We're all temporary workers now. Yes, the FTE 3 letter mnemonic should stand for f@&*ed temporary employee instead of full time.
The latest outrage du jour is how employers are miscategorizing workers as independent contractors to avoid paying unemployment claims, workman's comp. and payroll taxes.
In IRS, States crack down on independent contractors, we have this:
The Internal Revenue Service and 37 states are cracking down on companies that try to trim payroll costs by illegally classifying workers as independent contractors, rather than as full employees, The Associated Press has learned. The practice costs governments billions in lost revenue and can leave workers high and dry when they are hurt at work or are left jobless.
Many who have studied the problem believe it's worsened during the economic downturn, fueling even more aggressive recovery efforts by states.
"I think the economic downturn has had a serious impact ... has exacerbated the problem," said Vermont Rep. Warren Kitzmiller, who chaired a panel that recently reported on the issue. "Businesses are looking to trim costs in every way they can, and some are coming very close to shading the legal with the illegal on that question."
For a growing number of companies, including Target, FedEx Ground and Comcast, cutting costs means removing workers from the payroll or bringing on new workers — sometimes through intermediary companies — without making them full employees.
What the article does not tell you is those 3rd party contract houses, such as manpower, kelly services and on and on, take a profit cut out of that worker's wage on top of things. So, these third parties, act like glorified slave traders, taking a 20% to 70% cut of the worker's hourly wage and it's all to avoid taxes, unemployment and benefits to the actual worker.
So, the practice is beyond employers miscategorize workers to avoid paying benefits and taxes, it's also the way the IRS has the laws written, so these 3rd party slave traders have a flourishing business to keep all of this legal.
Who gets screwed? Why the workers of course!
The article also fails to mention the oxymoron of full time permanent employee. The length of stay at most jobs has dropped dramatically and this is because of institutionalized age discrimination and companies looking at their employees as some sort of commodity they can get rid off to improve their quarterly profit bottom lines, pretty much when they feel like it.
By designating workers as "independent contractors," businesses can save as much as 30 percent of payroll — avoiding unemployment insurance and workers' compensation payments, as well as the employer's share of payroll withholding.