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09/16/2019

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Woulda-shouldas don't rule... people act in ways they believe are in their own best self-interests, regardless of the effect on others.

Economic mechanisms, ethical/religious systems, social structures, professional practices and government regulations all operate to hopefully block the worst excesses that occur. But people learn by mistakes. Nearly all laws are retroactive reactions to socially harmful behaviors.

Preventive measures are rarely effective, because no one accepts the need for sandbags until after the flood. Hindsight is 20-20 and all that stuff...

We regular writers here are Compensation Cassandras, charged with forecasting potential outcomes from early trends. Pointing out unintended consequences is an essential element of the Total Rewards trade.

Tough job, unpopular and unrewarded; but someone has to do it.

How is this CA law different from the Federal independent contractor classification? Sounds very similar to me, which means the employees should not have been classified as independent contractors in the first place.

The IRS tests seem the same. Here is the final section of the standards tested in the Relationship section: "Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company."

Guess CA just wants its own staff making those determinations rather than Federal IRS Agents. Possible duplication of effort, unless CA will be stricter. They need money, so... not hard to guess...

I read that Uber still plans to classify their workers as independent contractors. If so, they might have an issue with CA and the IRS rule since their entire business is providing transportation. Seems like the primary indicator might be the key business activity aspect. Even if we hire someone to fulfill a role on a temporary basis, normally filled by someone else, I could use an independent contractor, if all other criteria were met, as long as that role is not providing a key business service of ours. Okay for operational roles then maybe, but not for sales roles if that is the business' primary activity.

Thought Uber was claiming they are a "technology" firm, probably "just a lead-forwarding service to vendors who meet their specs" like a union hiring hall that denies being "an employment agency."

Not working in CA any more, thank goodness, so I don't know for sure. I am quite confident that they will jump all over any suspected offender now. With their duplicate law, if they beat the IRS to the punch and charge the employer first, they get the State-specified fines and penalties. They need the dough and should be aggressive.

Is there double jeopardy, though? If CA gigs you, are you still vulnerable to an identical IRS assessment, too? Maybe they will share victims, as they did with OT violators and IRC 4958 offenders.

Tough time to be a CA employer... fer shure...

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