Personal Finance

Halley Bondy and daughter Robin, 2

Halley Bondy

Halley Bondy loves being a freelance writer.

And the 35-year-old journalist, who lives in Brooklyn, New York, earns more working for herself than she did as a full-time employee.

Now, a proposal in New York state that could require companies to classify more of their freelancers as employees is spreading panic among people like Bondy.

“All of my employers would probably just ditch me,” Bondy said. “I don’t think any one of them would take me on full-time.”

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Several states are moving to reshape their labor laws so that more independent contractors are turned into employees.

Proponents of the efforts say companies misclassify their workers as independent contractors to save money. Unlike contractors, employees have to be given a minimum wage and are eligible for overtime pay and unemployment insurance. Half of their Social Security and Medicare payroll taxes are also covered by the company.

Employers might be saving as much as 30% of employee-related taxes by hiring more people as contractors, according to the National Employment Law Project.

“There’s been this crisis of misclassification and employers are gaming the system,” said Cynthia Estlund, a professor at the New York University School of Law.

Yet the state efforts have sparked a backlash among freelance writers, artists, translators, cooks and other freelancers who say they’re happy with their work arrangement and fear their livelihoods could now be in peril.

“Caught in the middle are people who are and who want to be independent contractors,” Estlund said.

Many freelancers in California say they’re already paying a price, after Assembly Bill 5 went into effect on Jan. 1.

To classify a person as an independent contractor rather than an employee, companies in the state now have to prove the person is free from their control and is performing different work than what the company specializes in. Although, there are a number of carve-outs.

The reality of the matter on the ground is that most workers would end up benefitting if they’re doing the same work as a protected employee.

Erin Hatton

assistant professor of sociology at State University of New York, Buffalo

“It doesn’t fit with our business structures,” said Maressa Brown, a writer in Los Angeles. “We have many clients and that’s how we want to operate.

“That’s how we’ve created career security for ourselves given the volatile nature of media today.”

Vox Media announced already that it was replacing its freelancers “with contractors from other states.” More than 200 freelancers lost their work, and the company is expected to add 20 staff positions.

Kristen Lopez, another writer in Los Angeles, is worried she could lose up to $50,000 this year. Some of the companies for which she writes have already brought up the new law.

Kristen Lopez

Source: Kristen Lopez

“The emotional impact has been a lot of stress, worrying about how I’m going to pay bills and rent,” Lopez, 31, said. She has brittle bone disease and uses a wheelchair, which she said makes it difficult to find full-time employment.

“Writing gives me and countless other disabled freelancers the level playing field they don’t see in reality,” she said.

AB-5, as the law is known, faces several legal challenges, including from the California Trucking Association and Uber. “California went very quickly, and it was very sloppy and way too broad,” said Bradley Tusk, a former consultant for Uber.

It’s misguided, however, to blame the attempts to protect workers, said Erin Hatton, an assistant professor of sociology at the State University of New York, Buffalo.

“The reality of the matter on the ground is that most workers would end up benefitting if they’re doing the same work as a protected employee,” Hatton said. “It certainly seems like it will be a bumpy road, but the answer is not fewer protections.”

A bill aimed at ending the misclassification of workers in New Jersey is now on hold after backlash in the state.

Freelancers celebrated the news, although the legislation could still be taken up. And some 10 other states are likely to introduce similar legislation, according to Tusk.

Kelly Carpenter sings at assisted living facilities, weddings and restaurants in the Garden State. She earns around $20,000 a year from the performances.

Kelly Carpenter

Source: Kelly Carpenter

Not being tied to a desk all day helps her raise her 4-year-old son, Mason, she said. “The independent contractor route has been a godsend,” she said.

If she couldn’t continue working for herself, she figures she’ll need to get a full-time job at a restaurant.

“I’d be forced to do something I don’t like,” she said. “I define myself as a singer.”

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