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A British Plumber May Show Uber the Future of Employment (bloomberg.com)
A British plumber may show Uber the future of employment. From a report: The U.K.'s top judges ruled Wednesday that Pimlico Plumbers Ltd. should've treated one of its tradesman as a "worker," giving him the right to vacation pay and to sue the company in a decision that could have ramifications for other gig economy lawsuits. Supreme Court judges found that plumber Gary Smith, who worked for London-based Pimlico Plumbers between August 2005 and April 2011, wasn't self-employed or a client of the firm, giving him the right to sue the company under discrimination laws.
"This is one of the most significant employment status decisions we have seen in the last five years," said James Murray, an employment lawyer at Kingsley Napley in London. Uber and other app-based firms will be watching the ruling with interest as they face similar legal challenges over the way they treat employees. Uber's appeal of a decision granting its drivers benefits including overtime and paid vacation is scheduled to be heard by another court October 30. Meanwhile Deliveroo, the food-delivery service, is currently battling the IWGB union over its riders' employment status and in May, taxi service Addison Lee lost an appeal over whether drivers were independent contractors or employees with rights to benefits.
"This is one of the most significant employment status decisions we have seen in the last five years," said James Murray, an employment lawyer at Kingsley Napley in London. Uber and other app-based firms will be watching the ruling with interest as they face similar legal challenges over the way they treat employees. Uber's appeal of a decision granting its drivers benefits including overtime and paid vacation is scheduled to be heard by another court October 30. Meanwhile Deliveroo, the food-delivery service, is currently battling the IWGB union over its riders' employment status and in May, taxi service Addison Lee lost an appeal over whether drivers were independent contractors or employees with rights to benefits.
If he wasn't self employed, he should have payed a higher rate of NI (for all you non-UK people: in the UK, income tax is split in a weird way into 2 pieces: i) income tax and ii) Natonal Insurance (NI). NI is not payed by pensioners, and a lower rate applies to the self-employed). I wonder if he's due a tax bill.
Depends which lawyers you speak to I guess. How about this opinion from another employment lawyer:
Alan Lewis, employment partner at law firm Irwin Mitchell said the decision was not a "game changer" and that cases would continue to be argued on their specific facts and, for businesses that rely on self employed contracts, that means further uncertainty.
"This decision is not necessarily a win for 'gig economy' workers seeking to challenge their employment status."
Pimlico Plumbers does "not operate a gig model and the implications for Uber, City Sprint, Deliveroo etc may be limited, although the publicity around this case may encourage other 'self employed' contractors to challenge their legal status," added Mr Lewis.
Source: https://www.bbc.co.uk/news/bus...
The main thing I knew about Pimlico plumbers is they have the most incredible Christmas decorations which you can see from the Waterloo mainline (left hand side as you're leaving London).
Shame to hear that they've been a bunch of wankers.
SJW n. One who posts facts.
Key facts in this case
- He had to work 5 days a week for a minimum of 40 hours
- He had to wear the company uniform and drive a company-logo van
- He couldn't send someone else to do the work (substitution) (although under limited circumstances a different pimlico employee could do work)
- There were significant limitations on his ability to work for other people or competitors
the courts basically looked at this and said; Yup - he looks an awful lot like an employee rather than an independent self-employed person.
More generally, the way the contract was written shows that Pimlico were trying to present to customers that the plumbers were employees, whilst making the plumbers not employees so that they could limit tax and avoid certain obligations. The UK courts are getting increasingly vociferous in saying that this is not ok.
http://www.bailii.org/uk/cases...
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Contractors get no respect in California. We work side by side employees, but get none of their benefits.
If they did not treat you substantially differently -- cubicles instead of offices, no free food, no company events, etc. -- the California Department Of Labor would reclassify you as employees.
In effect, the California Department Of Labor demands that the company you contract for essentially treat you like shit, and if they don't, the punish the company.
"Fake Self-Employment" is already a law in Germany for decades. If you match certain criterias like "working just for one customer who also gives yu all your orders and tells you what to do" then you are automatically declared "fake self-employed" and your employer has to treat you as employee with all the benefits
Six years with the company goes way beyond a standard independent contractor gig. He'll be lucky if the Inland Revenue don't invite him to hand over far more than he picks up from the company.
Yeah that won't work in the UK. The government became wise to that years ago.
Here in the US, each state has tax laws that basically state that if someone works full time for a year, it constitutes "nexus". That means that the company is established in that state and is bound to obey tax and other laws in that particular state.
The real issue is enforcement. I imagine most places have all kinds of laws that negate the benefits of "fake self employment" but if they are not uniformly imposed, corruption takes root.
Greed is the root of all evil.
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Most anyone I've known that does Uber only did it for a little extra income. I was surprised to find there were people that used it as a main source of income.
British plumbers are notorious for high prices and bum cleavage. I'm hoping that Uber don't adopt either of those!
Key facts in this case
- He had to work 5 days a week for a minimum of 40 hours
- He had to wear the company uniform and drive a company-logo van
- He couldn't send someone else to do the work (substitution) (although under limited circumstances a different pimlico employee could do work)
- There were significant limitations on his ability to work for other people or competitors
That's interesting, and probably shields some gig-economy companies from similar rulings. For regular Uber, at least:
1. You work whenever you want, as much as you want
2. You don't have to wear a uniform (but I think you need to put an Uber sign in your window when you are driving)
3. You can do whatever else you like when you aren't working for Uber.
The "sending someone else" thing doens't apply in this case, I think, because you are accepting fares from requests, nobody is ordering you to take a fare.
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Contractors will normally get the higher pay though.
So as an employee I can get paid $50 an hour for my services, plus the company will pay an other $50 an hour to cover non salary expenses. From Benefits to your supplied laptop and the property used for your office/cube. So that $100k job for a salary employee cost the company $200k to keep you there.
As a contractor you may charge $250 an hour for the services, So if you are working for a customer full time that is $500k a year, however this extra money means you will not get a lot of the benefits, because you are already costing the company more money. You will be moved to a cube where they keep spare parts if no other spots are available, even if you job is a higher level work then they guy who took the cube you are using. Because the company needs to pay for the property that is using the cube space. And the employee who is there for a cost savings over you will get preference because they in general bring better value.
Also as a contractor this extra pay is what you need to cover things like health care, time off for a vacation, and being a contractor you may not always have full time work, so the extra costs covers your expenses while you are hunting for a new customer.
Now this for self employed contractors. If you ware working for a consulting/contracting firm. Then these benefits should be provided by the firm you are working with. Because that $250 an hour isn't all going to your pocket 60% (or more) may go right to the firm eating away a lot of the money you need to support yourself, so the firm should be offering some benefits Such as health insurance, retirement and cover vacation time which the larger organization can probably get a better deal then you as a self employed person can get.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Most contracting agencies in Silicon Valley offer full benefits that are equal or better than what corporate employees get.
Goodbye, Slashdot!
Well, if you are a REAL contractor, you know you calculate your bill rate to take into consideration you paying your health care insurance and HSA, your time off for vacation and sick, etc.
That's one reason contractors' hourly bill rates look to be incredibly high, but things like that and retirement savings, etc...are all parts you pay out of that bill rate.
It is nice, to be able to come and go as you please much more than W2 employees, and you get nice tax write offs that the W2 folks don't get.
There are pros and cons to both sides of the equation....but if you do it right, contracting can give you benefits over the regular employees.
If nothing else, they usually want to work the W2 salary employees OT more often than the contractors, because the have to pay the contractors for those hours, which they get for "free" off the W2 salaried employees....that's one big benefit.
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if someone works full time for a year
For a single employer.
Solution: Make sure you have more then one client. This may be a problem if one of your customers needs you for a critical project. But that trigger is creeping up and you've got to take 6 months and go work for his competitor. Too bad. We'll just see who gets their product to the market first.
Have gnu, will travel.
AND all the tax liabilities of an employee
But I'm incorporated overseas. In a country with very low employee tax liabilities.
Have gnu, will travel.
but those calculations would have factored into Uber's pay offering too. If Uber knows their employees get a tax advantage then they're smart enough to know they can offer less pay with the understanding that the lower pay gets made up in the backend when the employee files for taxes. In America we see this with Walmart paying their employees so little they qualify for food stamps (and in America if you qualify for food stamps you _really_ need them, we're kinda petty about who qualifies).
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Incorporate where you like. If your work in the UK, you're subject to UK employment laws which means if you act in a manner equivalent to an employee then you are one as far as the government and especially the inland revenue care.
SJW n. One who posts facts.
It should be up to the Company and the employee to decide what kind of relationship they want to engage in. I don't want the govt to tell me if I am a worker or a freelancer/contractor.
The company is liable for corporation taxes in it's local tax jurisdiction, the person doing the work is liable for personal taxes, including national insurance, in the jurisdiction where they are tax resident.
But, in the UK, the employer is solely responsible for the employer's part of National Insurance. The UK has no way to force an offshore employer to pay NI for an employee. Hence you *may* be able to avoid half your NI contributions.
However, most people doing this simply take a small salary, which is below the NI threshold, and the rest of their income is received as dividends.
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OK, but it depends on who you're contracting to. If you're contracing to an overseas compay then yes. If you're playing shell games but contracting to a UK company then you're still on the hook for IR35.
However, most people doing this simply take a small salary, which is below the NI threshold, and the rest of their income is received as dividends.
That's the traditional way. If you fall foul of IR35 though you will be liable for NI (there's an employer and employee contribution) I think. don't quote me on that, IANAL, it's been a while since I've done contracting and I was so far from IR35 that it really wasn't a concern for me.
SJW n. One who posts facts.
Actually, Uber punishes drivers for refusing fares. And they're not allowed to negotiate the price.
Here's a list of criteria for self employment:
* Ultimate control of the work. A self-employed person should exercise independent control and judgement over how the work is carried out i.e. the means and methods
* Working for a number of people. The greater the number of client's the more indicative of self-employment status.
* Working exclusively for one organisation is indicative of employment.
* Profit element, and risk of loss.
* Self-employed individuals usually have the right to appoint a substitute or to delegate work to others and are not necessarily required to carryout work personally
* Mutuality of obligations. A self-employed worker is not obligated to accept new work assignments from the work provider and the work provider is not obligated to offer new work assignments
* Correction of faulty work at own cost and time
* Provision of own materials and equipment
* Working hours. Generally the self-employed have greater freedom to negotiate their working hours and working practices
* Integration with the employer's business. Self-employed individuals are not generally integrated into the organisational structure of the work provider
* The intention between the parties
* Usual conditions in the industry
Citation needed, especially for entry level work. Contracting agencies are incentivized to treat people like raw meat.
"Forget the engineers." -Carly Fiorina, briber of MIT Technology Review.
UK tax and employment law recognises three classes of person working in or for a company:
a) Employee (full right to benefits , holidays, pension etc by law)
b) "Worker" (gets some rights of employee, but not all of them)
c) "Self employed" (no rights , has unlimited personal liability for tax and events)
d) "Limited Company" (one man incorporation) (No rights, but only monies paid up as shares on incorporation and residual retained profits can be at risk) Thus no personal liability and house etc and family funds are not at risk.
The 'worker' status of this plumber is the "b" option , which is why it is not a 'full employee' benefit obligation but he wins some of benefits of an employee.
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