Posted on 09/09/2018 2:29:00 PM PDT by lowbridge
Some small businesses are scrambling to figure out how to stay afloat after a high court ruling.
A recent California Supreme Court decision is changing the way independent contractors are classified, and it’s already having a big impact on local shops. May fear it will hurt millions of workers and affect businesses’ bottom lines.
The work doesn’t stop at Downtown Sacramento’s Bottle and Barlow, even if it became a one-man shop.
“I lost my entire staff,” said owner Anthony Gianotti.
He says all seven of his barbers quit after a state supreme court ruling that will change their way of work.
“It doesn’t just affect my business, it affects every independent contractor in the state of California,” said Gianotti.
Historically, the cosmetology industry, which includes barbers and hair stylists, have been classified as independent contractors, but that won’t be the case anymore. Gianotti explains the new rule.
“That you cannot classify someone as an independent contractor if they offer the same service that is the primary business of the business.”
-snip
So, basically, a barber can no longer work in a barbershop as an independent contractor, where they typically set their own hours and pay. Instead, they’ll now have to become employees of the business on an official payroll.
“Which is insane for a small business, like this. We can’t afford to have a bunch of employees. What are you going to pay them you know, minimum wage?” said Victory Ink Tattoo owner Ristina Rodriguez.
(Excerpt) Read more at sacramento.cbslocal.com ...
Ugh.
I spose next time I need a hairs cut I’ll find out IF my favorite shop is still in business.
It would be an utter fantasy to limit it to one physical location in this case, since their places of businesses are around the world. If they provide their own services, then neither should be able to pay people as independent contractors.
What were the democrats complaining about the other day during the Kavanaugh hearings? Oh, yeah, the real world impact of their rulings on real people.
Maybe the barbers create their own LLC businesses and then contract corp-to-corp with the barbershop as a business transaction. They then file Schedule C on their tax return. Not a big complication beyond the cost and paperwork to create and maintain the LLC. Probably a fortune in California.
So a software company can’t hire contractors?
How bizarre...
Illiterate morons work in the press today.
“Historically, the cosmetology industry, which includes barbers and hair stylists, have been classified as independent contractors...”
The reason we are developing the gig economy is the state, federal and local employment laws basically mean that if you employ someone, you really need a lawyer on staff to keep from getting big fines. A man I know had no work one week and didn’t therefore have any pay for his workers. He failed to file a form telling the state that there was no work that week and got fined several thousand dollars. (More money than if he’d paid everybody.) Then there’s the requirements for insurance, bonds, unemployment “insurance” (another tax) and social security, etc. If you make a mistake, even ten bucks, you will get fined. My friend was fined so much for nitpicking little things that he had to hire a service to handle the paperwork. The fines almost drove him into bankruptcy. But the service costs money too. He told me that many weeks he, himself, makes nothing.
Good grief...CA wants to boost is’s employment numbers? Are they looking for more payroll taxes?
Employers are going to scream because making your former employees independent contractors saves the employers tons of money! It means they don’t pay for workers compensation insurance, no need to offer benefits etc...They’re going to be PO’d.
Keep voting for the totalitarian party. Maybe free by haircuts for everyone is their next cause.
Real Estate agents would be classified as employees under this bizarre law as well...
real estate is the same way. Agents are independent and file 1099s but they have to hang their license with broker under company name. I became a broker not wanting employees or an office. We have three associate agent hope this doesn’t spread.
The way the ruling is worded it really can’t stand, at all, if they want to keep these businesses anything other than co-ops.
No joke, in nearly all fields in CA employers have changed tens of thousands of people who were once employees, into independent contractors. This is a very big deal and not a good one for employers.
In recent years, the relevant regulatory agencies of both the federal and state governments have declared that the misclassification of workers as independent contractors rather than employees is a very serious problem, depriving federal and state governments of billions of dollars in tax revenue and millions of workers of the labor law protections to which they are entitled.2
2 See United States Department of Labor, Wage & Hour Division, Misclassification of Employees as Independent Contractors <https://www.dol.gov/whd/workers/misclassification/> (as of Apr. 30, 2018); California Department of Industrial Relations, Worker Misclassification <http://www.dir.ca.gov/dlse/worker_misclassification.html> (as of Apr. 30, 2018);
Not likely. The reason why is in many cases the “Ckntractor” role is ideal for all parties. If you move somewhere and settle down, opening a salon may make sense. But if you wish to remain mobile or remain only a part time wage earner, then the contractor role is ideal. This law creates more problems than it could ever hope to solve.
Being contractors is not a wholly one sided transaction that favors a business employing the contractors. Contractors can have more input on days and hous they will be available for work. That can be very positive for contractors with other jobs or where the contract work is only part time and it is only part-time they seek.
For instance my barber is a contractor who gets a chair at a local barbershop for certain hours and days of the week. I make my appointments with him, or the shop owner, obtaining only days and times my barber will be available. My barber benefits and so does the shop owner. If my barber had to employee him as an employee, their business relationship, as well as mine with my barber, would likely end.
What is wrong with the Marxists and business regulations? Their economic views are myopic from a political perspective, seeing everything through a Marxist diaaletic lens with “business owners/capitalists” as “bad guys” and everyone else as just “exploited” by business owners and all “workers” not getting their “fair share” of the “value added” in products or services.
So under their rules my barber would get zero share of zero work.
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