June 21, 2010: UIYB: Freelance workers

>> Emily: THE INDEPENDENT

CONTRACTOR LAW ON THE BOOKS SIX

YEARS WILL SERVE.

IT'S SUPPOSED TO PROTECT WORKERS

FROM BEING DENIED BENEFITS LIKE

HEALTH INSURANCE AND WORKER'S

COMP.

SHE GOT AN OFFER SHE COULDN'T

REFUSE.

PROMISE OF STEADY WORK FROM

NATIONAL PUBLISHING COMPANY

OFFERING NO BENEFITS.

SIX MONTHS LATER SHE'S OUT OF

WORK.

>> MY EDITORIAL PEOPLE TOLD ME

THAT BUSINESS DEPARTMENT HAD

TOLD THEM, DO NOT HIRE ANYONE

FROM MASSACHUSETTS, SO A JOB

THAT WAS SUPPOSED TO TAKE ALL

YEAR WAS ENDED IN JUNE.

>> THE PUBLISHING COMPANY IT'S

WORRIED ABOUT BREAKING THE

STATE'S INDEPENDENT CONTRACTOR

LAW.

WHICH SAYS, A COMPANY CAN'T HIRE

A FREELANCER TO DO THE WORK OF A

FULL-TIME EMPLOYEE.

IF THEY DO, THEY FACE A FINE UP

TO $25,000.

>> OTHER PEOPLE LOOKING AT ME

ARE JUST GOING TO SAY NOT FOR

MASSACHUSETTS, NOT A SINGLE

FREELANCER FROM MASSACHUSETTS.

>> PROTECT WORKERS FROM

EMPLOYEES THAT SKIRT THE COST.

THIS IS FLYING UNDER THE RADAR

SINCE PASSING IN 2004 NOW THE

STATE IS CRACKING DOWN.

HOLE BERT SAYS IT'S PUTTING HER

OUT OF BUSINESS.

>> I REPLACE 30, 40,000 DOLLARS

OF INCOME FROM A NATIONAL

PUBLISHER FOR A $ROOM JOB.

>> THE LAW HURTS FREELANCERS, IS

SEEN AS GOOD NEWS FOR THE

CONSTRUCTION INDUSTRY.

WHICH FOR YEARS HAS HIRED

WORKERS TO DO DANGEROUS JOBS

WITHOUT PROVIDING A SAFETY NET.

>> THEY GET INJURED ON THE JOB,

GO TO FILE A WORKER'S

COMPENSATION CLAIM, SAY YOU'RE

NOT AN EMPLOYEE, YOU'RE NOT

ELIGIBLE.

>> FRANK CALLAHAN SAYS,

CONSTRUCTION COMPANIES CAN CUT

THEIR PAYROLL COSTS IN HALF BY

DENYING WORKER'S BENEFITS.

WHILE HE'S HEARD ARGUMENTS

AGAINST THE LAW BEFORE, IS NOT

CONVINCED THERE'S A REAL

PROBLEM.

>> THAT WOULD BE THE ARGUMENT AT

THE TIME THAT THIS WE PUT THIS

WORKMAN OUT OF WORK, THESE

PEOPLE OUT OF WORK, SIMPLY

HASN'T HAPPENED.

>> SOME OF MY OLD CLIENTS AREN'T

HIRING ANY MORE.

>> FRANK CALLAHAN MEETS SUSAN

HOLE BERT.

WITH ME NOW IS UP IN YOUR

BUSINESS CONTRIBUTOR, CHRIS.

I HAVE TO SAY, THIS TOOK ME A

LITTLE WHILE TO GET MY HEAD

AROUND.

I'M THINKING WHAT'S THE PROBLEM.

YOU'RE FREELANCER, HOW DO YOU

GET TO WRITE FOR THE "BOSTON

GLOBE" FOR US, YOU JUST HAVE TO

BE ON THEIR W-2 PAYROLL.

>> IF YOU'RE A FREELANCER

BASICALLY, YOU ARE REQUIRED TO

FILL OUT A W9 FORM, YOU GIVE

THEM YOUR SOCIAL SECURITY

NUMBER.

THEN THEY AT THE END OF THE YEAR

IF THEY PAID YOU MORE THAN $60

THEY'RE REQUIRED TO REPORT TO

THE GOVERNMENT VIA 1099 HOW MUCH

THEY PAID YOU.

THAT TELLS THE COMPANY HOW MUCH

MONEY YOU MADE SO THAT I AS

FREELANCER AT THE END OF THE

YEAR AM RESPONSIBLE FOR PAYING

TAXES ON THE TOTAL AMOUNT.

NOW, I AM A VERY HAPPY, WILLING

INDEPENDENT CONTRACTOR,

FREELANCER.

AND MOST OF THE CREATIVE PEOPLE

IN THE MASSACHUSETTS ECONOMY WHO

ARE FREELANCERS ARE VERY HAPPY

TO BE FREELANCERS.

WE CAN SELECT OUR OWN CLIENTS,

WE OWN THE INTELLECTUAL PROPERTY

THAT WE CREATE BECAUSE WE ARE

NOT DOING THEM AS EMPLOYEES,

WHICH IS A HUGE ISSUE FOR THE

CREATIVE COMMUNITY IN

MASSACHUSETTS.

HOWEVER, WHAT MR. CALLAHAN WAS

ADDRESSING WAS THE FACT THAT

MANY CONSTRUCTION COMPANIES AND

OTHER COMPANIES, FED EX HAS BEEN

ACCUSED WILL HIRE PEOPLE TO DO

JOBS AND INSIST THAT THEY

ONLY -- THEY BEHAVE LIKE

FREELANCERS.

THAT MEANS THIS THEY DON'T PAY

THEM INSURANCE OR DON'T PAY

WORKER'S COMP INSURANCE, OR

UNEMPLOYMENT IF THEY GET LAID

OFF.

>> Emily: I HAVE TO GO BACK

HERE.

ONE OF THE PARTS.

LAW SAYS, YOU CAN'T HIRE

SOMEBODY WHO IS A FREELANCE FER

PEOPLE ON STAFF COULD DO THAT

JOB.

OVER AT THE "BOSTON GLOBE" THERE

ARE PEOPLE WHO CAN DO THAT JOB.

>> NOT ENTIRELY.

THE ACTUAL LANGUAGE OF THE LAW

IS THIS.

IN ORDER TO BE DECLARED --

THERE'S A THREE-PRONG TEST TO

DETERMINE IF YOU ARE AN EMPLOYEE

OR IF YOU CAN RIGHTLY BE

CATEGORIZED AS INDEPENDENT

CONTRACTOR.

ONE IS THAT THE PEOPLE WHO ARE

WORKING WITH YOU CAN'T HAVE ANY

CONTROL OVER HOW YOU PERFORM

YOUR JOB, WHERE YOU PERFORM IT,

HOW MANY HOURS PER DAY YOU

SPEND.

>> Emily: DON'T THEY EDIT

YOUR COPY?

>> THERE IS A PROVISION IN THE

LAW THAT SAYS, THAT OF COURSE

REALIZE THERE HAS TO BE SOME --

>> Emily: BASICALLY CAN'T

TELL YOU HOW TO DO THE JOB.

>> THE SECOND PRONG IS

PROBLEMATIC ONE.

THIS LAW HAS BEEN ON THE BOOKS

SINCE 1990.

IT WAS IN 2004 THAT THEY CHANGED

ONE LITTLE PHRASE IN THE

LANGUAGE OF THE SECOND PRONG

TEST WHICH BASICALLY SAID, YOU

CANNOT -- IF THE PERSON IS

PROVIDING A SERVICE THAT IS

WITHIN THE SCOPE OF THE BUSINESS

THEN THEY HAVE TO BE DECLARED AN

EMPLOYEE.

THAT WAS NEW LANGUAGE.

PREVIOUSLY THE LANGUAGE WASF

THEY ARE PERFORMING A SERVICE

THAT IS DONE OFF THE EMPLOYEE --

EMPLOYER'S PREMISE YOU'RE FINE,

NOT AN EMPLOYEE.

BUT ON SUCH LIKE CONTRACTORS

FREQUENTLY DON'T WORK AT THE

HEADQUARTERS WHERE THE

CONTRACTING COMPANY IS, THE

CONTRACTORS WERE ABUSING THE

HECK OUT OF INDEPENDENT

CONTRACTOR STATUS.

THE THIRD PRONG IS, THAT YOU

HAVE TO BE A DECLARED

INDEPENDENT PERSON WHO --

INDEPENDENT BUSINESS WHO HAS

MULTIPLE CLIENTS.

I AS FREELANCER, I EASILY CAN

SATISFY THE FIRST.

THE SECOND, IT'S THE -- FIRST

AND THIRD IT'S THE MIDDLE ONE

THAT IS CAUSING ALL THE PROBLEM.

THE AG HASN'T GONE AFTER ANY

COMPANIES THAT BASICALLY HAVE

HISTORICAL TRACK RECORD OF USING

FREELANCERS.

FOR INSTANCE, THE GLOBE USES

FREELANCERS, MOST MAGAZINES USE

FREELANCERS.

I DON'T THINK THE A.G. IS

TARGETING COMPANIES, A LONG

TRACK RECORD OF HAPPILY AND

SUCCESSFULLY.

THE FACT IS, THOUGH, BASED ON

THIS LAW THERE ARE BREAKING THE

LAW RIGHT NOW.

>> Emily: THE PUBLISHING

COMPANIES HIRED HOLBERT THERE,

THEY COULD HAVE PUT HER ON W-2

WOULD THEY HAVE HAD TO PAY HER

ALL THE BENEFITS?

>> YEAH.

THEY WOULD HAVE HAD TO PAY

WHATEVER MANDATORY BENEFITS

OTHER EMPLOYEES GOT.

PAY PAYROLL TAX, PAID

UNEMPLOYMENT INSURANCE.

WHAT A LOT OF COMPANIES ARE

DOING IS CONTRACTING WITH THIRD

PARTY W-2 FIRMS LIKE PSG WHICH

IS PROFESSIONAL -- I CAN'T

RECALL WHAT IT STANDS FOR OFF

THE TOP OF MY HEAD.

BASICALLY I SPOKE WITH SOMEONE

THERE, THEY TOLD ME THAT IN THE

LAST SIX MONTHS THEY HAVE SEEN

AN ABSOLUTE SPIKE IN COMPANIES

THAT ARE COMING TO THEM SAYING,

PLEASE PUT OUR CONTRACTORS ON AS

W-2 EMPLOYEES OF YOU THEN THEY

PAY PSG A FEE TO DO THAT.

>> Emily: WHY?

>> BECAUSE THEY'RE AFRAID OF

GETTING CAUGHT OUT BY THIS LAW.

THEY'RE GOING COMPLETELY

OVERBOARD AND MAKING ALL THEIR

CONTRACTORS GO ON W-2 STATUS

WITH PSG OR SOME SIMILAR

STAFFING --

>> Emily: ANOTHER LAYER?

>> IT'S MORE EXPENSE AND MONEY

THAT QUITE FRANKLY IF I'M WITH

PSG MY EMPLOYER -- MY CLIENT IS

PAYING THEM THE FEE TO HAVE ME

AS W-2.

GIVE ME THE MONEY INSTEAD.

>> Emily: SOUNDS LIKE THERE

SHOULD HAVE BEEN DANGEROUS

CLAUSE IN HERE.

YOU SHOULDN'T BE IN THE SAME

CATEGORY AS --

>> THAT'S THE PROBLEM.

THE REAL PROBLEM HERE THAT THE

LANGUAGE WAS ALTERED IN THE

CONSTRUCTION REFORM ACT.

NO ONE FROM THE CREATIVE

COMMUNITY WAS EVEN APPROACHED

ABOUT ASSESSING IMPACT THATth

WOULD HAVE ON OTHER TYPES OF

INDEPENDENT CONTRACTORS.

NO ONE WHO DREW UP THIS LAW

THOUGHT IT APPEARS FOR A SINGLE

MOMENT ABOUT THE IMPACT ON THE

CREATIVE WORKFORCE IN

MASSACHUSETTS WHICH IS VERY

LARGE, VERY VITAL WORKFORCE.

THERE IS A SCRAMBLE GOING ON

RIGHT NOW TO TRY TO WRITE SOME

AMENDMENTS TO THIS LAW BUT THE

UNIONS AND MR. CALLAHAN ARE

LIGHTING -- FIGHTING IT BECAUSE

THEY DON'T WANT ANY CHANGES TO

THIS LAW RIGHT NOW BECAUSE THIS

LAW IS VERY GOOD FOR THEIR UNION

WORKERS.

IT IS VERY, VERY BAD FOR THE

CREATIVE COMMUNITY.

AND THEY DON'T REALLY CARE THAT

IT'S VERY, VERY BAD FOR THE

CREATIVE COMMUNITY.

YOU HEARD HIM SAY, HE DOESN'T

KNOW OF ANYBODY WHO IS -- I

PERSONALLY CAN GIVE HIM A LIST

OF PEOPLE.

NOT JUST ME, BUT OTHER PEOPLE.

IT'S CPAs, CERTIFIED PUBLIC

ACCOUNTNESS WHO DID CONTRACT

WORKS WHO DO WORK FOR LARGE

GROUPS.

PHOTOGRAPHERS, GRAPHIC

DESIGNERS, CREATION OF

INTELLECTUAL PROPERTY IS GOING

TO BE AFFECTED BY THIS IF THEY

WANT TO REMAIN AN INDEPENDENT

BUSINESS.

GOOD NEWS IS THE A.G. IS NOT

ACTIVELY PROSECUTING COMPANIES,

THE FACT REMAINS THAT THEY ARE

TREADING ILLEGAL LINE UNTIL THIS

LAW GETS REWRITTEN SO THAT IT'S

NOT SO DAMAGING --

>> Emily: ANYBODY PROPOSED

REWRITING?

>> YES.

CURRENTLY AN AMENDMENT THAT JUST

GOT REFERRED OUT OF THE

COMMITTEE BUT STILL LATE IN THE

SECTION PROBABLY NOT GET VOTED

ON.

WHAT THAT WOULD DO IS CREATE AN

EXEMPTION FOR PEOPLE THAT

CONDUCTED BUSINESS PRIMARILY OUT

OF THEIR OWN HOME.

YOU ALSO WOULD HAVE TO REGISTER

TO BE A FREELANCER IN THE STATE

OF MASSACHUSETTS CREATES ANOTHER

LAYER OF BUREAUCRACY.

ALSO DOESN'T GO FAR ENOUGH FOR

MANY PEOPLE IN THE CREATIVE

INDUSTRY.

>> Emily: THANK YOU.

THAT'S IT FOR "GREATER BOSTON."

TOMORROW ON MY RADIO SHOW

WATCH -- DESIGNING A PLAN THAT

USES 70% LESS FUEL THAT'S AT

NOON FOLLOWED.

NEW PROCEED BUCKS OF "IN TO THE

WOODS" THAT TOMORROW AT 7:00.

I'M EMILY ROONEY.