Kick me I’m a contractor
NOTE: THIS IS AN UPDATED VERSION OF AN ARTICLE I ORIGINALLY WROTE FOR THE ADJUNCT ADVOCATE WELL OVER A DECADE AGO. DESPITE THE PASSAGE OF TIME MOST OF IT STILL SEEMS RELEVANT TODAY. I HAVE HOWEVER, UPDATED THE INFORMATION ABOUT CONTINGENT WORKERS AND IRS RULINGS AND ADDED SOME LINKS.
In the midst of preparations for the annual Halloween party at Microsoft headquarters a some time back, a haunting specter appeared. Attached to while paper skeleton hanging from the wall was this message: "Kick me, I’m a contractor."
The number of temporary workers and independent contractors in the US has grown steadily since the mid 80's. USA Today noted that in 2012 about 12 % of all workers or about 17 million workers were considered temporary. This figure includes a broader category of "contingent workers," which, in addition to temporary workers, encompasses independent contractors, freelancers, contract workers and consultants. What counts as a contingent worker is not always clear. The latest report from the US GAO gives both a core estimate of contingent labor and a broader definition. In the broader definition contingent workers include in addition to the above categories, “all individuals who maintain work arrangements without traditional employers or regular full-time schedules -- regardless of how long their jobs last.” By using these estimates the total number of contingent workers is close to 40% of the workforce in 2010. Part time and contingent work grew significantly after the recession of 2008 -- a 50% rise since 2008. It was the only sector to show much growth. While contingent hiring is common in recessions there is little indication that as the economy recovers that traditional hiring is making a comeback. To the contrary, it is indicative of a new set of economic realities in which most work is becoming contingent. For example, the use of temps has extended into areas not traditionally seen into professions like law medicine and information services-- and most obviously the extensive use of adjuncts in education.
In neoliberal mythology, the freeing of the individual from traditional jobs is a good thing. It creates a more adaptable individual able to shift, like fast capitalism, to the shifting waves of supply and demand. She is able to shift jobs and commitments with ease and little need for or sense of permanence and attachment. While a few may benefit from this Brave New World of free floating labor the vast majority are worse off. For those with little control over their fate life is more risky, employment more precarious, and conditions more vulnerable to disruption.
The relation between employers and employees is changing,. There is less loyalty or commitment between firms and workers. Of course this new new social contract is one of the reasons why CEOs and other executives see themselves as entitled to large compensation increases while workers see their income shrink. We no longer work in the world of Henry Ford and his ilk who (whatever their limitations) sought to pay workers well. It is a world in which the vast majority of workers are disposable . WIthout any sense of the importance of labor, or the worth of life, the new capitalists seek to shed any social obligations to workers or to society.
Among the most disturbing aspects of this trend is the growing use of independent contractors by employers to avoid paying benefits to permanent employees. For example the use of contract workers in construction has meant that employers no longer have to pay workman’s compensation. As companies use contingent status to pay workers non union wages, and skirt their responsibilities to workers under the law, it becomes harder for workers to hold employers accountable for poor and unsafe working conditions, workplace abuse and accidents. The worker is more and more responsible for his own fate regardless of conditions. This individualizing element of neo-liberalism has another consequence. Non-unionised contingent workers are often isolated from their fellow workers, are more vulnerable to employer pressures and less able to draw on the collective power of union to bargain for fair wages and safe conditions. Relying on the government to enforce these is also problematic. Deregulation underfunding and capture of regulatory institutions have made enforcement spotty at best.
In its simplest terms an independent contractor is a person or business who contracts to perform a service for another person or business, and who in addition retains control over the ways and means performing that service. In theory the distinction is fairly clear, though in practice it turns out to be fuzzier. (The IRS uses a list of up to 20 criteria to classify independent contractors you can view it here) An employee sells not just services but labor to an employer: the employee cedes control not just over what to do, but how to do it. An independent contractor can not be told how to do a job but only contracts to perform it. The contractor could subcontract a job to another person, or hire his or her own employees. Contractors generally work for a number of clients. They perform specific tasks for a limited length of time. Examples of IC’s include doctors , lawyers freelance writers, and consultants. It also includes, however, groups like construction workers. They provide their own equipment, work for a variety of contractors on limited term. jobs and they are assumed to have a certain control over how the work is performed.
The "free agent" status of independent contractors means they are responsible for their own pensions, benefits, health insurance social security taxes and tax withholding. In addition, however, independent contractors, as noted above, aren’t covered by workman’s compensation for injuries received on the job, nor since they are not employees, are they covered by laws governing unfair labor practices.
It is this freedom from the bounds of labor that has lead some to contend following the neo-liberal ideology noted above, that independent contracting can change the economic and psychological conditions of the workplace. Contingent workers are sometimes thought to be free, as Ellen Dannin, Professor of Law at California Western School of Law notes, from "the suffocation of a lifelong, full time job that stifles creativity, individualism and self-interest." The use of IC’s and contingent workers however, also lifts the burden and obligations of employers built up over the last 75 years. By changing the terms of the implied social contract, companies are free to roam the globe to exploit cheaper labor. This freedom however, means increased dependency. Given the power relationships of the modern economy most contingent workers are at the mercy of new economy. Most contingent workers, according to Professor Dannin, make less that regular employees. The new class of contingent workers looks a lot like a more vulnerable and impoverished version of the reserve army. While unlike the earlier reserve army of the unemployed, this underemployed and underpaid reserve army still works to undo the gains of employees in the welfare state.
High Tech companies such as Microsoft, have shown the implications of these new arrangements. They classified workers as temporary or IC’s who do the same work as salaried employees. The use of IC status to avoid paying benefits has become so extensive that Dollars and Sense magazine ranked it among its top dubious labor practices. Microsoft "permatemps" worked in jobs that, while they appeared to be limited in time and scope, such as development of a particular piece of software, really took on the characteristics of salaried employment. Permatemps worked side by side with regular employees on similar tasks, under similar working conditions for periods of several years. They did not however, receive employee discounts, benefits, and pension plans that were given to employees (including the Halloween party) Microsoft claimed that it needed to hire independent contractors in order to maintain flexibility and compete in areas of such as product development, however, permatemps saw the issue from another angle. They thought Microsoft was exploiting the rules on independent contracting to enhance its bottom line. IC’s successfully sued Microsoft to win benefits given to salaried employees. Unfortunately the dual status of tech workers still exists today. Despite criticism and government sanctions, there are still two types of high tech employees: well paid employees who receive the generous benefits of high tech success and contract and temporary workers who don’t share in this bounty although they have made some headway over time. Worse yet cash rich high tech startups like Uber and the San Francisco startup Homejoy use low paid contract labor as a primary business model. Homejoy hired homeless people to clean houses on contract for $19 (not per hour).
Adjuncts do not fit as easily as other contingent workers into the category of independent contractors. They work at the university with regular faculty, and are supervised by a department head or other authority who regulates their work. Teaching courses often requires conforming to department defined standards about course content and structure. The have only a limited amount of freedom. There have however, been instances in which adjuncts have been classified as independent contractors,. When challenged these have generally lost. For example, the IRS ruled in case involving Texas A&M that adjuncts are employees. However, this has not necessarily stopped the problem.
A cursory query on an internet labor list many year ago revealed one faculty member working in a Union Leadership Program at the University of Massachusetts working as an independent contractor. Others indicated the practice still occurs. A growing number of faculty work, in addition, as independent contractors in providing courses to companies in for -profit sectors of higher education.
When I was employed by the DIAL Program, an online continuing education program at the New School University, adjuncts were hired as independent contractors. I considered it the worst of all possible worlds. On the one hand they received abysmally low compensation, less than $1000 per course and had no standing as members of the academic community. As in other cases of independent contracting, we received no benefits and the New School didn’t pay any withholding tax. Our contract explicitly noted that we were not allowed to identify ourselves with the New School a clear indication that as independent contractors we were not really members of the New School faculty. While DIAL courses were taught off site (in cyberspace as it were) we were expected to meet the same academic standards as those who taught on campus courses. Our courses and plans were approved and our teaching was supervised just as any other faculty members. We were also required to undergo a training and orientation process – another indicator of employee status. So much for the progressive spirit of New School founder, John Dewey. In fact the administration of the DIAL program often rationalized our poor compensation and protests about conditions with Orwellian doublespeak about our status as pioneers.
The implications of independent contractor status for adjuncts goes beyond the low pay and inadequate working conditions. They affect our status as members of the academic community. In fact, it is hard to see the value of free agency in the academic world. The promise of neo-liberal freedom would mean exclusion from any rights to participate in governance, in planning of the curriculum or any other university policy. Of course it’s true that by and large adjuncts have little say in these matters, but they are at least as members of an institution and can raise claims for better status and representation. An independent contractor has no such right.
Adjuncts should avoid complacency on this issue. In the past bills have been proposed in Congress, which will simplify the IRS procedure for determining independent contractors. Whatever its other advantages, the political implications of these changes are problematic. The proposed changes aimed to shift the burden of proof from the employer to the contractor. Under current rules the notion of common law employee depends on a set of criteria provided and interpreted by the IRS. In the proposed legislation, the standard is the common practices of sector of the economy. Thus if they successfully establish industry of sector policies, employers could be free to reclassify many workers as IC’s. THus far however these changes have been resisted.
Still the use of part time faculty has increased dramatically and colleges and universities have not stopped attempting to define adjunct faculty as independent contractors, As not-for profit universities, such as Harvard and the New School, attempt to exploit the use of distance and continuing education for revenues to fund their "real" faculty, it is plausible to imagine that the scope of independent contracting to provide a cheap and disposable labor force will expand. It is here that I think that the bounds of labor law in academia will be tested.
Thus far in numerous cases outlined here, the IRS has ruled that virtually all types of adjunct faculty must be classifed as are employees and entitled to the benefits of employee status. New rules adopted by the NLRB this year seem to strengthen that position further. Adjuncts should not hesitate to file a grievance with the NLRB or the IRS if they are denied this status.
There is however another challenge looming on the horizon. Just like profit making businesses. which are trying to avoid granting workers employee status by creating or outsourcing the hiring process to dummy companies or third parties. Recently several colleges in Michigan have tried to outsource the recruitment and hiring of adjuncts to an independent educational staffing company EDUstaff. Previously EDUstaff worked primarily as a resource hiring K-12 substitute teachers and contract school work. One of the main benefits for the colleges in this process, is the elimination of college payments into staff retirement funds. One community college estimates it saved $250,000 a year. In addition it appears this move also works to avoid paying employees health care under the Affordable Care Act.
Even more galling was the recent posting of a job for a volunteer professor at Southern Virginia University. The job offer was for no pay, just room and board. While the University claimed that this ad was not meant for general release but targeted at Mormons that would see teaching as part of their mission, it certainly struck a chord with adjuncts who saw it as further evidence of denigration of their status. Many feel they are already working practically as volunteers anyway.
I am not sure that such attempts to sidestep employee status under IRS rules will really work. Adjuncts do not simply step in when there is illness or necessary absence as substitute teachers do, they are clearly employees hired to do a job by the university. However, it remains to be seen however, what the IRS or NLRB would rule. It seems to me however that adjunct and full time faculty should fight these changes and unlike the compliant Michigan faculty simply refuse to accommodate this. The claims made by Michigan colleges that it is hard to fill adjunct positions, seems on the surface to be patently false. There is a large surplus of adjuncts looking for work.
Adjunct faculty could benefit from a strategy that links their fate less to full time faculty who have proved singularly ineffective in defending their adjunct “colleagues” against exploitation (and for that matter resisting the marketization of the university), and more to the general fate of workers in our society. Like adjuncts they are being treated as disposable goods. Most people see educators as a group unlike them and thus do not share a common fate with them. They see them as protected, or as rich well paid employees with special skills. who have become selfish and have lost a sense of public good. They don’t understand why teachers want to strike or talk about educational quality. By bringing to the fore the insecurity of part time work and the economic deprivation adjuncts might make more headway.
