California passes landmark bill that threatens to upend companies like Uber and Lyft

CNBC ^ | September 11, 2019 | Annie Palmer

[Usually_Disappointed]

I would imagine pretty easy.

I work in a city that passed the $15 minimum wage law. We responded by laying off local employees and hiring employees from out of state that can remote into our office and do the same job. The remote workers get paid the minimum wage of the state they live in.

Unintended consequences indeed...

[discostu]

Grocery delivery as an available service goes back ages. It kind of disappeared in America in the 70s and 80s when we lost the concept of service. But there is definitely nothing new or bad about it.

[Magnum44]

Its more than just the hours. If you are an employee in CA, your employer is required to pay unemployment compensation amongst other things. This will hurt the Uber business model and creates more paperwork instead of efficiency.

Seriously, why does CA have a say in a private contractors employment arrangements?

[KamperKen]

"What’s to stop drivers from setting up some type of underground concierge service? That’s exactly what’s going to happen if this bill passes.

Ride sharing will come back in a big way on Craigslist and social media.

[Dilbert San Diego]

Good question. I think that the Democrats in Sacramento, as they dominate the legislature, feel that everyone should be an employee and NOT an independent contractor.

And since they dominate the legislature, they can ram through legislation such as this, with no opposition.

[Lazamataz]

The California Motto:

“If it’s a good idea, we will ban it.”

[Lizavetta]

Not a chance, especially since their revenue plummeted when their biggest client, the State of California, pulled most of their contracts and gave them to OUT OF STATE transcription companies. So much for giving a rip about its citizens.

If this bill becomes law, the California firms will NOT hire their contractors as employees. They will hire non-California transcribers.

[Svartalfiar]

The downside financially, was having to pay the higher self employed social security tax rate.

This is really not the case. You're paying even as an employee. The "bucket of money" that your position has allocated to it includes the "employer" contribution to SS/MCARE. If they didn't pay that, it could (and should) end up in your paycheck. The downside financially, was having to pay the higher self employed social security tax rate.

Eh, this is really not the case. The difference in pay is much more that just the employer-side SS taxes. In my business (AV), you will generally find full/part-time employees making anywhere from $10 an hour to maybe $40 an hour at the very top-end. Average is probably just under $20/hr. 15-18ish I would assume.

However, as a freelancer, you'll usually have a day rate of $200 as a very bottom, up to maybe $6-700. Average is probably $300/day, which works out to $30/hr (day rate assumes 10hr workday), which is about $25/hr after 15% SE taxes. So,. overall, you would definitely make more $$ working freelance as a 1099 employee with several companies, than being an actual employee. You just aren't eligible for any benefits, like health insurance, retirement accounts, PTO, etc. For some people, it's worth it.

But to respond to Disamb's comment on "'bucket of money' that your position has allocated to it" - Sure, your employer is paying those amounts and they are considered part of the cost of doing business/hiring employees. But, assuming that was eliminated, how many people do you think would actually get that amount in a raise? Probably not many? That amount isn't assigned to you, as you can see in people who refuse employer-provided healthcare. Your employer , depending on plan, covers a decent amount of your HC premiums. If you elect to not be under your HC plan (Your wife has a better one, you're in NG, etc etc), does your employer give you a several-thousand $$ raise instead? No - generally it means you still get paid the same as everyone else, you just aren't under the same health insurance. Your employer saves the $$ they had 'allocated' to your HC premiums.



I mean, I have plenty of ideas on how all of this should be taken out of the FedGov hands anyway, but that's a whole 'nother conversation. For now, within the current tax system, I say get rid of EVERYTHING employer-side. Make everyone pay the 15%+ SE taxes. At a very minimum, at least put it on the employee pay stub. Show that your boss is paying a crapton of $$ to the government that you don't even see. Most people don't even know that they pay these taxes, since they officially hit even before your gross line on the pay stub. Complete bullshit.