Ask Slashdot: Opinions on the State Breaking Its Own Law Against Employee Misclassification?

An anonymous reader writes: I've had the privilege of developing software as an independent contractor for various agencies of a particular state for many years. These past few, however, have seen changes: now I, and almost every other contractor I know, are being managed very differently. This state is now making a widespread practice of using the businesses it awards contracts to as staffing agencies, knowing full well that the people coming in are 1099s and receive none of the benefits or protections of regular employees. These contractors are expected to be on site full-time, are not allowed to use their own hardware or software, and are managed alongside, and perform substantially the same work as other, regular employees. This is apparently done to cut costs.

The State has no legal risk here — that rests solely on the businesses it awards contracts to. But given that this particular state takes a hard line against misclassifying employees, this strikes me as profoundly hypocritical. I am not here to ask for legal advice. Indeed, I have already retained counsel in this matter. Considering additional detail that I won't get into here, Federal law is likely being broken. Since this is also one of the states that have the strict 'three prong' test for classifying employees, the State's own law is definitely being broken.

I thought, maybe somebody should say something. But my lawyer's reaction surprised me. He said — this isn't a big deal, you could just go find another client. And you know what? He's right. I could totally do that. Maybe since we in the IT industry tend to be well paid, nobody should care, and there's no reason complain. I'm not asking for legal advice or a recommendation as to what I should do personally; I'm still forming an opinion on the larger issue here, and I'd like you to share yours.

Comments

legal risk

[BradMajors]

It is not true the state is free from legal risk. I was in a somewhat similar situation and I was arguing that the contracting company was a sham and I was actually an employee of the original company.

I received a big check to shut me up.

Right vs wrong

[Chuckstar]

Unfortunately, I often find myself in the minority on points like this. But here's where I typically come out:

Everyone has a responsibility to report wrong-doing, when they see it. Even if this is not a legal responsibility, it is a moral one. Certainly, one can take this too far, and become a nitpicker. It's not one's responsibility to be a nitpicker. But it is one's responsibility to set a reasonable line in the sand, and when one sees that line crossed, then act accordingly.

I get the sense you wouldn't be asking the question if you thought this fell into the category of nitpicking. The fact you feel the need to ask the question in the first place probably provides the answer right there. I believe you have a moral responsibility to not just look the other way. And this might involve risk to you. But where would we be as a society if people were afraid to take such risks in order to fix wrongs?

Re:Sit down, shut up, and do your work... until...

[cayenne8]

...but I've personally seen contractors doing the same work as employees for multi-year stints, just because it was easier to contract out than actually hire a permanent position. I've even seen positions intentionally left vacant, while contractors are hired to do that position's work.

Yes..and SHHHHHHH!!!

Don't start complaining about this. Those of us in the 1099 contracting game LIKE it this way!!

There's nothing magical or that difficult about paying your own benefits!! Medical is easy, just get a high deductible policy (and many of them since obama care came out are this way) of about $1200 deductible, you can also set up a HSA (Health Savings Account) and sock away about $3K annually pre-tax....for your routine meds and co-pays, etc.

You set up a solo-401K or IRA..whatever you like...and you know how to negotiate your bill rate to cover medical/retirement/timeoff and you're good to go. This way, you generally have MUCH more freedom with work (no more fucking waiting to *EARN* vacation hours...take them off when you want), and you can write off many things, driving to/from job site is a good one, equipment, and as I've mentioned before, if you set yourself up as a S-corp of one person, and pay yourself a reasonable salary W2 from your own company, you only have to pay employment taxes (SS and medicare) on that portion of your money, the rest falls through to personal income taxes at EOY..where only state and federal are taxes..and thats AFTER you take your deductions out.

All you have to do, is be able to wear your big boy pants and keep up with a bit of paperwork yourself, be responsible with money (save enough to pay EOY taxes, make sure to pay quarterly taxes)...and also good idea to hire a CPA (deductible).

You get more freedom to work like you wish, and you have a fighting chance to keep more of your hard earned money from the fscking IRS. And it is perfectly legal...

There is NOTHING wrong with being a 1099 contractor, frankly, I think it is much better than being a regular W2 wage slave...and these days, face it, you don't get any more job security as a regular employee than you do as a contractor...so, you might as well contract and get the BILL rate that goes with it.