The other day I had a conversation with an employee at the California Employment Development Department, which contrary to what the name implies is not strictly interested in developing employment. The reason we had the conversation was because a client of mine was being investigated to see if they had properly classified me as an independent contractor. The purpose of the call left me scratching my head. I’ve been working as an independent contractors since 1993. Why would it suddenly be different now?
Well, it turns out it is different now. Thanks to a law passed in 2011 (SB 459) the great state of California added new criteria for determining an independent contractor’s status, and as an added bonus included in the law fines for companies that knowingly misclassified employees as independent contractors. Hence the call from the EDD. The nice employee (I’m not being ironic here, the employee was pleasant on the phone and took great pains to help me understand the law, without ever leading me or telling me what to do. They are quite talented at their job.) lead me though a fairly informal interview and was careful to gather all the input I wanted to give. Finally the conversation ended, but I was left with an uneasy feeling as if I had forgotten something. I can’t be the only one here who remembers the right thing to say 20 minutes after the conversation has ended. After first writing my local state representatives asking for the Assemblymen and Senators who work on the appropriate committees, I sat around and thought about my position. The remaining paragraphs are the result of a weekend worth of pondering.
The name of the employee is intentionally omitted here, as any reference to their gender. Like I said, I found the employee talented and was obviously doing their job to the best of their abilities. In no way did I find fault with them or their actions. They don’t set the rules, our state legislature do that. If you have any complaints please take it up with them.
I’m writing to you after our conversation the other day regarding COMPANY NAME. Over the weekend it occurred to me that I may have missed some points that could be pertinent to your investigation. I thought I would write in hopes of clarifying these points. Please excuse the length. I’ll try to keep this as quick as possible.
From our conversion I was left with the opinion that one of the defining characteristic of an employee (as opposed to an independent contractor) was whether the individual worked at the office of the company and used their equipment. Since I often work at my clients offices and use their computers, I can see that this might be a determining characteristic. However, I feel like there is an important distinction here that may have been missed.
Most of my clients have dozens of computer stations set up around their offices. The computers are all similar if not identical in abilities, and all pretty much run the same software. They are as alike as the tech guys can maintain them.
Working on these computers will be a whole host of employees and freelancers, like myself. The value that each person brings to his or her computer is related to their knowledge and expertise. Broadly speaking, there are a few people who make about $15 per hour, a larger group that make around $50 per hour, and finally a few rare individuals who make over $100 per hour. When I say, “make” here I’m talking about what the individual directly charges the company, or the value they bring to the company. Because these people can move about the office, it’s quite common for a computer to have a $15/hour employee working on it one day, and a $50/per hour employee on it the next.
Now if a computer is on Monday making $15/hour for the company, but on Tuesday is making $50/hour, then it would not be accurate to say it is the computer that is bringing value to the company. Because the same computer should, if it was the source of the value, provide a similar value every day of the week. But it doesnt. In fact the computer’s value to the company varies in direct proportion to the person who is using it. That is to say the money the computer generates comes not from itself, but from its users. If they are all running the same software, and have very similar abilities, then the only difference must come from another source. That is, the users.
This is the nature of all work that is a craft; that is a type of work in which the individual “crafts” or creates an art piece. All craft is like this, be it sculpture, pottery, wood carving, or even the more abstract crafts like writing, playing guitar. Much like a potter making mugs on a potter’s wheel, or a sculptor carving images in stone, the value of the work comes directly from the value of the crafter, not from the tools. One would never praise a potter’s wheel for making finely crafted mugs, nor a chisel for carving excellent sculptures. No it is understood that the work comes from the hands of the wielder, not the tools. In the same way, one would never assume it is the computer doing the work of making quality advertising art. Like every other craft, it is the people wielding the tools that create the work, and create the value.
In this context, computers are not a source of value, they are an overhead cost, much like any other office expenses like air conditioning, desks & chairs, telephone systems, or copy machines. They may be a requirement to create the work, but they do not create the work themselves. They are no more important to the value of the work than the air conditioning system, or the type of paper in the copy machine.
So far, all of this is to argue that computers are merely office equipment, a point you likely already accept. It is this next point which I think bears greater scrutiny.
If it is true, as I have laid out above, that the greatest single value brought to any piece of craft stems from the individual doing the work, then it follows that the single greatest tool being applied to the craft resides inside the user. That is the say, the person doing the work is also the holder of the most important tools.
I know this might come across kind of crazy, so let me try to break this down for you. The worker in this context, the one doing the crafting, carries with them two essential things; their knowledge and their abilities. That is, they carry with them what they know, and what they do. These, I would contend, are the most significant differences between someone who does $15/hour work on a computer and one who does $100/hour work. The person doing the more valuable work, has more knowledge, more experience, and they have more tools. This is what I mean by tools. In this narrow context tools are ways of solving technical and artistic problems.
Some of these tools exists in the hands and the eyes of the user, but a vast majority of them reside entirely within their head.
If you think about it, this makes sense. Every computer I work on (and I work on a whole host of them) offers the exact same value when I am using them. This is because the value resides within my head. It’s not in a box I bring to the office, it’s not any special software I keep on a hard drive, it all resides within my head. Quite literally, every office I work at, I go there with my own tools. Not only are they my own tools, but they are the most significant tools in the entire process.
So when you ask if I work in my client’s offices, I will say yes. When you ask if I use their computers I will say yes, but the most important tool I use comes not from the client, or from their commuters but comes from myself. I literally am my most important tool. My head, my hands, and my eyes. It is from these things that my income flows, and nothing else.
So if the most significant tool is the one that resides in my head, then is it accurate to say I am an employee, and not an independent contractor? After all the most significant tool is not supplied by the company I work for, it is supplied by me. If I’m the one providing the most significant source of value, doesn’t that not make me independent?