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
m...@arlsoft.com <mailto:m...@arlsoft.com>
On 7/30/2013 4:50 PM, Edward Ned Harvey (blu) wrote:
From: discuss-bounces+blu=nedharvey....@blu.org [mailto:discuss-
bounces+blu=nedharvey....@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.
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