OT: California's New "Gig Economy" Law. Anyone directly affected?

[XXtwindad]

AB5 was signed into law the beginning of the year. Anyone on the Forum directly affected? Anyone have any idea what this portends for companies like Lyft, Uber and others? It would also pertain to manicurists, exotic dancers, musicians, etc.

It certainly might set a precedent for other states.

https://www.vox.com/policy-and-polit...es-contractors

[andeww]

I am an exotic dancer, no issues.

[XXtwindad]

Originally Posted by andeww

I am an exotic dancer, no issues.

Well, far be it for me to criticize, but you have to come up with a better name. I hope you have good stage music.

[buddybikes]

Friend of mine managed a antique vendor market, the owners refused to accept her as an employee. They since closed (after working there for 10 years) and she is SOL with unemployment or COBRA. Hope this spreads nationwide.

[Dekonick]

Well, let's watch and see. My bet: Job losses overall and an increase in the underground economy. IRS won't like it.

[Dekonick]

Originally Posted by XXtwindad

Well, far be it for me to criticize, but you have to come up with a better name. I hope you have good stage music.

At least add a third X...

[jlwdm]

Definitely two sides to this one. I sure would not want to be an employer of Uber drivers if they were employees. Working when they want and in their own cars. Hard to supervise these "employees."

There will be quite a few independent contractors who will not get hired as employees - not good enough. Might have to eliminate these independent contractors before a law becomes effective.

I am an independent contractor and do not want to be an employee. I like more independence.


Jeff

[Ralph]

It's kinda complicated. Soon after I retired, a friend of mine asked me if I was interested in a part time job....in an auto restoration shop (Mostly $300,000 Shelby Mustangs or old BOSS 302's). He payed me with checks usually, and at end of year he used my wage cost as an deduction for his business, sent me a 1099 as a contractor, forcing me to pay both sides of SS plus income tax. Actually I was supposed to pay these quarterly, but didn't know he would send out a 1099 until year end.

Problem is....By IRS rules, I couldn't legally be a contract employee. I worked regular hours, and did all the work at his shop under his direction. I quit soon after that. Didn't like to work illegally.

So....I just wonder how many people doing so-called contract work are legal contract workers, actually pay their taxes.....state or federal? How many wind up some day with no SS benefits because they didn't declare any SS earnings....or pay taxes on them? Then the public pays.

There are, of course, people who are legal contract workers. People who pay both sides of their SS plus income taxes. But IMHO the reason most employers want their employees to be considered contract workers is so they don't have to pay their side of SS, work mans comp insurance, health insurance, or any other benefits.

I'm guessing the new law will cause some people to lose the low pay jobs they have, but I'm not very sympathetic to UBER or LYFT crying over this.

[Ken Robb]

I was a real estate broker in CA. for 36 years. Most of that time I was an independent contractor and paid BOTH sides of Social Security and made Quarterly estimated income tax payments to the Feds and State of CA. plus health insurance was totally my expense too.

Some years I was a manager for offices and paid a salary. Sometimes I even got company subsidized health insurance. My salary recognized me as an employee so taxes were withheld 1/2 of SSI paid by my employer.

I can make a case for either situation better for a worker depending on the nature of the work and how regular the hours might be.

[unterhausen]

I have done consulting in California. Engineering consulting can look a lot like being an employee. I worked with someone that stayed in CA all summer one year, he probably was an employee, but treated as a consultant. OTOH, pay was high enough neither of us were crying about the taxes.

[likebikes]

1099 is such a raw deal unless you're a white collar professional and can build the costs into your consulting fee/hourly rate etc.

[Tandem Rider]

Any company complaining about this is openly admitting to taking advantage of their employees. Taxes and insurance have to be paid, either by adding wages to the worker or upfront by the employer.

[Dekonick]

Originally Posted by Ralph

It's kinda complicated. Soon after I retired, a friend of mine asked me if I was interested in a part time job....in an auto restoration shop (Mostly $300,000 Shelby Mustangs or old BOSS 302's). He payed me with checks usually, and at end of year he used my wage cost as an deduction for his business, sent me a 1099 as a contractor, forcing me to pay both sides of SS plus income tax. Actually I was supposed to pay these quarterly, but didn't know he would send out a 1099 until year end.

Problem is....By IRS rules, I couldn't legally be a contract employee. I worked regular hours, and did all the work at his shop under his direction. I quit soon after that. Didn't like to work illegally.

So....I just wonder how many people doing so-called contract work are legal contract workers, actually pay their taxes.....state or federal? How many wind up some day with no SS benefits because they didn't declare any SS earnings....or pay taxes on them? Then the public pays.

There are, of course, people who are legal contract workers. People who pay both sides of their SS plus income taxes. But IMHO the reason most employers want their employees to be considered contract workers is so they don't have to pay their side of SS, work mans comp insurance, health insurance, or any other benefits.

I'm guessing the new law will cause some people to lose the low pay jobs they have, but I'm not very sympathetic to UBER or LYFT crying over this.

SS benefits are essentially a forced savings plan. If you don't save, you don't collect. This is lost on far too many people who see them as entitlements. Just like a 401K, if you do not invest, you do not collect. It does not matter if you are an employee or a contractor. The government, on the other hand, WANTS your tax money. Contractors, those who follow the law, pay tax. MANY don't... The state doesn't like not getting money - and will take steps to collect. There - California's law simplified.

My issue has more to do with government interference than anything else. Take responsibility for yourself and your family. Save, plan, invest, don't expect anything from anyone else. It isn't government's job to provide for you. Trust me, I work in both universes. Government is by far the most inefficient model I have ever seen. Thank God they don't build much but instead contract to private business... who use contractors...

[cmg]

i was a paid contractor but really an employee until i got the 1099 and had to pay taxes. Job didn't pay enough to pay the taxes so i quit got another job that did. Don't suspect much will change. Employers will declare part time employees ineligible but require 38-39 hours of work. employers will always look to pay the lowest possible wage.

[prototoast]

If you are independent now, there is a 20% tax deduction you can benefit from (subject to restrictions above a certain income level), thanks to the 2017 tax law change.