Is anyone confused by all the fuss over freelancer benefits in the Viacom mess? Freelancer, permalancer, part-time employee, full-time employee: What's the difference anymore? Why are Viacom's independent contractors complaining about having their benefits cut when the general impression is that freelancers don't qualify for benefits in the first place? Where does the actual, you know, law come down on this issue? And do most media companies abide by it? Let's learn more!
The basics of freelancing: Contractors complete a piece of work in exchange for a fee, not a salary. They can't be bound by specific hours or be required to attend meetings or work at the office. Employers aren't actually required to provide health or retirement benefits to anyone. If they're big enough, most companies provide those benefits at some level in order to get and keep happy employees. But if they provide benefits to some employees, they have to provide them for all. And that's where it gets sticky, because many freelancers, whether they know it or not, fit the (maddeningly loose) definition of employee.
There is no legal definition for an independent contractor, but courts uphold the common law definitions of "master" and "slave." That's less fun than it sounds. Whether someone is an employee or a contractor is based on the amount of control their boss has over them. The implied relationship determines if you're a contractor or an employee, entitled to the benefits every other employee gets. Vague enough? Sound like you're in a relationship with a high-strung high-schooler?
You're Basically An Employee If:
- Your employer gives you company equipment to complete your work.
- You have to get prior permission to take a day off.
- You spend all your time working for one company—likely you don't have the time to work for anyone else.
- You submit oral or written reports to our boss.
- Your employer trained you for your position.
- Your employer bought, trained and supervises your lovely assistant.
- You have your own work station on company premises.
- The business couldn't maintain its success or performance without your services. (In reality, not just in your mind!)
- You're reimbursed for expenses.
- You've been instructed where, when, or how to complete the job you've agreed to. (Having a picky boss doesn't qualify.)
None of these are legal definitions and many companies blur the lines. Newspapers and magazines, who often fill their pages with freelance work, occasionally set up "freelance stations," where a contractor can work, sometimes daily, without being given their own station and thus qualifying for employee status.
Not every employer is out to exploit cheap labor. In the media industry in particular, a company is hard-pressed not to use freelance workers. Many of the most ambitious contractors are young and happy to do the work for a byline or are established enough to want independence—both are attractive. Giving those people steady work or a few perks seems only natural. Unfortunately for employers, it also qualifies them for more.
In September, Governor Spitzer issued an executive order [PDF] establishing the Joint Enforcement Task Force On Employee Misclassification. Spitzer's order rattled the cages of a few media companies—the governor wants to look under rocks most of them would prefer remain undisturbed.
Viacom may have faced a choice common to media companies: eliminate benefits to independent contractors, or hire them on as employees. Take away paid vacation, company-provided healthcare and a retirement plan, and it becomes a lot easier to make the case that a freelancer is just a freelancer. Many newspapers spent the summer cleaning house in anticipation—those who haven't may find themselves in a bind.