Here is how the contractor scam works:
Let’s say you’re a big and wealthy corporation. You have lots of money and lots of assets. You have lots of employees.
You’re also evil. But I repeat myself.
Now let’s say that you want to screw your employees. You want to make them work overtime without pay, you want to withhold paychecks from time to time when you yourself want a little spare change to gamble in the stock market, and so forth. Thing is, there’s these little things called “laws”. If you do that, the employees will sue you and the federal government will sue you and lawyers will get rich but you won’t.
What to do… what to do…
Ah yes. Here’s what to do. Create a sequence of shell companies. Have some of those shell companies own another shell company, a contracting company. Fire significant numbers of your workers — the ones you want to rip off — and have them go to the shell company instead. Then have the shell company rip them off.
At that point, the Feds say “Quit doing that, Amazon.” And Amazon says “We’re not doing that, it’s our labor contractors, talk to them!” And the Feds say “Okay contractors, quit doing that!” And the contractor says “Derp derp derp?” And the lawyers for the workers sue Amazon and Amazon files for dismissal because they’re not the employer, Some Shell Contracting Company is the employer, and the court agrees. So the workers sue Some Shell Contracting Company, which loses and promptly declares Chapter 13 bankruptcy and all $3 in their bank account is divided amongst all the workers. End of story, right?
Well, seems like some courts are starting to notice that something smells in contractorland, i.e., that some “contractors” are just employees with all the responsibilities for complying with labor laws pushed elsewhere. Thus FedEx drivers just won a lawsuit to be classified as employees, not contractors, because that’s what they do for a living — they drive FedEx trucks. Bad court. Bad, bad court. How can evil corporations be evil, if you start holding them responsible for their evil? I expect that this trend will shortly be curtailed by law. After all, big and wealthy corporations have plenty of bribe money err “campaign contributions” to spread around, while their victims usually don’t.
But hey, that’s cynical, isn’t it? I mean, that assumes that money buys laws, and that never happens, right? Right?!
- Badtux the Snarky Penguin