Jack TenneyExtra Point

by Jack Tenney, Publisher

October 2015

September without the Red Sox in the hunt for a playoff sends me off on tangents.

Consider that Republican presidential candidate Jeb! waxed warmly about a ride he took with Uber. But Hillary promised to whack big businesses that misclassify workers thus depriving them of employee benefits. Fair enough. Republicans see Uber drivers as independent entrepreneurs while Democrats feel the pain of the unionized cabbies losing fares.

Care to guess what Vermont Auditor Doug Hoffer thinks?

Well, I didn’t, either, but in an effort to forget Red Sox problems, I actually read the auditor’s letter. It began:

Vermont workers who are misclassified as independent contractors do not receive protections and benefits to which they are entitled. Furthermore, these workers must pay the Social Security and Medicare tax that is normally paid by employers. Employers that misclassify have an unfair business advantage against those employers that abide by the law, because the employers that misclassify do not pay for workers’ compensation insurance, unemployment taxes, or the employers’ share of the Social Security and Medicare taxes.

When it comes to unemployment taxes, shouldn’t the collection of taxes be based on the assumption that a covered person has the protection of receiving benefits if the need arises? I cannot imagine any freelancer or independent contractor successfully collecting compensation from the state fund upon completion of a contract. Most if not all freelancers have more than one client or, like happy frogs, make a living jumping from one lily pad to another.

Anyway, Hoffer’s August 31 letter got some Labor Day coverage in Seven Days and VTDigger.

For a bigger take on the issue, check out Sara Horowitz’s recent op-ed piece in The New York Times. She is the founder and executive director of the Freelancers Union. She cites some awesome stats about the growing number of people (especially millennials) who do gigs. OMG! They got a union!

The Extra Point: I don’t think the states pay unemployment taxes to cover their own employees.