[Discuss] Mass. outlawed independent contractors in software and other creative professions in 2004

[mbr at arlsoft.com (MBR)]

The cracking down on companies using contractors instead of employees is 
another case of state legislators discriminating against software 
developers and other professions that create intellectual property.

People who create intellectual property often want to be independent 
contractors.  Among other things, if you're forced to be a W-2 employee 
rather than an independent contractor, you lose any right to anything 
you create.  It's fairly common for a programmer to do similar projects 
for clients, and over time to factor out the commonalities in the code 
he creates for each one and assemble a collection of his code that he 
can customize for subsequent clients.

A 2004 change to Mass. law that software temp agencies have only 
recently discovered, makes it effectively impossible for programmers and 
people in other professions who create intellectual property to operate 
as independent contractors.  And that means they can no longer own what 
they create.

The 2004 law was passed because construction workers and other unionized 
workers were finding that employers were forcing them to set up phony 
independent contractor status so the employer could get out of providing 
benefits.  And since union leaders and politicians are often 
buddy-buddy, the Mass. legislature passed an overbroad law to help out 
their union cronies without giving a damn about the havoc they'd be 
causing to software engineers, even though software is one of the 
biggest parts of the state's economy.  It took several years before the 
law actually filtered down to clients, but now I'm hearing that nobody 
in the country will hire an independent software contractor from 
Massachusetts.  Same goes for writers, artists, etc.  See 
http://www.wbur.org/2010/06/30/independent-contractor-law.

    Mark Rosenthal
    mbr at arlsoft.com <mailto:mbr at arlsoft.com>


On 7/30/2013 4:50 PM, Edward Ned Harvey (blu) wrote:
>> From: discuss-bounces+blu=nedharvey.com at blu.org [mailto:discuss-
>> bounces+blu=nedharvey.com at blu.org] On Behalf Of Joseph Guarino
>>
>> What were they thinking?  As a political independent I'm not opposed to
>> taxation but I am opposed to them being unfairly levied against
>> industries we should be trying to encourage to stay in the state.
> It's a use tax.  Amazon and rackspace are not located in MA, but the consumers in MA have to pay the tax.  So I don't really think it fairly or unfairly pushes tech jobs out of the state.  Unless your job happens to be a big consumer of such products.
>
> They conceived it during the economic downswing.  At that time, I saw them cracking down hard, on things they had let slide for years.  To gain revenue.  I know at least 3 companies that got suddenly smacked with taxes and fines for using contractors instead of employees - Companies which were 100% above board.  But they have a good estimate how much it will cost you to defend your case, so they just fine you some amount below that level, knowing that most businesses will simply pay it off rather than fight it.  This happened with 2 out of the 3 companies I mentioned.  The 3rd one decided to contest the charges, and as predicted, got the fines dismissed at a cost higher than the fines themselves.
>