Welcome to the 1099 economy
October 3, 2014 6:42 AM   Subscribe

Silicon Valley's Contract Worker Problem Earlier this year, I hired a house cleaner. I wouldn't have done so normally, but my place was a mess, I was busy at work, and I saw an offer on Facebook that looked too good to be true — a San Francisco start-up called Homejoy was offering home cleanings in the Bay Area for $19. (Not $19 per room or $19 per hour. Just $19.) So I booked an appointment through Homejoy's website, and a day later, a young man showed up at my door.

As the cleaner laid out his tools, we made small talk, and I asked him where he lived. "Well, right now I'm staying in a shelter in Oakland," he said. I paused, unsure if I'd heard him right. A shelter? Was my house cleaner — the one I'd hired through a company that has raised $40 million in venture-capital funding from well-respected firms like Google Ventures, the one who was about to perform arduous manual labor in my house using potentially hazardous cleaning chemicals — homeless?
posted by modernnomad (139 comments total) 24 users marked this as a favorite
 
Was my house cleaner — the one I'd hired through a company that has raised $40 million in venture-capital funding from well-respected firms like Google Ventures, the one who was about to perform arduous manual labor in my house using potentially hazardous cleaning chemicals — homeless?

The author really has no idea about the cost of living. If he was paying only $19 for housecleaning, what does he expect? That's only about $5/hour, minus any fees from the agency.
posted by jb at 6:48 AM on October 3, 2014 [48 favorites]


It turns out that companies that offer services at ridiculously low prices pay the people doing those services ridiculously unreasonable wages.

This is my surprised face.
posted by mcstayinskool at 6:50 AM on October 3, 2014 [86 favorites]


So what at this point is the rationale for retaining the 1099 classification, other than allowing business to stomp on the working poor?

I mean, I know that's the actual rationalization, but I assume there's one that puts a candy gloss on it somehow.
posted by winna at 6:51 AM on October 3, 2014 [8 favorites]


I mean, I know that's the actual rationalization, but I assume there's one that puts a candy gloss on it somehow.

Um...American's deep fetish for the word "entrepreneur"? "Every man his own boss"?
posted by Thorzdad at 6:55 AM on October 3, 2014 [15 favorites]


It turns out that companies that offer services at ridiculously low prices pay the people doing those services ridiculously unreasonable wages.

I don't know if you've considered reading the article, but if you do you'll discover the service claims it pays its contractors between $15 and $20 an hour.
posted by Diablevert at 6:56 AM on October 3, 2014 [3 favorites]


You, the hirer, have the power here to pay what labor is actually worth. And you, the hirer, now have an obligation like that of other employers: to deal fairly with those who work for you, and to refuse easy solutions that are unfair to others.
posted by amtho at 6:57 AM on October 3, 2014 [48 favorites]


It turns out that companies that offer services at ridiculously low prices pay the people doing those services ridiculously unreasonable wages.
posted by mcstayinskool at 6:50 AM on October 3


Frem the FA: "As for the homeless cleaners, Homejoy says its Bay Area contractors earn, on average, between $17 and $20 an hour, well above minimum wage. "

That said, what the hell kind of business model keeps a company afloat when they're paying a contractor anywhere from $34-120 to do a job that they're only charging the customer $19 for?
posted by bizwank at 6:58 AM on October 3, 2014 [21 favorites]


I read this in the article, and wanted to punch something and throw up simultaneously.
"Perpetual, hourly employment is often deeply inefficient for all parties involved."
If your goal is a permanently underemployed, fearful, serf class of workers, then yeah I guess one would consider regular employment and income inefficient.

This digital, app-based revolution was initially supposed to cut out the middle-men... Now, it's all about middle-men siphoning off as much money as possible, through a phone app and contract workers.

The sooner this sharing economy bullshit ends, the better. The labour market is (seemingly) regressing so much, I want to vomit with rage.
posted by Dark Messiah at 6:59 AM on October 3, 2014 [83 favorites]


Yeah, one real problem is that people are paying $19 for a service and the other 2/3 of the price is subsidized by VC money. That drives the value of the work down, and eventually the wages do suffer.
posted by smackfu at 7:00 AM on October 3, 2014 [16 favorites]


$19. Same as, actually a dollar less than, downtown.
posted by hal9k at 7:00 AM on October 3, 2014 [11 favorites]


To be clear: "1099" is a reference to the tax form, not the year 1099, but confusion can be understandable.
posted by Going To Maine at 7:00 AM on October 3, 2014 [95 favorites]


So egregious:

The company's terms of service states that "if Handy.com is found to be liable for any tax or withholding tax in connection with your use of Users' services, then you will immediately reimburse and pay to Handy.com an equivalent amount, including any interest or penalties thereon." In other words, if Handy.com is forced to reclassify its contract workers as employees, its customers – not the company itself – will be on the hook for any extra costs.
posted by aka burlap at 7:00 AM on October 3, 2014 [10 favorites]


"As for the homeless cleaners, Homejoy says its Bay Area contractors earn, on average, between $17 and $20 an hour, well above minimum wage. "

I would love some proof of this.
posted by Dark Messiah at 7:01 AM on October 3, 2014 [9 favorites]


I'm not sure how this is a shock to the author unless he hasn't been paying even a cursory look at the economy for the last 10 years. Journalism seems to be increasingly inhabiting an ivory tower where they can only manage to come down once and a while and write these "wow, something is happening" pieces; meanwhile many have been living it for years.
posted by incolorinred at 7:02 AM on October 3, 2014 [9 favorites]


I went and looked for the benefits to being a 1099 contractor and the only thing I could find was that their checks are larger than W2 employees. But since their checks are larger because no taxes are being taken out and they don't have any benefits deductions I hardly think that is a plus.
posted by winna at 7:02 AM on October 3, 2014 [3 favorites]


It's a benefit if you don't plan to pay taxes.
posted by smackfu at 7:04 AM on October 3, 2014 [4 favorites]


There are actual contractors, doing actual contracting things, and not being employees works well for them. They come, they do a brief project, then they leave. I know some; they get paid a lot of money an hour and they absolutely do not want to be employees.

The problem is that companies realised they could pay less in taxes by calling everyone a contractor, and the employees don't have the power, the knowledge, or both to fight it, and the appropriate government agencies don't seem to care to.
posted by jeather at 7:08 AM on October 3, 2014 [33 favorites]


We pay our cleaner $100 for 90 minutes work because this is the bay area! $19 for a house cleaning? Someone is getting absolutely fucking screwed out of this deal and it sure as hell won't be the company.
posted by Talez at 7:08 AM on October 3, 2014 [2 favorites]


Clearly, the fair solution is to pay the company the $19, and then tip the cleaner $25. The cleaning job will get done, the cleaner will get some needed spending cash, and the payer can lose some of the guilt.
posted by Midnight Skulker at 7:08 AM on October 3, 2014 [10 favorites]


Clearly, the fair solution is to pay the company the $19, and then tip the cleaner $25. The cleaning job will get done, the cleaner will get some needed spending cash, and the payer can lose some of the guilt.

Or, you know, cut out the middle-man.
posted by Dark Messiah at 7:11 AM on October 3, 2014 [20 favorites]


Journalism seems to be increasingly inhabiting an ivory tower where they can only manage to come down once and a while and write these "wow, something is happening" pieces; meanwhile many have been living it for years.

That is not the biggest problem with journalism.

Actually, the problem is that journalists do report on what's happening, but no one cares or does anything about it.
posted by Melismata at 7:14 AM on October 3, 2014 [7 favorites]


It's never been a good time to be not wealthy and white and having a family that can afford to pay for college and who have connections.

Moreso lately.
posted by vapidave at 7:14 AM on October 3, 2014 [2 favorites]


Efficiency calculations need to be expanded to take into account losses due to people being constantly stressed, undernourished, sleepless, and unable to nurture children and each other. They also need to take into account the quality of life lived in communities with lots of homeless people vs. communities where most people are basically OK -- it's an important distinction we don't hear about, and it's likely to appeal to the self-focused more than strictly altruistic motives.

Efficiency needs to take more factors into account, including the experience of working with happy vs. unhappy people, and the costs of taking care of people who are rendered needy. Just add some more calculations -- it won't be simple, but it will make decisions a bit clearer.
posted by amtho at 7:17 AM on October 3, 2014 [10 favorites]


They make $20/hour...for a half hour. Then they make nothing for two hours waiting for and riding on the bus
posted by ian1977 at 7:18 AM on October 3, 2014 [42 favorites]


In one of my many musings about what I would do if I were the boss of the whole world (there would be intense changes! The education system would be virtually unrecognizable!), one of the bonkers crazy plans I think about is creating a government program (funded by my ludicrous tax scheme) to provide fair and adequate compensation for largely uncompensated "women's work". One of the staples of this would be hiring a TON of people to clean houses. Every household would be entitled to some amount (not sure how much, probably like five hours every two weeks) of housecleaning just for paying their taxes. This would recognize that a lot of work is expected but uncompensated, make people happier and make life easier for women (and men) working outside the home (and provide respite for stay at home adults), and also create a TON of decently compensated jobs (I plan to pay everyone decently well because, again, crazy tax structure) so that SHIT LIKE THIS DOESN'T HAPPEN. If there were actual legitimate decently paying options available to EVERYONE, no matter how much or little education they had, people wouldn't be forced into these horrible situations where they get paid virtually nothing to do other people's work.

I do think a lot about the idea of "job creation" and the effects of increasing automation and lowering labor costs. The problem is, we don't need to create more jobs; there are PLENTY of jobs out there. Fixing infrastucture, creating art, cooking, cleaning, childcare, providing healthcare for the uninsured or underinsured, there is a TON of work out there to be done, it's just that we're not paying anyone to do it because it's not perceived as valuable and the people entrusted with some of this work aren't properly compensated for it, and the man cleaning this guy's home is just one of the many, many people suffering for this.
posted by Mrs. Pterodactyl at 7:22 AM on October 3, 2014 [133 favorites]


Mrs. Pterodactyl for God-Emperor!
posted by emjaybee at 7:25 AM on October 3, 2014 [72 favorites]


I'm curious if there are attempts by cleaners to set up worker-owned hiring websites or agencies. I'm sure it would be hard to get capital for it, but it seems like it might be feasible.
One of the staples of this would be hiring a TON of people to clean houses.
Hmm. I'm kind of squicked out at the thought of someone else dealing with my filth. Could I just get paid to clean my own apartment?
posted by ArbitraryAndCapricious at 7:28 AM on October 3, 2014 [2 favorites]


Part of being an adult means that you take the time to learn about what, exactly, you're getting yourself into.

If you take a job that says, "We will pay you as a 1099 employee", and you don't know what that means, then you damn well better figure it out, to make sure that you understand your responsibilities, and what you will and will not be getting from the employer.

None of this is difficult. None. Companies will operate in a way that is best for the company, until such time as it is no longer best. Welcome to Capitalism, and stop being so damn shocked by it.
posted by gsh at 7:29 AM on October 3, 2014 [2 favorites]


Mrs. Pterodactyl for God-Emperor!

Oh shit yes I am getting this on an Obama Hope style poster with a picture of a pterodactyl wearing a sweet tiara as soon as I find a graphic designer and some money.
posted by Mrs. Pterodactyl at 7:32 AM on October 3, 2014 [25 favorites]


None of this is difficult. None. Companies will operate in a way that is best for the company, until such time as it is no longer best. Welcome to Capitalism, and stop being so damn shocked by it.

Stop being so damn sure we're "shocked" and not appalled.
posted by like_a_friend at 7:33 AM on October 3, 2014 [64 favorites]


If you take a job that says, "We will pay you as a 1099 employee", and you don't know what that means, then you damn well better figure it out

While you're in the homeless shelter, undoubtedly, with all your luxury of choices.
posted by vacapinta at 7:34 AM on October 3, 2014 [90 favorites]


If you take a job that says, "We will pay you as a 1099 employee", and you don't know what that means, then you damn well better figure it out, to make sure that you understand your responsibilities, and what you will and will not be getting from the employer.
... and god help you if you're an immigrant, a single parent juggling multiple jobs to keep food on the table, or a part-time student who's already busy with a courseload and doesn't have time to read up on user-unfriendly tax law. You, my friend, are an undesirable and are just grist for the Machine of Eternal Progress. You were not lucky enough to be born with the privilege of leisure time to educate yourself and that just sucks for you. It's totally fair to expect you, in a homeless shelter, to negotiate a fair deal against a corporation backed by someone else's checks.

Welcome to a world without employee protection laws. Just shut up and let it happen.
posted by bl1nk at 7:35 AM on October 3, 2014 [37 favorites]


If you take a job that says, "We will pay you as a 1099 employee", and you don't know what that means, then you damn well better figure it out, to make sure that you understand your responsibilities, and what you will and will not be getting from the employer.

The people taking these jobs lack the resources to hold out for something better, and often they lack those resources because of misfortune rather than some kind of willful foolishness. A Hobson's choice is not really a good example of freedom or voluntarism.

Companies will operate in a way that is best for the company, until such time as it is no longer best. Welcome to Capitalism, and stop being so damn shocked by it.

Sounds like a good reason to heavily regulate corporations and/or dismantle capitalism. A system that routinely produces situations like this is a shitty system, and blaming its victims is not the winning defense you seem to imagine it is.
posted by kewb at 7:36 AM on October 3, 2014 [26 favorites]


The authors naïveté about how little house cleaners make is really annoying. It reminds me of when I worked as a grocery store cashier and high school and the people who would accuse me of cheating them on prices because they, I swear to god, believed I took the contents of the cash drawer home with me at night. How can a grown person be so ignorant? And yet - many are.

As to the $15-20 an hour thing. I thinks it's perfectly plausible. The things is the worker can probably only manage a few gigs a day, what with transportation time, etc., and ends up with $50 a day. I used to do pet sitting and it was a comparable system. The hourly pay wasn't bad but you spent most of your time getting to and from places.
posted by Jess the Mess at 7:42 AM on October 3, 2014 [5 favorites]


Yeah, one real problem is that people are paying $19 for a service and the other 2/3 of the price is subsidized by VC money. That drives the value of the work down, and eventually the wages do suffer.

Maybe. Another way of looking at this is that VC companies, in pursuit of the next big 1,000,000% return investment, give a lot of money away in the process.
posted by leopard at 7:44 AM on October 3, 2014


I wish the article had clearly described the heavy tax burden that falls on the "contractors." It sucks enough that they don't get any of the protections or benefits a W-2 employee might be entitled to. But when these workers try to file their taxes properly, they are hit with the employer-side taxes that W-2 workers never have to think about. If they don't file a tax return, they are likely giving up a refund of income tax already paid (if they had other employment in the year) and possibly the Earned Income Tax Credit. Also, if they don't file, they don't get their credits toward future social security. Shameful. I wish the Department of Labor would crack down hard on all firms that do this.
posted by stowaway at 7:45 AM on October 3, 2014 [11 favorites]


If your goal is a permanently underemployed, fearful, serf class of workers, then yeah I guess one would consider regular employment and income inefficient.

Sorry Dark Messiah......But if half these people weren't voting conservative you would not be so nauseated and they would not be trying to exist in such a horrible economic model.
posted by notreally at 7:47 AM on October 3, 2014


This doesn't change people's broader points about the discussion, but the exact $19 figure must have been some sort of introductory offer to suck you into using the service.
I messed around on the Homejoy website and can't find anything less than $25 an hour, more if you add cleaning appliances, windows or walls, and $5 if you don't supply your own cleaning supplies. Seems like they're copying the airlines in offering the lowest possible base cost but then tacking on extra costs for everything.
posted by Wretch729 at 7:49 AM on October 3, 2014 [6 favorites]


I'd give about half the blame on this to the failure of the government to check very closely on companies that hire many low-paid so-called contractors and half the blame to the companies who do this.
posted by jeather at 7:50 AM on October 3, 2014 [2 favorites]


a company that has raised $40 million in venture-capital funding

How the actual fuck do these idiots get forty million dollars?
posted by feckless fecal fear mongering at 7:51 AM on October 3, 2014 [7 favorites]


If you take a job that says, "We will pay you as a 1099 employee", and you don't know what that means, then you damn well better figure it out, to make sure that you understand your responsibilities, and what you will and will not be getting from the employer.

Except, just that offer contains a lie: "1099 employee" is a contradiction in terms. A 1099 worker is not an employee. And when a company, smarter, more focused, and more powerful, uses these distinctions in law to trick and take advantage of desperate people, is it your suggestion that the rest of us should simply shrug?
posted by tyllwin at 7:52 AM on October 3, 2014 [16 favorites]


Moloch, whose heart is a cannibal dynamo if ever there was a point to show it.
posted by Slackermagee at 7:52 AM on October 3, 2014 [6 favorites]


Which is to say, for a house cleaner to be making a living wage in most areas (not even Silicon Valley), you'd have to be paying them more along the lines of about $55 per hour, more if there is a "middle man" involved. Still a reasonable price for housecleaning.
posted by Jess the Mess at 7:52 AM on October 3, 2014


Thorzdad: ... American's deep fetish for the word "entrepreneur"? "Every man his own boss"?

Except for those who are exploited by the system, the schmucks. They deserve to be treated like the sheep they are, amirite?
posted by filthy light thief at 7:53 AM on October 3, 2014


How the actual fuck do these idiots get forty million dollars?

I am sorry, but at this point I genuinely believe that this is their general plan.

No lie.
posted by aramaic at 7:56 AM on October 3, 2014 [16 favorites]


Dark Messiah: I want to vomit with rage.

You might want to try the new app Bharf, a stealth startup aiming to disrupt the involuntary personal protein spill paradigm.
posted by dr_dank at 7:59 AM on October 3, 2014 [23 favorites]


Please- Purgr is a much better app. It uses geo-location data to find the toilet nearest to you. For the on-the-go rage vomiter.
posted by TheWhiteSkull at 8:06 AM on October 3, 2014 [19 favorites]


Bharf: You pay the company to send a poor person to mop up your vomit with the clothes they stand up in. They are allowed to keep any chunky bits for dinner.
posted by biffa at 8:07 AM on October 3, 2014 [8 favorites]


How the actual fuck do these idiots get forty million dollars?

I'm curious to know what the investor storytime pitch looks like for startups whose business model is built around a cheap, disposable workforce rather than advertising.

I'm guessing it has something to do with economies in which there are an ever-increasing number of people desperate enough to clean houses for low hourly wages with no job security. Homejoy's site ominously suggests they're "circling the globe . . . and just getting started."
posted by ryanshepard at 8:08 AM on October 3, 2014


You know, I wish that we had an alternative economic system that exists that we could point to, like how Communism was admired by critics of capitalism in the early 20th century and there were all these brilliant people in support of it.

I dunno, maybe France doesn't do shit like this.
posted by angrycat at 8:11 AM on October 3, 2014


feckless fecal fear mongering: How the actual fuck do these idiots get forty million dollars?

Crunchbase lists some of the backers, and TechCrunch has a "behind the scenes" interview/review, which includes this information:
Matching the right cleaner to the right customer involves a lot of factors — not just how the cleaners and customers are rated, but also the routes that can maximize a cleaner’s efficiency throughout the day, not to mention likely transit times in a given geography.

To illustrate this point, Linsey showed me the interface that Homejoy created for cleaners to identify exactly where they are and aren’t willing to work. Originally, he said, cleaners identified their working areas based on zip code, but that turned out to be too broad (for example, many of the cleaners rely on mass transit, so in parts of the San Francisco Bay Area, many of them can only work near a BART stop). Now Homejoy gives them a tool where they can draw the exact, custom borders of their work area.
If your (Homejoy) cleaner is late, it may be because there was an issue with their transit connections.
posted by filthy light thief at 8:13 AM on October 3, 2014


As for the homeless cleaners, Homejoy says its Bay Area contractors earn, on average, between $17 and $20 an hour, well above minimum wage.

Is there any better weasel word in the english language than "average" ? I love it so.
posted by Pogo_Fuzzybutt at 8:16 AM on October 3, 2014 [12 favorites]


I worked at a venture capital type place in the financial district in San Francisco in the late nineties. It was amazing. They had a store like a 7-eleven but about one third the size - on the eighteenth floor - with the most expensive everything including chilled champagne and the best liquor. It was all of course free to the investors.

Sotto voce I'd be asked to retrieve a bottle of very expensive scotch or very expensive champagne and all the paraphernalia. I was a noontime bartender at the most exclusive bar in San Francisco, for $11/hr and without tips.
posted by vapidave at 8:19 AM on October 3, 2014 [1 favorite]


I messed around on the Homejoy website and can't find anything less than $25 an hour, more if you add cleaning appliances, windows or walls, and $5 if you don't supply your own cleaning supplies.

I use Homejoy and think it comes to about $25-$30/hr (NYC). They bought out GetMaid, the service I was using before, which charged more per hour. I kept the same cleaner I had before the buy out and just tip her super well to make up for it. SHE RULES.
posted by sweetkid at 8:20 AM on October 3, 2014 [1 favorite]


I can understand the hate for the low wages, but hate for the "middle man" is just non-sense.

How do you think house cleaners otherwise get jobs? Do you think they are on W2 otherwise? Anyone really think that someone is actually paying $55 per hour (or $114K a year) to a cleaner on W2?

System/ company like this if properly run will result more hours worked per week with less travel/ downtime. Current method of using Craigslist or word of mouth certainly isn't certainly giving domestic workers anything more than Homejoy is promising.
posted by zeikka at 8:28 AM on October 3, 2014 [4 favorites]


How the actual fuck do these idiots get forty million dollars?

There's always a bigger, richer idiot?
posted by ROU_Xenophobe at 8:30 AM on October 3, 2014 [2 favorites]


My lawyer friend just recently linked me a ruling about FedEx and whether or not their 'contractors' were actually employees. Apparently that bullshit didn't fly there either and they ruled against FedEx, not in the least because they're wearing the damn livery of a company. I mean if that's not a clear indication of employee I don't know what is!

Seems here there's a similar thing going on. If someone is literally the public facing representative of your company, how are they not your employee? Seems like a scam to me.
posted by Carillon at 8:37 AM on October 3, 2014 [8 favorites]


To be clear: "1099" is a reference to the tax form, not the year 1099, but confusion can be understandable.

To be fair to feudalism, serfs had very specific rights. Unlike these workers. Well, unless you consider "depressingly few" to be "specific."
posted by GenjiandProust at 8:37 AM on October 3, 2014 [8 favorites]


Except, just that offer contains a lie: "1099 employee" is a contradiction in terms.

That's also probably the exact language the IRS will be pointing at when they claim that you have employees and not contractors. I imagine the IRS will chuckle a bit when you try to get your customers to pay your employees taxes that are due.

I could be very wrong; I am not a tax attorney, thank god.
posted by el io at 8:40 AM on October 3, 2014 [2 favorites]


I can understand the hate for the low wages, but hate for the "middle man" is just non-sense.

I don't think there is a problem with middle-men, per se, but this recent trend in companies like Uber, Washio and Homejoy are often acting in bad faith. You're right in saying that these companies provide a platform for people to trade money for services, but I would argue that the cost of this platform is too high. We have worker protection laws and regulations for a reason. Companies like Homejoy are a end-run around workers rights with the expressed intent to create profit for themselves and their investors.

To put it more dramatically: they are not creating value, but extracting it.
posted by elwoodwiles at 8:45 AM on October 3, 2014 [15 favorites]


This is an interesting example of how things that may be good in the short term are bad in the long run. By working with (for?) companies like Uber and Homejoy, people have an opportunity to make money they otherwise wouldn't have. This chance to have cash in hand is often the difference between making rent and living on the street.

But the long term effect is going to be fewer people with insurance, unemployment benefits, social security benefits and more. These "jobs" are going to strain the social system in unpredictable ways.
posted by elwoodwiles at 8:48 AM on October 3, 2014 [10 favorites]


The thing about the sharing economy is that the marketing for these services is heavily based on the proliferation and endorsement of a particular kind of service worker - an educated person with a middle-class background who has an entrepreneurial streak - there's this idea of "hipsters helping hipsters" baked in, or else these people would just call Merry Maids. Odds are, many of these types of companies will fail... but not because people are appalled by the prospect of a homeless housekeeper, but because they are frightened of it, and chose the service to balance their discomfort with the very idea of hired help with their desire for it.
posted by Selena777 at 8:48 AM on October 3, 2014 [5 favorites]


On the Internet: graaaah this is so unfair! Blah blah blah labor wages blah blah blah
Off the Internet: UberuberuberCare.comTaskrabbituberLyftAirBnbuberetc

Put your money where your mouth be y'all: Boycott these exploitative startups.
posted by Potomac Avenue at 8:49 AM on October 3, 2014 [4 favorites]


I'm curious if there are attempts by cleaners to set up worker-owned hiring websites or agencies.

Our downstairs neighbors use La Colectiva and one of these days we are going to stop dithering and start hiring them as well, at least for a monthly thing.
posted by rtha at 8:49 AM on October 3, 2014 [6 favorites]


Potomac Avenue: On the Internet: ... Off the Internet: ...

On what basis are you implying that people here are being hypocritical?
posted by tonycpsu at 8:52 AM on October 3, 2014 [1 favorite]


The IRS has a 20-factor test to determine whether businesses are treating their service providers like contractors or employees.

At my company this has become a big deal lately. I work in R&D, and frequently will attempt to contract a university professor who has some expertise in the technology we're working on to help us a design some kind of tests (university employment contracts typically allow for this kind of outside work), or contract a small business to, say, apply thin film coatings to something, or cut funny shapes out of material that I provide.

I'm told that because of people abusing the independent contractor laws, the IRS is coming down hard on making sure that all "independent contractors" really are independent contractors. For this reason my company has instituted policies which make it really hard to contract labor from a small specialist businesses (like the coating and cutting companies) and really, really, really hard to contract a person who does not own a business, like the university professors.

There are definitely legitimate uses of the "independent contractor" labor category, and its a pain in the butt that the abuse of that designation has made the legitimate use of it so much more expensive and risky. I am glad that the IRS is apparently cracking down on this stuff, but pretty pissed off that they need to, not just on moral grounds, but also because of how much harder it is making my own job.
posted by OnceUponATime at 8:52 AM on October 3, 2014 [3 favorites]


what the hell kind of business model keeps a company afloat when they're paying a contractor anywhere from $34-120 to do a job that they're only charging the customer $19 for?

Volume!
posted by malocchio at 8:52 AM on October 3, 2014 [6 favorites]


These "jobs" are going to strain the social system in unpredictable ways.

Doesn't seem to be unpredictable at all.
posted by feckless fecal fear mongering at 8:54 AM on October 3, 2014 [2 favorites]


Tax Tip: Incorporate and pay yourself with dividends. That's how you get around the "contract employee" tax burden in Canada.
posted by blue_beetle at 8:54 AM on October 3, 2014 [3 favorites]


I've been in the same boat as OnceUponATime, running a technology business in Massachusetts where we have an even more stringent set of tests than the feds. My contractors' work was project-based and they had no interest in full-time employment, but I made them set up LLCs so we could legitimately pay them. It was a hassle for everyone involved, but I absolutely support the regulations because I know who they're meant to protect, and it's not people like me or my well-paid technical contractors.
posted by nev at 8:58 AM on October 3, 2014 [4 favorites]


Apropos of this conversation about 'contractors' and the ridiculous notion that an individual consumer is considered to have equal bargaining power as an international corporation.
posted by Carillon at 8:59 AM on October 3, 2014 [4 favorites]


How do you think house cleaners otherwise get jobs? Do you think they are on W2 otherwise? Anyone really think that someone is actually paying $55 per hour (or $114K a year) to a cleaner on W2?

They wouldn't be making anywhere near $114k a year at $55/hr because they wouldn't be working anywhere nearly 40 billable hours a week. It's like any other kind of freelancing. We pay $110 a pop to have our 800 sq ft apartment cleaned every two weeks.
posted by Jess the Mess at 9:00 AM on October 3, 2014 [3 favorites]


To put it more dramatically: they are not creating value, but extracting it.

Matching the work and workers creates value just like classified add for seeking/ offering domestic work added value. The article doesn't detail how much Homejoy's cut is, so I can't comment whether they extract more than their fair share.

There are lot of middle men in modern society. National postal services, phone companies, internet service providers, dating sites, classified ads, etc. That's the cost of moving away from hunter-gatherer society. I do believe that these new middle men platforms add more good to the society than take away. However they are not able to cure all or even most ills of the society. Most cab drivers (maybe black cabbies in London excluded?) or house cleaners have never enjoyed benefits of steady paycheck with benefits. What these platforms can do is increase efficiency and provide more paid hours and less down with flexibility.

To have Silicon Valley companies cure all ills is expecting too much.
posted by zeikka at 9:09 AM on October 3, 2014 [1 favorite]


I wish the Department of Labor would crack down hard ...

The Department of Labor doesn't work for labor.
posted by Gelatin at 9:09 AM on October 3, 2014 [2 favorites]


All you people are wrong, wrong, wrong. The Homejoy CEO says so right here:
"While we sympathize with anyone who is in an economically difficult situation, we don’t think that relating that to Homejoy’s website or its practices makes sense," Cheung says.
You see? All your "theories" about "inequality" and "unfair labour practices" simply don't make sense!
posted by clawsoon at 9:10 AM on October 3, 2014 [6 favorites]


They wouldn't be making anywhere near $114k a year at $55/hr because they wouldn't be working anywhere nearly 40 billable hours a week. It's like any other kind of freelancing. We pay $110 a pop to have our 800 sq ft apartment cleaned every two weeks.

Fair enough, but the promise of these platforms is that they increase efficiency. More worked hours per week means that hourly rates can come down, more people can afford the services and more work (if not traditional W2 jobs) is created.
posted by zeikka at 9:11 AM on October 3, 2014


What these platforms can do is increase efficiency and provide more paid hours and less down with flexibility.

They increase efficiency for the people skimming a cut, not for the people who aren't allowed to work any other times because they must be always on-call.
posted by feckless fecal fear mongering at 9:12 AM on October 3, 2014 [3 favorites]


Mrs. Pterodactyl for God-Emperor!

Oh shit yes I am getting this on an Obama Hope style poster with a picture of a pterodactyl wearing a sweet tiara as soon as I find a graphic designer and some money.


More like a sandworm with a pterodactyl head wearing a tiara... uh.. say yes to drugs.
posted by ennui.bz at 9:14 AM on October 3, 2014 [3 favorites]


Silicon Valley is magical!
posted by Damienmce at 9:21 AM on October 3, 2014


That said, what the hell kind of business model keeps a company afloat when they're paying a contractor anywhere from $34-120 to do a job that they're only charging the customer $19 for?

As has already been pointed out, that $19 was an introductory offer. The abuse of 1099 payments to save employers on labor costs that they should be paying is a real, so writing about it in a way the relies on a misleading anecdote strikes me as a really shitty idea.

I work as a 1099 contractor for a firm that offered to make me a W2 employee when I started doing enough work for them to make that viable, and I declined for a number of reasons. One of the things I do as a 1099 contractor is to advise my clients whether the various types of workers they use should be classified as employees or contractors, and I think the best solution to current abuses is aggressive enforcement by the IRS of the regulations determining how workers are classified.

As OnceUponaTime notes, I've seen signs that this type of enforcement is developing, and I am happy about that as well. But as someone who enjoys the flexibility of 1099 work when I could choose to be an employee instead, I resent scaremongering articles that use deceptive examples to argue against the use of 1099 contractors as an option that makes sense for both businesses and workers in some instances.
posted by layceepee at 9:21 AM on October 3, 2014 [7 favorites]


We hired someone (single mom who owns her own cleaning business) to clean our last apartment before we turned it over (large 2 bedroom in an East Coast suburb) and I think we paid her $150.00 for three hours. Maybe more. Totally, totally worth it. She also came highly recommended and with great references...which seems like an issue for brand new companies with probable high turnover. I would not have wanted to only pay someone $19 or $25 for that. That's insane.

Does the company require the worker to wear a uniform, receive job training, or use tools provided by the company?

Also, isn't this exactly what Homejoy does? How are they justifying their use of contractors?
posted by jetlagaddict at 9:25 AM on October 3, 2014


They increase efficiency for the people skimming a cut, not for the people who aren't allowed to work any other times because they must be always on-call.

Both Homejoy and Uber let their (non-)workers choose their hours. The efficiency benefits all parties the company, workers and customers if the platform is well run.
posted by zeikka at 9:27 AM on October 3, 2014 [2 favorites]


If we're going to keep a capitalist economic system, as opposed to a European-style mixed social democracy, I'm becoming more and more enamoured of the idea of eliminating all welfare whatsoever, as well as the minimum wage & payroll taxes, and replacing them with (1) an expansion of social security funded out of general revenue to all citizens, legal residents, etc., so as to constitute a minimum tax-free basic income for all, the "MBI" set as a living income & with disability, etc., retained, (2) education through grad or professional school at no cost to students, (3) preschool at no cost to parents & (4) a restructuring of the tax code as follows, with the rates set sufficient to fund the government: (a) a carbon tax set at a rate that will make renewable energy more cost effective than fossil fuels (b) a flat income tax, no deductions, (c) a value added tax, (d) a wealth tax of 1-2 percent, with a $1 Million standard deduction & (e) an estate tax of 100 percent, with a $5 Million standard deduction & 100 percent deduction for charitable giving.

I haven't really thought this through, having kind of thought of the above over a few showers, so I'm not sure how feasible it is. But I really like the basic income idea. It seems more efficient. It would seem to relieve some of those workers and eben address some Conservative complaints with the Welfare State. However, I might be missing something, or some undesirable consequence. This is the first time I've written it down I wonder if the numbers would work?

Thoughts?
posted by JKevinKing at 9:34 AM on October 3, 2014 [1 favorite]


JKevinKing: This is the first time I've written it down I wonder if the numbers would work?

Not really.
posted by tonycpsu at 9:35 AM on October 3, 2014


b) a flat income tax

Flat taxes disproportionately affect the poor.

(e) an estate tax of 100 percent

Well, that'd solve a lot of wealth inequality in a generation or two , but it's really simple to get around that sort of thing. Fold all assets into a trust. At least, that's how it works in the UK. Aristocratic families have been losing their incredibly expensive homes--that have been in the family for generations--due to estate taxes. They either have to transfer ownership ten (I think it's 10) years before death, or they create a trust to administer the estate.
posted by feckless fecal fear mongering at 9:37 AM on October 3, 2014 [2 favorites]


(Almost forgot, Medicare for All, funded similar to now.)
posted by JKevinKing at 9:43 AM on October 3, 2014


Feckless,

Have to go back to work, but, yeah, a flat tax would affect the lower incomes more, but the other prongs are meant to make up for that, and there is the basic income.

Tony,

I wonder if the numbers as part of the entire plan would work? Maybe not. I have an economics degree from almost 20 years ago, but haven't done anything with it since then. Maybe I'll try to dust that training off if I ever have time & run some numbers.

Oh well, this is just a thought, and most ideas are wrong, as Lawrence Krauss says.
posted by JKevinKing at 9:50 AM on October 3, 2014



Both Homejoy and Uber let their (non-)workers choose their hours. The efficiency benefits all parties the company, workers and customers if the platform is well run.

I feel like you're just not paying any attention to the inherent problems here. We've had the exact same discussions about Uber, Washio, Alfred, all the rest... these 'platforms' exploit workers, period.

The company claims these people are making $17-20/hr. Okay, let's say $20 because it's a round number. Now deduct: payroll taxes, Social Security, and whatever other payroll deductions are mandatory. Factor in that (unless I'm grossly mistaken) you can't claim unemployment or worker's compensation. Then add that you have exactly zero legal employment protections, because those apply to employees and not independent contractors. These 'platforms' are straight out of the conservative handbook: privatize profits and socialize costs.

Regarding the minimum income idea, this stands out from tonycpsu's link:
The big question is whether current workers will respond by leaving the workforce and relying on the basic income.
That question has been studied and answered. tl;dr version: Not really, and the benefits--parents (in that case mothers but it was the 70s) staying home with new children; teenagers focusing on school instead of work--more than outweigh any negatives there. Other major societal benefits were found too:
...in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidents of work-related injuries, and fewer emergency room visits from car accidents and domestic abuse.[6] Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.[7][8]
(emphases mine) (direct link to the most recent study on the data; PDF)

So, from the data we have on this actually being done, it does work. It's a shame that it doesn't look like longitudinal quality-of-life assessments were carried out, but given what the numbers show I'd be surprised if people didn't feel their quality of life went up. No more worrying about paying the electricity or gas bill (in Manitoba winters that is a highly non-trivial concern). No more worrying about food on the table. No more worrying about the rent or mortgage. Stress kills people, and removing stress around the most basic of living needs--shelter and food--you will already find a massive jump in satisfaction.
posted by feckless fecal fear mongering at 9:55 AM on October 3, 2014 [12 favorites]


To put it more dramatically: they are not creating value, but extracting it.

Really? This service--and the promotion and client recruitment that they provide--are actually very valuable for the people who work there:
To illustrate this point, Linsey showed me the interface that Homejoy created for cleaners to identify exactly where they are and aren’t willing to work. Originally, he said, cleaners identified their working areas based on zip code, but that turned out to be too broad (for example, many of the cleaners rely on mass transit, so in parts of the San Francisco Bay Area, many of them can only work near a BART stop). Now Homejoy gives them a tool where they can draw the exact, custom borders of their work area.
Right now cleaners have to build up business with word of mouth, schedule a small set of people who may have restricted schedules, deal with negotiation and payment (no credit or debit cards, enjoy getting cash and checks), deal with people who don't pay them...running a cleaning business involves a significant amount of time and organizational overhead that this company seems to be providing, along with client referrals.
posted by the young rope-rider at 9:55 AM on October 3, 2014 [5 favorites]


It's important to realise that not only is this a way of downloading employment costs (insurance for injury, liability, benefits) down the employee, it also pushes risk out to the customers. Are the contractors of these services bonded, as most maid services are? Does an Uber driver have the same level of insurance and regulation as a taxi, like in-car cameras? Uber drivers, for example, don't have commercial insurance when on call but not carrying a rider.

Technointermediation isn't just a bad deal for the "employees", it's a weakening of consumer and social protections too.
posted by bonehead at 9:58 AM on October 3, 2014 [7 favorites]


Getting away from flat taxes and the like, invert the thinking on minimum wage and hash out a maximum wage. The money is gushing like a fountain out of the tops of large companies, cap it and watch as its forced down into infrastructure spending (jobs), wages (finally), or savings for the company (something about companies with too much capital being outcompeted).

If maximum wage sounds Real Bad then ask yourself if infinity/hour compensation in your-favorite-currency is possible for an individual to earn. Hopefully the answer is no (because seriously, infinity/hour is the paperclip AI problem) and the question then becomes where to peg the max to prevent the paperclip AI-but-in-suit-form problem from being a real thing. Or more of a real thing than it already is. That question, in addition to how to enforce it when the internal security apparatus is focused on threats to the state instead of threats to national stability, how to keep people from cheating the new system, and how to make the system agile enough to catch loop-holes found before the next taxes due date.

Not that I have much hope of maximum wage catching on or of any solution to this craziness doing so before capitalism enters the late stage of the life span associated with networked mold-like intelligences/grey-suit goo.
posted by Slackermagee at 10:02 AM on October 3, 2014 [4 favorites]


Also I should note above that I'm talking about independent cleaners who work for themselves. Cleaners who work for agencies are among the most poorly treated workers in the US. Brutal conditions and blatant disregard for employment law is the norm.
posted by the young rope-rider at 10:02 AM on October 3, 2014 [2 favorites]


the young rope-rider: running a cleaning business involves a significant amount of time and organizational overhead that this company seems to be providing, along with client referrals.

Yes, but on the other side of the ledger are the things elwoodwiles rightly points out are missing when you go with one of these services. The question is whether, on balance, the people working for the services are better off, and I don't think we have a clear answer. An article like this is a good antidote to the starry-eyed utopian hype that these services have generated. They will be good for some, but bad for others, and we ought to decide as a society how comfortable we are with these services becoming larger, gaining more bargaining power to push out freelancers, etc.
posted by tonycpsu at 10:03 AM on October 3, 2014 [3 favorites]


the young rope-rider: Brutal conditions and blatant disregard for employment law is the norm.

So the solution is... a service that isn't even accountable to the employment laws, rather than one that is?
posted by tonycpsu at 10:04 AM on October 3, 2014 [1 favorite]


Now Homejoy gives them a tool where they can draw the exact, custom borders of their work area.

Oh and specifically this? As an occasional weekend/evening babysitter I would LOVE this. Care.com and sittercity.com have nothing similar and they are continually suggesting jobs that are impossible for me to get to.

Speaking of shitty epxloitation, Sittercity and Care.com are two undoubtedly shitty middleman businesses. They actually CHARGE jobseekers for using several features, and provide very few services to them. Their built in minimums for wages offered? Lower than minimum wage. It's disgusting.
posted by the young rope-rider at 10:06 AM on October 3, 2014 [1 favorite]


A friend of mine with a small IT consulting service was recently offered a contract job that required being on call 24/7 paying $10/hour for work done when work was required (I think the showing-up-onsite response time had to be within 4 hours or something). Yeah, he sent them a furious response.
posted by The Great Big Mulp at 10:08 AM on October 3, 2014 [3 favorites]


I'd be very careful drawing comparisons between Canada and the US here. Canadian employment law is very different from the complicated classifications of workers and corporations in the US. Our tax laws are also different as well. It's frequently true here that being a contractor for the same wage is financially quite a bit more beneficial than being an employee because of tax deductions, credits and rebates (both income tax and HST). There are benefits and cautions to both sides in Canada, and I'm pretty sure that the US situation isn't very comparable to the Canadian experience.
posted by bonehead at 10:17 AM on October 3, 2014


Yes, but on the other side of the ledger are the things elwoodwiles rightly points out are missing when you go with one of these services.

They're not, though. As mentioned, the options are to work for a service--and they are primarily among the shittiest of employers paying minimum wage--and being an independent cleaner with all of the organizational overhead that comes with it.

You do correctly identify independent cleaners as at risk from business models like these. They do set relatively low prices and increase the number of available employees, which is a significant concern, especially as IME independent cleaners are often immigrant women who are typically supporting their families, including husbands who can't/don't work, children, people back home, etc.

So the solution is... a service that isn't even accountable to the employment laws, rather than one that is?

The solution is for people to give a shit about poor people, and poor women especially; the solution is a robust social safety net so that employers are forced to give a shit about poor people because otherwise they won't be able to find any to employ.

This service, as I have pointed out, may actually be an improvement--if the labor laws are not being enforced either way (and these people actually seem to gain many of the benefits of contract employment) then better to work for people who don't require you to dedicate 50+ hours a week to your job, work even when you're very sick, handle hazardous chemicals, constantly change your schedule, sleep with the boss, etc.

I feel like you're setting up this false dichotomy between some kind of ideal W2 employment situation where all the labor laws are enforced and this wild west of contractual employment. That's not the actual choice here, which is an utter tragedy, and one that should not be glossed over in service to an argument against this particular business.
posted by the young rope-rider at 10:19 AM on October 3, 2014 [3 favorites]


On what basis are you implying that people here are being hypocritical?

Wasn't meant to be an accusation as much as an invocation--I use Amazon and Diapers.com all the time which is just as bad, and I need to cut down on that shit too. Just calling for everyone reading these articles and feeling outraged to go ahead and call MerryMaids or some other real business rather than assisting companies like this.

As TYRR points out--Homejoy (like Uber and so on) does do a lot to allow newbies to jump into a job that it would normally take years of work to break into. In the short term--that's great! A homeless guy gets some money for physical labor. In the long term though you're undercutting professionals who rely on their years of experience and relationship building in order to charge enough to comply with labor laws and wage laws etc. and the end state is a everyone in the home cleaning industry working part time for much less with 0 oversight or chance at a full time job with benefits etc.

Shit I use Mechanical Turk at my job too. It's like the entire internet is conspiring to make it easier and easier for us to exploit each other.
posted by Potomac Avenue at 10:22 AM on October 3, 2014 [3 favorites]


Not sure if that was directed at me, bonehead, but the only Canada comparison I was drawing was with MINCOME. (and per the study I linked, the Seattle-Denver experiment as well as others performed in the USA had virtually identical results.)
posted by feckless fecal fear mongering at 10:22 AM on October 3, 2014


The solution is for people to give a shit about poor people, and poor women especially; the solution is a robust social safety net so that employers are forced to give a shit about poor people because otherwise they won't be able to find any to employ.

Good point!
posted by Potomac Avenue at 10:23 AM on October 3, 2014 [2 favorites]


the young rope-rider: I feel like you're setting up this false dichotomy between some kind of ideal W2 employment situation where all the labor laws are enforced and this wild west of contractual employment. That's not the actual choice here, which is an utter tragedy, and one that should not be glossed over in service to an argument against this particular business.

And I feel like you're not acknowledging that when labor laws aren't being enforced, there's an option that goes by the name of "enforcing them" that doesn't require us to abandon them simply because it makes some aspects of the worker's employment easier.

Yes, there is a sliding scale between full W-2 employment and a totally independent contractor, but you're downplaying the negatives of becoming a contractor based on the fact that we're not enforcing the laws. That's a conscious choice that comes with how we fund our government agencies, and it can be changed -- certainly a lot more easily changed than bumping the safety net up to the point where people could make a credible threat of turning down a shitty job.
posted by tonycpsu at 10:26 AM on October 3, 2014 [1 favorite]


Journalism seems to be increasingly inhabiting an ivory tower

Actually Carrie Tower, at Brown university, is made of brick and limestone, not ivory. I think you owe our entitled little snit of a writer an apology.
posted by any major dude at 10:27 AM on October 3, 2014


(And believe you me, I will cheer on every penny we put into making the safety net more robust, but to fund it to the point where it could change the equation for people making minimum wage is way more expensive than beefing up labor law enforcement or hiking the minimum wage itself.)
posted by tonycpsu at 10:28 AM on October 3, 2014 [1 favorite]


I feel like you're setting up this false dichotomy between some kind of ideal W2 employment situation where all the labor laws are enforced and this wild west of contractual employment.

This is a great point, and something I've been thinking about. The whole reason these companies can find workers is because there are so few options. In the face of declining in wages and opportunities people still have to pay their rent. Since what was once considered a job is now unavailable they make due with Washio or what have you.

The plight of the working poor is not the fault of Uber of X companies, but it has been to their benefit. I see a lot of people ignoring this fact, when really we should be alarmed by it.
posted by elwoodwiles at 10:29 AM on October 3, 2014 [4 favorites]


anyone in NYC at the turn of the century remember Urban Fetch? I always remember that as the point when the wings started to melt ever so slightly...
posted by any major dude at 10:37 AM on October 3, 2014 [2 favorites]


And I feel like you're not acknowledging that when labor laws aren't being enforced, there's an option that goes by the name of "enforcing them" that doesn't require us to abandon them simply because it makes some aspects of the worker's employment easier.

Of course there is, nominally, the option of enforcing laws. You and I don't have that option, and nor does this business.

(As an aside, it seems that enforcing these laws must be almost impossible in a setting where workers benefit from the laws not being enforced. Even an inhumanly bad employer is better than, say, watching while child gets their foot amputated because you couldn't take them to the doctor for their diabetes, or being deported to leave their minor child alone in the US. For this reason, without a sufficient social safety net, you can't even get employees to participate in reporting labor violations. Anyway.)

The goal of enforcing labor laws, or even of garnering public support for the enforcment of such, is not in any way served by implying that the current labor conditions are substantially better than the labor conditions created by this business. To imply that is to imply that the conditions aren't all that bad--but they very much are.

The key to avoiding that implication is not to avoid criticizing this business, but to avoid being so eager to criticize this business that you concurrently bolster the reputation of the current employment situation for household employees (or in the case of Uber and similar, the current employment situation for taxi drivers).
posted by the young rope-rider at 10:51 AM on October 3, 2014 [1 favorite]


Part of being an adult means that you take the time to learn about what, exactly, you're getting yourself into.

In these predator-friendly times, learning what you're getting yourself into can be a full time job all by itself.
posted by Flexagon at 11:09 AM on October 3, 2014 [7 favorites]


the young rope-rider: The goal of enforcing labor laws, or even of garnering public support for the enforcment of such, is not in any way served by implying that the current labor conditions are substantially better than the labor conditions created by this business. To imply that is to imply that the conditions aren't all that bad--but they very much are.

Having the laws to fall back on beats not having them, even if they're not enforced as often as you and I might like. They are, in many cases enforced (just a few of the top Google hits -- there are many more) and in many cases, the services use the "independent contractor" dodge to try to get out of giving their employees what they're owed.

You may have anecdotal evidence that the services are terrible, and certainly people who choose to go it alone or go with the Homejoy model can serve as a useful check on these services, but so to can enforcement of laws that are already on the books, and that in and of itself can lead to worker protections that are in fact substantially better than what one gets elsewhere.
posted by tonycpsu at 11:09 AM on October 3, 2014


I'm curious if there are attempts by cleaners to set up worker-owned hiring websites or agencies.

SF Day Labor - rates start at $50/hour for the first three hours.
posted by bendy at 11:16 AM on October 3, 2014


It's like the entire internet is conspiring to make it easier and easier for us to exploit each other.

The Internet is all about Free... as in Speech AND as in Beer (that actually costs money to make, but that doesn't matter, right?)
posted by oneswellfoop at 11:18 AM on October 3, 2014


But in this case, the whole thing is a setup. It's highly unlikely that these employees can legally be 1099s, and sooner or later, someone will notice. And when that happens, it's the cleaners who will be fucked

If the IRS steps and reclassifies the workers, Homejoy is who is going to get fucked, not the workers. I guess the workers could be worse off because Homejoy gets run out of business, but it's not like the IRS goes after the workers in the "contractor should really be a employee" situations.
posted by sideshow at 11:34 AM on October 3, 2014


Technointermediation isn't just a bad deal for the "employees", it's a weakening of consumer and social protections too.

Well first of all that's not a consequence of "technointermediation," it's a consequence of the way these companies do it. Which in many cases involves positioning themselves in what's at best a legal grey area and hoping that by the time enforcement catches up they have the power to fight it. And while I'm not exactly a free-marketeer, when I see this argument come up (in the case of Uber in particular) I think - do I want or need this protection or is it something the current monopolists tell me is important as a way to justify (and self-justify) their dominance and importance? This isn't a case of "everybody has to buy health insurance to make it work the way we want" - you're going to have to convince me that cameras in taxis solve a significant problem (insurance is an easier sell) especially since the nature of the service inherently puts drivers under a degree of surveillance.

And I guess my last relevant hobbyhorse is that I think it would be wonderful to loosen ties between employers and employees if there were an actual universal safety net in place. But I don't have any illusion that making the former happen first would force the latter.
posted by atoxyl at 11:35 AM on October 3, 2014


you're going to have to convince me that cameras in taxis solve a significant problem (insurance is an easier sell) especially since the nature of the service inherently puts drivers under a degree of surveillance.

The cameras in taxis are to protect the drivers and provide evidence in case of robbery and/or assault, which is common.
posted by feckless fecal fear mongering at 11:39 AM on October 3, 2014 [1 favorite]


The cameras in taxis are to protect the drivers and provide evidence in case of robbery and/or assault, which is common.

Well that makes more sense (to the point that I feel kinda stupid actually) but I was responding to something that appeared to position it as a customer protection.
posted by atoxyl at 11:42 AM on October 3, 2014




I think at least part of the problem, not in this case maybe, but overall with people classifying workers as "Independent Contractors" is that a great many business people who really ought to know better have no idea what the rules are. They don't want the hassle of doing e-Verify or to pay the employer's portion of taxes. They, in most cases wrongly, think that if you actually hire people that makes it difficult to fire them. That or their business is very cyclical, so they don't want to have to lay people off, and let them collect unemployment, every few months. That's the entirety of their thinking. There'a a nearby business that sets the start and end times of the workday and prescribes the manner by which the work product is to be assembled. All the workers are "independent contractors."

I'm stunned at the number of reasonably successful businesses I've encountered where it seems like the education in business matters of the proprietor comes solely from what they've seen in movies and on television. Sometimes not even that. Just as a for instance, I knew a guy who did event equipment rentals for-hire. He improperly charged his customers sales tax, which they did not owe on a service, and then kept it. His justification was, "All them sumbitches charge me sales tax. I'm just taking my fair share."
posted by ob1quixote at 12:34 PM on October 3, 2014 [10 favorites]


Oh shit yes I am getting this on an Obama Hope style poster with a picture of a pterodactyl wearing a sweet tiara as soon as I find a graphic designer and some money.

Prolly find someone to do it on Elance for $19... :-)
posted by randomkeystrike at 1:05 PM on October 3, 2014 [2 favorites]


The plight of the working poor is not the fault of Uber of X companies, but it has been to their benefit. I see a lot of people ignoring this fact, when really we should be alarmed by it.

Actually, it is to a degree their fault, which comes back to something that I said in an earlier thread: exploitation is less about the exploited, and more about the exploiter. These firms might not be the root cause of the problem, but they are making it worse.
posted by NoxAeternum at 1:09 PM on October 3, 2014 [4 favorites]


but it's not like the IRS goes after the workers in the "contractor should really be a employee" situations.

I believe that if the IRS does crack down on this, the workers stand to gain because they will retroactively not be liable for the self-employment tax. HomeJoy will owe it to the IRS and the workers can re-file to get refunds.

At least I think this is how it works. I actually work for a majority-1099 company myself and have done some research because like this circumstance, I'm not entirely sure that mine isn't misclassified.
posted by feloniousmonk at 1:13 PM on October 3, 2014


My house cleaning service hires all their cleaners as W2 employees. It's the main reason we chose them over their competition. These people are cleaning the areas where we sleep, eat and feed our child, while we're not around. I'd rather know they resent me and my family as little as possible given the circumstances.

We pay about $55/hr/cleaner, I think. We could go a lot cheaper but every time we bring it up we feel too weird about firing the cleaning service that provides health benefits and paid vacation to save a couple hundred bucks a month.
posted by town of cats at 1:40 PM on October 3, 2014 [9 favorites]


Carillon: My lawyer friend just recently linked me a ruling about FedEx and whether or not their 'contractors' were actually employees. Apparently that bullshit didn't fly there either and they ruled against FedEx, not in the least because they're wearing the damn livery of a company. I mean if that's not a clear indication of employee I don't know what is!

Great! now do the same thing to UPS. Ugh, please.
posted by emptythought at 1:42 PM on October 3, 2014


>I went and looked for the benefits to being a 1099 contractor and the only thing I could find was that their checks are larger than W2 employees. But since their checks are larger because no taxes are being taken out and they don't have any benefits deductions I hardly think that is a plus.

>smackfu: It's a benefit if you don't plan to pay taxes.


Oh, the old excuse, "I'm doing them a favor because they won't have to pay taxes."

It's called 1099 contracting because the company fills out a Form 1099 and files it with the IRS. (You can look it up.) The 1099 has your name, address, social security number and total money paid to you. If the IRS receives a 1099 from the company and you don't include that income on your tax return, they will come after you for back taxes and penalties. A tax debt can never be discharged by bankruptcy. They can seize your property and garnish your wages. They can even garnish your social security.

So, no, 1099 contracting is not a tax dodge for the worker. It is only a tax dodge for the employer.
posted by JackFlash at 1:44 PM on October 3, 2014 [15 favorites]


FWIW, in NYC it is flat out not legal to 1099 a domestic employee.

Only if you employ the domestic yourself directly. Many domestics hired through agencies are 1099 contractors. Homejoy is a good example.
posted by JackFlash at 1:52 PM on October 3, 2014


I'm told that because of people abusing the independent contractor laws, the IRS is coming down hard on making sure that all "independent contractors" really are independent contractors. For this reason my company has instituted policies which make it really hard to contract labor from a small specialist businesses (like the coating and cutting companies) and really, really, really hard to contract a person who does not own a business, like the university professors.

You are being told wrong or your HR people are idiots. Apple, Google, Microsoft and others employ thousands of 1099 contractors. Hiring a professor for a 1099 short term contract isn't even on the radar. Any expert you want to hire for R&D special projects who is not employed 40 hours a week for 52 weeks a year has zero risk of being classified as an employee. And unable to contract labor from another business? Is that a joke? That is the easiest way to contract labor.
posted by JackFlash at 2:02 PM on October 3, 2014


I'd actually like it if we could standardize on a 1099 style model for selling labor with good worker protections. The employer-employee relationship always felt a little feudal and paternalistic to me.

A proper labor movement of 1099-style workers demanding the kind of protections typically offered by employers - maternity leave, paid vacation, health insurance, unemployment insurance, education benefits, etc, all guaranteed by the federal or state government. No more distinction between part time and full time workers - both parties can agree to whatever schedule works for them (with legal protections about how much unpaid "availability" an employer can require) and terminate the relationship at any time. Workers have a guaranteed fall back income from the government.

Businesses have more predictable labor costs, and have less overhead in their hr departments. Smaller businesses find it easier to get just as much help as they need and have more flexibility to hire and let people go. Workers have more stability, with guaranteed pay and benefits independent of their employer - no one needs to beg their boss for maternity leave or vacation time. The labor force becomes more stable and resilient to downsizing and market shifts.

I know it's just a dream, but I think that would be a better world.
posted by heathkit at 2:07 PM on October 3, 2014


heathkit, I think where that breaks down, even if we could get past the logistical hurdles, is that the scheme you're talking about would a lot better arrangement for the employer than the employee, because an employer being down one or two employees who happen to sever the agreement at a given time is a lot less painful than an employee losing their only source of income. Changing where the taxes are collected really does nothing to change the natural imbalance of power that results from the employee typically needing the job more than the employer needs them at that particular moment.
posted by tonycpsu at 2:14 PM on October 3, 2014 [3 favorites]


heathkit, I think where that breaks down, even if we could get past the logistical hurdles, is that the scheme you're talking about would a lot better arrangement for the employer than the employee, because an employer being down one or two employees who happen to sever the agreement at a given time is a lot less painful than an employee losing their only source of income. Changing where the taxes are collected really does nothing to change the natural imbalance of power that results from the employee typically needing the job more than the employer needs them at that particular moment.

Well nobody is losing their *only* source of income - unemployment insurance and other benefits guaranteed by the state are an essential part of the proposal. I get that this still doesn't work if you've got enough debt or enough kids but I can think of ideas for protections to help with that too - a period of amnesty for payments, credits for all sorts of things. That's a big tax on *somebody* obviously but as far as economic burden of regulation goes most small-business owners I know would be *delighted* not to have to handle stuff like employee health insurance themselves so there's that.

I dunno. I'd take that deal - I liked being a 1099er too, keeping in mind that I was *actually* independent and doing something that paid well - not that I have reason to believe it's more than a thought experiment.
posted by atoxyl at 2:34 PM on October 3, 2014


Another thing I just remembered about being a 1099 employee is that your income doesn't count as verifiable for the purposes of getting a mortgage unless you create some kind of corporation or similar legal entity and then do all of that paperwork as well. If you're making good money this is no big deal but if you're in one of those bogus formerly-non-contract contract positions, it could be a real problem.
posted by feloniousmonk at 2:50 PM on October 3, 2014


I was a 1099 employee until 2 weeks ago. After years of "seasonal employment," my entire division got shut down and outsourced. We all got fired with two days notice, right in the middle of a project, they even canceled the next project with two months of work I had already committed to. I am guessing that the company decided it was too expensive to start giving us all health care benefits next year under the ACA. That's why we were all 1099 subcontractors, these positions used to be full time but they wanted to avoid giving benefits. At this point, the company no longer creates any of the products it provides. If you outsource all your company's core functions, you're not a company, you're a website.
posted by charlie don't surf at 3:14 PM on October 3, 2014 [11 favorites]


For a while now, companies have been replacing workers with "temps" who stay in the same job for years at a time, in order to get around having to pay them the benefits that are due them. This strikes me as very much the same thing.
posted by vibratory manner of working at 3:27 PM on October 3, 2014 [4 favorites]


Can't stop laughing at this "ivory tower" talk of journalism, remembering that my weekly wage as a daily beat reporter was $50/week.

In 1992.

And I was required to develop my own film as well as write feature articles and cover the overnight crime reporting... at 6 a.m., 7 days per week.

Self-employment used to be easier when you could put your "tax money" aside in a savings account and watch it grow a little before paying out each quarterly assessment (caveat: US only). I know, because this is what I did at my previous job that only hired "contractors" for a max of 38 hours per week, one-year contracts at a time (so we wouldn't qualify for benefits - gotta love the nonprofit sector).

Now, that's really not even an option.

TL;DR: If you're not rich now, you're probably already fucked, regardless of your current locale/profession (US residents only - I wouldn't presume to judge about other countries' positions).
posted by Unicorn on the cob at 4:04 PM on October 3, 2014 [3 favorites]


Self-employment used to be easier when you could put your "tax money" aside in a savings account and watch it grow a little before paying out each quarterly assessment (caveat: US only).

Partly because you used to be able to get a savings account where the amount of interest you would earn on a year's worth of taxes would make a difference.
posted by layceepee at 4:30 PM on October 3, 2014 [2 favorites]


The company's terms of service states that "if Handy.com is found to be liable for any tax or withholding tax in connection with your use of Users' services, then you will immediately reimburse and pay to Handy.com an equivalent amount, including any interest or penalties thereon." In other words, if Handy.com is forced to reclassify its contract workers as employees, its customers – not the company itself – will be on the hook for any extra costs.

I've sometimes worked under the Canadian version of 1099. You don't always have to incorporate but you have to have a tax number, since sales tax is chargeable on services.

And yeah, my contract had that stupid clause. I don't know how enforceable it would be, if the company or end client actively created the infringing condition. Under "contract" via an agency, a big client still treated me like an employee. They even said I had to 'request' my (unpaid) 'vacation' when I wanted time off. Of course, after spending a year on what was to be a 3 month contract, they let me go with two days notice.

I'm still contracting, but in a good paying field. I'm older, reasonably secure, and I like the freedom. I find my own gigs, so I don't have to lose 25% of the hourly to an agency that does about fuck all else besides placing ads and working the phones.

But 1099 style contracting is not a model to build a society around, UNLESS a livable base income and decent benefits for all are a given.
posted by Artful Codger at 8:11 PM on October 3, 2014


I always mean to do the math someday to show how much worse being a 1099 contractor gets for you the less money you make. Because you don't pay social security/medicare on money you make after the first $117,000(ish), if you make, say, $500,000, the double ss/medicare tax really isn't that big a deal to your bottom line. On the other hand, if you make around $25K that double ss/medicare is a huge hit, and your W2 counterpart who doesn't have to pay that extra 7.65% payroll tax comes out way ahead. I guess the lesson is only be a contractor if you're going to be egregiously wealthy.
posted by matcha action at 8:42 PM on October 3, 2014


the one who was about to perform arduous manual labor in my house using potentially hazardous cleaning chemicals — homeless?
What did you expect for $19, you spoiled asshat.
posted by uni verse at 9:54 PM on October 3, 2014


It's been mentioned a couple of times above, but $19 for a 2.5-hour cleaning was a one-time introductory deal. HomeJoy's current rates for a studio apartment range from $67 for their cheapest cleaning to around $200 for a full cleaning that includes appliances and windows. That's still incredibly cheap for San Francisco, but it's not even close to the $19 that people keep throwing around.
posted by mbrubeck at 7:40 AM on October 5, 2014 [1 favorite]


(FWIW I think the general point is still completely valid whether it's $19 or $67.)
posted by mbrubeck at 7:48 AM on October 5, 2014


The comments on that one are impressive.
posted by asperity at 2:50 PM on October 22, 2014


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