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Who's a full-time employee and who's an independent contractor? Democrats think they know. |
Janet Novack, 01.22.09, 06:00 PM EST
Forbes Magazine dated February 16, 2009
For four years Hughes Amero delivered fuel for Townsend Oil of Danvers, Mass. He owned the truck and was paid as an independent contractor for each gallon delivered. In 2005 Amero fell from a refueling platform. When Townsend wouldn't pay his medical costs and later terminated his contract, Amero sued. In December a Massachusetts Superior Court judge ruled that Amero was Townsend's employee, entitled to overtime and other benefits. "This is the way we had done business for years,'' says Townsend attorney Kurt Fliegauf, who plans to appeal.
More than 10 million workers are classified as independent contractors--they don't get company-paid benefits such as health insurance, overtime, family leave, protection from discrimination laws or unemployment when work dries up. But a crackdown is already under way in the states and, with Democrats in control, likely to come from the federal government this year. Since 2007 Connecticut, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York and Washington have passed laws or set up task forces to force companies to put more of these workers on their payrolls as employees.
President Obama has made it clear he doesn't like the current system. In 2007 then Senator Obama and fellow Illinois Democrat Richard Durbin cosponsored a bill that would have repealed what's known as the Section 530 safe harbor--a 20-year-old provision that bars the Internal Revenue Service from writing regulations clarifying who's an independent contractor. Last year he joined Massachusetts Democrats Edward Kennedy and John Kerry to sponsor a bill with similar aims. In January the IRS' Taxpayer Advocate called for repeal of Section 530.
This issue has smoldered for decades, with occasional high visibility flare-ups. Contract drivers are suing FedEx (nyse: FDX - news - people ) to win various benefits due employees; during the last Congress Obama, Durbin and Representative Henry Waxman (D--Calif.) demanded the IRS investigate whether Blackwater improperly treated its armed Iraqi guards as contractors. (Blackwater says the classification was correct.) But mostly, until recently, there's been little government enforcement, says Richard J. Reibstein, of New York law firm WolfBlock.
Fueling the crackdown: the growth in contractor use; pressure on Democrats from unions and workers' rights advocates; and concern over lost tax revenue. Employees have taxes withheld from their paychecks, and the IRS collects 99% of the taxes owed on wages. Self-employed folks don't have anything withheld and pay just 43% of what they owe, the IRS estimates. (The corner-cutting Treasury Secretary would seem to be in the majority.) If self-employed workers were more scrupulous, the IRS could afford to be indifferent, since the Social Security and Medicare tax comes to a combined 15.3% (on the first $106,800) either way.
So who is an employee? In general, when one company dictates how, when and where workers perform all their chores, they're employees. Workers who have a lot of freedom in how they do their jobs, invest their own capital in equipment and find their own office space are likely to qualify as contractors.
Even some businesses want more enforcement, arguing that competitors get an unfair advantage by misclassifying employees. But given the economy's woes, the crackdown makes no sense to Russell A. Hollrah, executive director of the Coalition to Preserve Independent Contractor Status: "Why would any rational person pick now to try to eliminate any source of economic activity?"
Emphasis added.
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If You Thought the Internet Would Never "Get Local," Think Again
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Trackle Feeds You Personalized RSS
Leena Rao
TechCrunch.com
Tuesday, February 10, 2009; 2:00 AM
Silicon Valley start-up Trackle.com
is launching the public beta of its personalized Google Alerts to track
pretty much everything in an internet user's life. Trackle's technology
and interface is innovative and disarmingly comprehensive. It provides
real-time personalized RSS feeds of the latest crime in a user's
neighborhood, fluctuating airline ticket prices, how much a user's
house value is down this week, updated job listings, sports scores and
much more.
The breadth and specificity of Trackle's information is what
differentiates itself from other RSS tracking applications like Google
Alerts, Yotify and Notify.me.
Trackle doesn't just search for keywords, it incorporates change into
the keywords and provides up-to-date, highly customized information
about ever-fluctuating internet content. For example, if a user is
eyeing a camera on sale at Amazon.com
but only wants to spend $200, Trackle will monitor the sale and provide
you updates of when the camera price reaches $200. Trackle keeps all of
this information on the user's personalized site but the user can also
choose to receive the real-time alerts via SMS and e-mail. Imagine if a
user is bidding on an Ebay item; Trackle claims to give real-time price
updates on an auctioned item. For free.
Read more...
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Join the AFCP Geek Squad
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 If you're into web design, organizing social networking, responsible for your company's website, or basically don't have a clue (and hoping to find one), join the new Facebook Group: AFCP Geek Squad.
The AFCP Geek Squad is dedicated to bringing together folks in the free paper industry who are responsible for websites, help organize websites, social networking and marketing and anything else that requires electricity.
The group will exchange ideas, assist each other with problems and generally network.
Just sign into your FaceBook account and search for AFCP Geek Squad. Membership is open to all, so join and start posting questions, comments, gripes and ideas.
And, while you're at it, join the regular AFCP group, too.
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Cheers,
Craig McMullin
AFCP
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AFCP has created groups at each of the major social networking sites (LinkedIn and Facebook).
Just click here for instructions on how you can join the AFCP groups. |
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If not, you may be missing a lot of important/profitable information.
Join the forums today!
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