing meeting notes listing the attendees.

  13. Stormy Dragon says:

    @Gustopher:

    I do not want my 401k in the government hands. There’s too much temptation for legislators to start siphoning money out of it to pay for short terms spending, know that by the time the bill comes due, they’ll be long gone.

  14. Jen says:

    I’m a freelance writer, who makes a fairly solid living doing what I want to (writing) from home. When I saw this headline, I figured it was about the epicurious blow up from a few days ago, where they posted a job online for a “full-time freelancer” to fill the “assistant editor” position. Listed below was a job description that looked like the job responsibilities of not one, but two full-time positions.

    “Full-time freelance” that commands all of your hours isn’t really freelance at all, it’s being an employee without benefits. This apparently ran afoul of NY State’s labor laws, and within 24 hours there was a “clarification” noting that the job would in fact be eligible for benefits.

    I have control of my time, and multiple clients. I am not bound to just one. Healthcare I am fortunate to be on my husband’s policy, but agree completely with @Gustopher that having health insurance that wasn’t employer-dependent would be wonderful. I know far too many people who are languishing, leading Thoreau’s “lives of quiet desperation” in jobs they hate because they need the healthcare and can’t risk taking a chance on an entrepreneurial venture.

  15. Stormy Dragon says:

    @Jen:

    I know far too many people who are languishing, leading Thoreau’s “lives of quiet desperation” in jobs they hate because they need the healthcare and can’t risk taking a chance on an entrepreneurial venture.

    Which is going to always be the case. No matter how we organize society, someone is going to have to go around and pick up the trash and whoever it is is not going to be doing it because they’re deeply passionate about garbage.

  16. Jen says:

    @Stormy Dragon: That’s a little different than what I was getting at, because I agree with you.

    The point is, the ONLY reason I am able to do what I am doing is because I have health care access through a spouse. Were I not married and therefore able to access health coverage through my spouse, I literally would not be doing this–I couldn’t, because an individual policy would not be affordable (I’ve done that once before in my life, when working as a temp, and an individual policy ate up nearly half of my monthly take-home pay–I was only able to do it then because I was living with a relative.)

    Yes, there will always be jobs that are dull and the need for people to do them–but, with automation getting better, more of those jobs will become automated. We need to figure this healthcare thing out, and fast, because it’s not going to be sustainable for future work/employment practices.

  17. DrDaveT says:

    @James Joyner:

    I’m contending that someone hired to do a project isn’t an employee

    Since when is a weekly column for an indefinite term “a project”?

    If the person paying you can tell you when they expect you to work, what they expect you to produce, and how long you have to get it done — without writing and signing a separate contract for every deliverable — you’re an employee.

  18. James Joyner says:

    @DrDaveT: I’ve been a defense contractor, which met all of those requirements, and wasn’t at that point an employee of the Defense Department. I’ve also had an agreement with a national security magazine to produce three columns a month at a given per article rate. I wasn’t an employee of the magazine.

  19. Stormy Dragon says:

    @James Joyner:

    I’ve been a defense contractor, which met all of those requirements, and wasn’t at that point an employee of the Defense Department. I’ve also had an agreement with a national security magazine to produce three columns a month at a given per article rate. I wasn’t an employee of the magazine.

    How much would you charge to write an article about the definition of “begging the question”?

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  20. DrDaveT says:

    @James Joyner:

    I’ve been a defense contractor, which met all of those requirements, and wasn’t at that point an employee of the Defense Department.

    Most defense contractors are employees of some company like SAIC or Booz-Allen or Parsons (for services), or Boeing or Lockheed-Martin or Raytheon, etc. Being a self-employed defense contractor is quite rare. Defense contractors are not, by definition, employees of DoD.

    What did your contract with DoD say your duties and deliverables were? For what period of time? I’m guessing that it was not open-ended and indefinite…

  21. DrDaveT says:

    @James Joyner:

    I’ve also had an agreement with a national security magazine to produce three columns a month at a given per article rate.

    For what period of time? One year? Five years? Forever?

    I wasn’t an employee of the magazine.

    If the term of the contract wasn’t fixed, you were an employee, except they were ripping you off by pretending you weren’t.

  22. James Joyner says:

    @DrDaveT:

    Most defense contractors are employees of some company like SAIC or Booz-Allen or Parsons (for services), or Boeing or Lockheed-Martin or Raytheon, etc. Being a self-employed defense contractor is quite rare. Defense contractors are not, by definition, employees of DoD.

    Right. I was an employee of a small contracting company.
    @DrDaveT:

    If the term of the contract wasn’t fixed, you were an employee, except they were ripping you off by pretending you weren’t.

    There’s no sense in which I was an employee of the company. I was making a living as a think tanker and writing articles, mostly for free, for a variety of outlets including that one. The publisher liked my work enough that he wanted to incentivize me to send more of it his way for a modest stipend. How was I being “ripped off” by getting a few hundred bucks to do something I had previously done for free?

  23. Stormy Dragon says:

    @DrDaveT:

    Being a self-employed defense contractor is quite rare.

    Not as rare as you might think. A lot of defense contracts have a “small business set aside” requiring a certain percentage of the work be subcontracted out to businesses with less than 250 employees. Senior employees at large defense contractors often leave to form a one person LLC, which then gets hired as a subcontractor at their old employer to fulfill these requirements.

  24. DrDaveT says:

    @James Joyner:

    I was an employee of a small contracting company.

    Then the point of your reply eludes me completely, because the discussion was entirely about people who are being treated as if they were independent contractors when they are really employees. You were explicitly being treated as an employee.

  25. DrDaveT says:

    @Stormy Dragon:

    Senior employees at large defense contractors often leave to form a one person LLC, which then gets hired as a subcontractor at their old employer to fulfill these requirements.

    Yeah, I’m familiar with this. The silly small business preference laws make this a lot more common than it should be, but they’re still a tiny fraction of all contractors. They’re also a lot less likely to be treated like employees-without-benefits than (say) freelance writers.

  26. James Joyner says:

    @DrDaveT: Fair enough. But it’s a weird existence in that I was on-site in the DISA offices and essentially treated as a DISA management analyst, with my daily schedule and assignments at the behest of a GS-15 and her GS-14 deputy. I worked for my contracting company in the sense that my salary and benefits came from them but in any other way I was indistinguishable from a civil servant. But, yes, it’s still different from being a freelancer.

  27. MarkedMan says:

    @James Joyner:

    How was I being “ripped off” by getting a few hundred bucks to do something I had previously done for free?

    If we are talking about a few hundred dollars than no one cares. But there really is some “begging the question” going on here, on all our parts. And that question is “Why are employers so anxious to say someone is an independent contractor rather than a part time employee?” Lots of companies don’t offer benefits at all, and many more don’t offer benefits to a part time employee. The real issue is the “invisible benefits”. There is an employer share of FICA and (whatever the other one is). There are state run unemployment insurance. There are obligations in some states about sick leave and there are federal requirements for family leave and so forth. The employers are taking advantage of a loophole originally meant for things like James Joyner calling a plumber and not wanting you to be burdened by having to register as an employer. They are using every legal trick in the book to get out of paying these fees and pushing that burden onto the employee. (There are other reasons to pretend you are not an employee, but this is the big one.)

    James, you are getting hung up on what “feels” like being an employee to you. But from the governments point of view, these taxes need to be paid. The rule is simple: if someone gives you a regular paycheck or even a large lump sum, then you are an employee for the purposes of the taxes and so forth. No one cares if you are a sub-contractor because you are still working for a firm and that firm is taking care of it. The problem is if you are truly an independent and are supposed to be paying all this yourself. (Did you pay the self employment tax on the few hundred dollars?) The IRS can go after the “contractors” one by one, or they can go after say, Microsoft, and challenge the categorization of tens of thousands of employees as a independent contractors.

  28. James Joyner says:

    @MarkedMan:

    They are using every legal trick in the book to get out of paying these fees and pushing that burden onto the employee.

    Right. That’s the problem at the heart of the post. Most of us recognize that there’s a problem with defining “independent contractor” and that employers have every incentive to scam the system. At the same time, declaring everyone an “employee” means that a lot of legitimate freelance work will go by the wayside.

    @MarkedMan:

    The problem is if you are truly an independent and are supposed to be paying all this yourself. (Did you pay the self employment tax on the few hundred dollars?)

    My taxes are weird in that I’ve generally had both a standard paycheck plus various outside independent income from blogging (alas, not anymore), outside writing, and various other small stipends. I had “Joyner Consulting” and then “OTB Media” as notion entities but file one tax return as an individual/sole proprietor. When there was more blogging income, I filed quarterly estimated taxes but now I’m losing more than I’m making on the site so don’t bother. I’m not sure how FICA works on the non-salary income but presumably the accountant is following the tax laws.

  29. MarkedMan says:

    @James Joyner:

    declaring everyone an “employee” means that a lot of legitimate freelance work will go by the wayside

    I don’t see why this is true other than inertia. In this modern age no one does payroll by hand anymore. No one is filling out W2 forms with pen and ink at the end of the year and sending them off to the IRS in registered envelopes. It’s all done automatically and electronically. Adding someone as a part time employee is pretty simple and the withholding and everything else is automatic. If there was some burden attached to this I’m sure that there are many many congressmen who would sponsor all kinds of legislation for speeding up the process and making it less burdensome.

    And truth be told, we have to admit that there are a lot of freelancers who are happy to take the whole check with nothing withheld and not file it as income, hoping they don’t get caught. These guys are also part of the problem, but they are foolish. Whenever I do work for just about anyone, I get a 1099-MISC. If the IRS isn’t using software to check the payers 1099-MISC against the freelancers now, I don’t know why. But it won’t be long before they do. Having the taxes withheld and getting the W2 at the end of the year is actually the smarter move.

  30. James Joyner says:

    @MarkedMan:

    we have to admit that there are a lot of freelancers who are happy to take the whole check with nothing withheld and not file it as income, hoping they don’t get caught. These guys are also part of the problem, but they are foolish. Whenever I do work for just about anyone, I get a 1099-MISC.

    The IRS is cracking down on this. I’ve always declared every nickel of income and claimed every legitimate expense I could. In recent years, pretty much everyone has sent me a 1099. And, for a brief period, my accountant was making me 1099 writers at OTB and elsewhere, along with various contractors for IT support and the like.

  31. DrDaveT says:

    @James Joyner:

    At the same time, declaring everyone an “employee” means that a lot of legitimate freelance work will go by the wayside.

    Could you unpack this a bit? I’m not seeing the mechanism. As @MarkedMan notes, it’s not that hard.

    …unless you mean that companies will simply do without content that they can’t get by ripping off regular contributors and the tax system. Are you making an argument analogous to the argument against minimum wages — namely, that such laws improve conditions for the employed, but reduce employment? (Certainly employers also game the system to avoid having to pay minimum wage — the treatment of minor league baseball players by MLB has been in the news lately in that regard…)

  32. James Joyner says:

    @DrDaveT: I’m thinking of the situation described in the CJR article. Companies aren’t going to be willing to go one the hook for benefits and such for true freelancers who write an occasional article.

  33. DrDaveT says:

    @James Joyner:

    I’m thinking of the situation described in the CJR article. Companies aren’t going to be willing to go one the hook for benefits and such for true freelancers who write an occasional article.

    I don’t see why they would need to. It’s pretty clear to me that “an occasional article” sold to this or that publication falls under the “artistic work” exemption. As noted in the article, it’s not like the genuine freelancers involved are going to be suing to be treated as employees. It’s only the de facto employees getting the worst of both worlds — the freedom of an employee and the compensation of a freelancer — who would bother to complain.

    I was amused that you cited Krugman. It’s not at all obvious to me that he is “surely a freelancer”. The details matter. Does he determine how often he submits material? Is the NYT’s ongoing publication of his column dependent on his providing a certain amount of material per month? Does his compensation depend on meeting deadlines? Does he have restrictions on also submitting to (say) the WaPo or New Yorker or The Atlantic? If so, I’d say he’s a de facto part-time employee.

  34. MarkedMan says:

    @James Joyner:

    Companies aren’t going to be willing to go one the hook for benefits and such for true freelancers who write an occasional article.

    I’m not sure why these wouldn’t be considered part time employees without benefits.