I really hope I'm reading that wrong. I might want to do work for a California company one day ;-)
"control and direction" - sure, they give you direction. But do they control what tools you use, when and how you do it?
"connection with the performance of the work" - Are they controlling the final deliverable, or the performance, again, as in when and how the work is done?
I suspect that software consultants have a reasonable argument that they control their own work, while their clients have control over the acceptance of the final deliverable, so the above points are not fulfilled.
Edit: And for B, it just seems like having a 2nd client would fulfill that criteria. Your 2nd client is outside usual course of the 1st clients business.
What if the consultant is forced to attend every single meeting the client (via PM/other manager) decides to schedule? That seems to violate the spirit of "control over performance" part of it.
Curious because it is recently relevant to me..
The items are already part of California's contract law well before this current gig economy bill.
California classifies 'independent contractor' as [1]:
1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee's investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee's opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
The key line for software developers who are independent contractors is "Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;"
Contractors that work in a home office, using their skills to bring to a company for a project, at their own place, time and tools, that is an independent contractor.
It could be argued that drivers that own their cars, that can choose to accept or deny a particular task, without it hurting their competitive rating, could be seen as an 'independent contractor'.
I think the gig economy bill from OP is targeting known companies that are taking advantage of this by wanting 'independent contractors' that they can schedule and dictate their day and use metrics against them when they aren't available at the time. They should pay people as employees if they need people available then have contractors fill in when needed. This will probably lead to some fulltime Uber/Lyft and the rest floaters that can be like the current gig setup.
[1] https://www.dir.ca.gov/dlse/FAQ_IndependentContractor.htm
I'd make the guess that one could go into finer detail on what specific type of software development falls in-line with the daily activities, but software development in general might be too broad. An ecommerce company probably could argue php development is part of its daily development, but if it hired a contractor to modify their build system, that might be outside the scope of their core business.
I.e., Uber could not outsource driving if it calls itself a transportation company, but it could outsource accounting functions.
As the company grew much larger, we did eventually expand our product line, and did build a team. But for several years, we just had 1 dedicated hardware guy.
And that's why they're not a transportation company - they're a company that matches two sides of a marketplace connecting drivers with passengers.
Or at least that's one of the directions I'd expect their lawyers to look into.
When I personally worked as a contractor, the other contractors I worked with mostly bounced from short gig to short gig. That would probably meet (B). (A) was a bit more subjective.
If you're a long-time contractor for a single customer, and that single customer has a high level of direction over your day-to-day work, you are at risk of being defined a W2 employee by a legal entity like the IRS. (Or the state of CA.) In such a case, it's important that you clearly understand the legal difference between a contractor and an employee; and have some frank discussions with your "customer." It's important to point out that your "customer" bears the risk of you being redefined as an employee, so it's in their best interest to make sure that your contractor relationship follows the law as best as possible.
I'm confused. You seem to be applying (B) to the contractor somehow, where my reading is that it applies to the company doing the contracting. It doesn't matter what the contractor is doing; if a company makes widgets, they can't hire a contractor to make widgets. It doesn't matter if the widgets are a different color or if the contractor only ever makes widgets for any given company for a few months at a time.
Yes and no. A company that hires contractors who bounce from gig to gig meets (B) assuming that the software in the other gigs applies to different businesses.
Assume I make websites on contracts. If I make a website for a butcher, a baker, and a candlestick maker; the butcher, the baker, and the candlestick maker clearly meet (B).
This seems to be saying the same thing: https://smallbusiness.chron.com/true-owner-llc-cannot-w2-inc...
The article is referring to true LLCs, i.e., those which have elected pass through treatment.
In theory this should be really good for software contractors, because in this should rip out the middlemen (i.e. the firms who get the contract to do the work and turn around and subcontract the work to you for pennys on the dollar). Now in theory these middlemen are gone and you as the software developer should be able to obtain the contract directly directly from the company.
You must have missed the part of my comment that specifies:
"the firms who get the contract to do the work and *turn around and subcontract the work to you for pennys on the dollar"
>(e.g. Uber might contract with local companies formed solely to employ Uber drivers in that locality, so that Uber doesn't have to deal with all of the complexity of treating all of its drivers as employees.)
Then what is to stop this new employment firm Uber has to contract with to obtain drivers from deciding after they have the infrastructure of drivers in place from cutting Uber out and launching their own ride-share app?
At the end of the day Uber isn't claiming drivers as contractors because of complexity, they are doing it to lower their costs.
Hmmm, I've never seen that arrangement before. Maybe it's a common thing somewhere though. I can't imagine why anyone would take that kind of job.
However companies like Airbnb (hospitality) and Uber (ride sharing) will be able to hire programmers as contractors because writing software is not main source of income for those firms.
Core business is understood to mean primary revenue generating activity, which is getting paid for facilitating rides. They don't charge any money for the use of the software.
HMRC provide this tool to determine employment status:
It classifies the contractors who wrote the tool itself inside IR35 while HRMC (the people contracting them to write the tool) do not.
Uber however is a taxi company and the brunt of their primary activities are done (atm) by contractors. Driving people around is their core business - even if they will probably give the defense that they're only a middle man with an app that links independent drivers up with people looking for a ride.
Could uber work around this by having everyone form their own LLC to be an uber driver, and making that process painless for people? (or making it painful and not caring about the long term ramifications)
This is one of the reasons UPS supported the bill. It creates parity between the two.
> An individual who holds an active license from the State of California and is practicing one of the following recognized professions: lawyer, architect, engineer, private investigator, or accountant.
For example a Software Developer can't start a professional corporation in California like a lawyer, architect, civil engineer, accountant etc...
1) a four-year degree from a university program accredited by the Engineering Accreditation Committee (EAC) of the Accreditation Board for Engineering and Technology (ABET),
2) an eight-hour examination on the fundamentals of engineering (FE) usually taken in the senior year of college,
3) four years of acceptable experience,
4) a second examination on principles and practice
5) written recommendations from other professional engineers.
It's a proffesional level job, but reconisation usually means being a member of some sort of proffesional body - no idea what the software one of those would be?
It wouldn't be a requirement for a job necessarily, but not a bad thing to have.
'cause these look like every long-term contractor needs to become an employee in one way or another.
In this case, it's just financially to your benefit to be a consultant. This sword will cut both ways.
Which of these three clauses are not satisfied by drivers for a ridesharing company?
This would be a hard sell because Uber and Lyft are in the business of providing transportation to people. They may argue that they're only providing the platform that enables drivers to provide rides, but considering the amount of evidence that says otherwise, I'd like to see their lawyer making that argument with a straight face.
It's like saying that the drivers aren't employees because Uber doesn't provide health benefits.
Companies routinely get in trouble for forcing their employees to buy their own equipment. But it still happens all the time because of the power imbalance even when they're employees.
This is one of the many thing which makes all this such an existential threat to Lyft/Uber. Even just when it comes to minimum wage there will be a huge fight because so many drivers make less than that when the equipment is taken into account
Uber also is a technology company just like eBay.
If Uber riders were able to pick the driver they wanted and drivers were able to design their own advertisement page the riders see as well as being able to negotiate with the rider directly without loosing the Uber's platform protection, I would agree.
The relationship between customer-seller is just much different than rider-ridee.
If Uber wants to be treated as a marketplace and sidestep this new law, it needs to make significant changes - if drivers are truly independent contractors they should be able to set their own prices at a minimum.
They would need to redesign their entire app and business model to do that.
A marketplace generally allows those who operate in it to set their own pricing. The fact that Uber exclusively determines both cost and pay for the drivers would run counter to your 'marketplace' argument.
They have literally none of the hallmarks of being a marketplace.
It takes serious mental gymnastics to say a driver is not simply an employee of the company, in terms of operational workflow. Drivers aren’t going off and figuring out everything (or even hardly anything) about giving rides at their own discretion, or even just with minor intervention from a central dispatch. The whole thing is constantly controlled in lock step by the central dispatch, and Uber, Lyft, etc., employ data scientists and other experts specifically to make it more centrally coordinated based on data.
Frankly the only thing the driver controls is the financial risk of the car itself and clocking in / clocking out overall (though this is also manipulated with incentives).
Au contraire, it is the various governments over the years that have re-regulated drivers (cannot drive in certain areas at certain times, must display decal, must carry license, must pay ransom fees, cannot stop in places, etc.) in ways that have taken away their control over work. We're headed back to capped and regulated taxis, unfortunately. New York City already has a black market trading TNC plates, just like medallions, and prices are back to taxi levels. Hope you like that.
Choosing the route, for example, is a service the ride hailing companies rely on the driver to perform. Like an employee.
Choosing to run an errand, give me a break? You can’t be serious? Employees do that stuff all the time. That type of thing is not related to the distinction between contractor or employee.
If you work, say, in a restaurant and decide you want to go pick up your laundry, expect the shift supervisor to tell you no.
Certainly some employees enjoy that flexibility, but that is entirely at the discretion of your employer.
The pertinent part of the bill:
2750.3. (a) (1) For purposes of the provisions of this code and the Unemployment Insurance Code, and for the wage orders of the Industrial Welfare Commission, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:
(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
(B) The person performs work that is outside the usual course of the hiring entity’s business.
(C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Of course, there's a bunch of exceptions for various professions toward the end.