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0 pointstaneq8y ago0 comments

I don't know about the U.S. but in Australia there are strict rules about 'sham contracting'. To be treated as an independent contractor you can't get more than 80% of your income from any one source. If you 'contract' to just one employer you're an employee for both tax purposes and protections.

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8 comments · 3 top-level

maratd8y ago· 3 in thread

> If you 'contract' to just one employer you're an employee for both tax purposes and protections.

That's not the case in the US. Our laws bar the contractor from having set hours, a set place of work, and a myriad of other rules. So if a contractor comes in 9 to 5 and has his own desk, he'll be classified as an employee. Honestly, I would prefer a similar % rule, that seems simpler and I think would accomplish the intent far better than what we have now.

gamblor9568y ago

US law doesn't ban any of those things. Those are simply factors in determining whether a person is an employee or contractor, which in the US is not a bright-line test but is more of a circumstances-based finding. The US also employs the % rule as a factor in that determination.

neaden8y ago

The problem with the percent rule is that people could easily fall in and out of it. If we imagine someone who is an Uber driver but also works part time as an employee at another business, depending on how many hours they get in a given week as a part time employee they could go above or below the 80% figure. From Uber's standpoint you could also have two people who each drive for 10 hours a week earning the same pay, one of whom that is the only source of income, the other it's only 20% of their income.

drag0nballz8y ago

Exactly -- and companies would not want to hire contractors because it's impossible for them to know if someone is going to be treated as an employee all of a sudden (say they hired them part-time but their other p/t gig ended). I don't know how Australia deals with this.

nbadg8y ago· 2 in thread

I'm curious -- how does this work with, for example, a professional Youtuber? Are they considered Youtube employees?

subhobroto8y ago

This is a great question and a pretty common misconception.

No, because the revenue test is one of the criteria the judge/IRS looks at. There are other criteria like where and how the "contractor" wants the job done and the relationship between the parties.

Youtube does not tell these Youtubers how to present their videos

Youtube does not tell these Youtubers how long their videos should be

Youtube does not tell these Youtubers when they should release the video

Youtube does not tell these Youtubers what target audience they should be making videos for

Youtube does not tell these Youtubers what income they will get per video made regardless of how popular the video is (surge pricing anyone?)

Uber does.

nbadg8y ago

This is a good overview in the US legal landscape, though it's worth pointing out that the IRS and DOL have differing standards on what does or does not constitute and employment relationship. But I'm actually interested in the European legal landscape here, where contracting relationships generally require the contractor to acquire a certain percentage of their revenue from a separate source. If someone was earning their entire living on Youtube, it would seem to me that these EU laws would consider that person an employee of Youtube. That's obviously not something Youtube would appreciate, and I'm not sure if it's actually the case -- hence the question.

lykahb8y ago

If you drive both for Lyft and Uber your income structure may satisfy that criterion.

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