New Jersey pro photographers, possible impact

Bill S404, to be possibility signed in the next few weeks would upend the current system of independent contractors. From what I’ve read in the recent news, basically you won’t be able to offer your services unless you are hired as an official employee of a business. The example used is say you are a kindergarden teacher and on the side you do wedding photography and do a half-dozen shoots a year. You get the occasional work through some firm (Company XYZ) that hires multiple independent photographers. Company XYZ takes a cut but also give the individual, acting as an independent a cut. Under the new proposed bill, you will have to be officially hired by Company XYZ and cease operating as an independent contractor.

See the article at https://www.trentonian​.com …ea-a16d-e311dc18d1ae.html

One has to wonder if some of these politicians realize who they are really working for!

John from PA wrote in post #18968498
One has to wonder if some of these politicians realize who they are really working for!

Something similar has been in the news in California. Dealing with a local issue some years ago led me to see that when legislators discussed a measure that affected freelancers, they knew little about how this part of the economy works. In the absence of information, they deployed stereotypes from their ideas about business generally. In this case, the legislators were the City Council, but another issue gives me reason to believe that our state legislators think the same way.

They may realize who they're working for. They're not being selfish. They're just substituting assumptions for facts.

If you have never been part of the bill process, you might think that the legislators come up with these types of laws on their own. They don't and they almost never know anything about the bill other than what their staff tells them. More likely it went something like this.

• Some big business (might not be photographic) is seeing an erosion of their customer base to independent contractors causing a fall in revenue.
  
• They work with their legal department and formulate a strategy to eliminate the threat.
  
• They allocate budget and work the staff of sympathetic legislators. Deals are made.
  
• Staff goes to their elected legislator and informs them of the opportunity. The bill was most likely written by the large firms lawyers.
  
• The legislator weighs the positives and negatives like, is pi$$ing of a few independent contractors worth missing out on all that the large firm can provide.
  
• Legislator proposes the bill to his/her buddies and spreads the wealth a bit.
  
• Bill gets passed.

I have been a part of a legal team a couple times as a technical contributor for legislation that affects the telco industry. To see the process in action as a participant makes you realize that it's all business.

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State governments and the federal government collect a lot more in various tax revenues when people work as employees rather than as contractors.

A big factor in all of this recently was the Fed Ex situation. . All of the Fed Ex drivers who owned their own routes had been hired as contractors. . This gave Fed Ex and their drivers a huge financial advantage over UPS, who hired all of their drivers as employees. . As a result, there was a lot of pressure on the government to not allow Fed Ex to hire route owners / drivers as contractors anymore, and to hire them as regular employees instead. . I'm not sure what the result was, or if this is still in litigation.

In any event, the government gets a lot more money out of everybody if people work as employees instead of working as independent contractors. . And it's easier for the government to track everybody's true income and employment status that way, as well.

Personally, it works better for me to work as a freelancer / contractor, because I can write off practically everything as a business expense, and as a result I have barely paid any income taxes at all since 2006. . I mean, you can literally earn 20 or 30 thousand dollars and come up with 20 or 30 thousand dollars of things to claim as allowable expenses, and thus show practically no taxable income at all.

Many of my friends and family members own their own businesses or work as independent contractors, make good livings for themselves, and pay very little in income taxes compared to people who work for businesses as employees. . I think this is exactly why some state governments want to stop the independent contractor gigs.

The only time I get screwed with income taxes is when I work as an employee, because then I can barely write anything off at all.

I want to point out to the mods that this is not a political discussion. . Rather, it is an economic discussion. . We are allowed to discuss economics here on POTN.

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Tom Reichner wrote in post #18968538
State governments and the federal government collect a lot more in various tax revenues when people work as employees rather than as contractors.

Well, the city government collects more when it labels every kind of contracting, however small, as a business.

Some bills purport to protect contractors from exploitation, and I'm not so cynical as to consider that rationale a mere front for lining an industry's or government's pockets. However, bill writers don't anticipate the effects on workers whose situations they don't understand.

California's AB 5

When companies in NJ have to start hiring people to write their software, instead of using contractors, it will get interesting.

moose10101 wrote in post #18968743
When companies in NJ have to start hiring people to write their software, instead of using contractors, it will get interesting.

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Yup!

And when New Jersey wants to have a bridge built, if they obey their own law, they will not be able to hire a contractor to build their highway bridge. . They will have to do all of that in-house, with full-time salaried state employees.

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After doing some more reading, including the key parts of the bill, i.e. the individual will be deemed an employee unless:

a. The individual has been and will continue to be free from control or direction over the performance of the service, both under the individual’s contract of service and in fact; AND

b. The individual’s service is outside the usual course of the business for which that service is performed; AND

c. The individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the work performed.


I would say that people building a bridge would not fall under the category of "employee", because New Jersey doesn't build or directly supervise the building of bridges, as far as I know. Also, truly "independent" contractors, i.e. those who don't get work through some "pass-through" firm, would not be considered employees. So if you're a wedding photographer who tracks down your own gigs, you shouldn't be affected.

Software contractors who are developing based on a written specification, without direct supervision of activities, would also seem to be excluded. But there are a huge number of contractors who are doing software development/support under direct supervision by the client, or through a consulting company via a "staff augmentation" contract, and they would all have to be considered employees of the entity paying for the work, with the requisite payroll taxes, etc. The number of "Help Desk" contractors alone would be staggering.