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How will the Dept. of Labor rule about independent contractors/employees affect Upwork freelancers?

The U.S. Department of Labor is currently in the midst of a comment period for a proposed rule (https://www.federalregister.gov/documents/2022/10/13/2022-21454/employee-or-independent-contractor-c...) that would affect how people are classified as independent contractors or employees, generally making it harder to classify workers as independent contractors. Although it seems the rule isn't intended to affect freelancers in white-collar professions like writing, graphic design, etc., I find the rule unclear and subjective. There are several criteria that point to me being an independent contractor -- for example, I can negotiate pay for projects I take on, choose the time and order in which I complete projects, work for many different clients, and buy the equipment necessary for my work. But the rule also says that if you do work that's "integral" to a client's business, that points to employee status. As a writer and editor, my work could be considered integral to some of my clients, like marketing companies and newspapers. Hourly work is also mentioned as something that indicates an employee rather than an independent contractor -- how does this affect us when using Upwork's time tracker, which is the only way to get payment protection?


I'm worried this will make clients afraid to work with freelancers -- which happened in California a few years ago when they passed a law narrowing who could be classified as an independent contractor. A lot of freelancers reported they lost clients: https://www.forbes.com/sites/elainepofeldt/2020/01/19/californias-ab5-leaves-women-business-owners-r..., https://www.cnbc.com/2019/12/11/californias-new-employment-law-is-starting-to-crush-freelancers.html


I've already posted a comment on the rule with my concerns, but I'm curious what Upwork is doing to protect freelancers and independent contractors -- and protect clients so that they're still willing to work with freelancers.

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For enterprise clients, optionally, upwork provides compliance services. Basically a "classification manager" is assignrd to the client who will assess every contract to make sure theres no risk of being classified as an employee.

Community Member

Historically anyone working 9 months or greater for a business is considered an employee.

I've never heard of such a thing and I've been earning my living as an independent contractor since dinosaurs roamed the crosswalks. I've worked for specific clients for years as a contractor because it's defined by the nature of the relationship, not the duration. 

Exactly.  I doubt the proposed legislation will affect us.  One of my clients (off the platform) panicked when the California rule passed and made me a part-time hourly employee, unnecessarily IMO.  I doubt that writing would be considered "integral" to a business.  I'm a paralegal but I am not practicing law nor giving legal advice (which would be integral) so I should be fine.


And Phyllis, I agree.  I've been freelancing since I was a young middle-ager and I've never heard such a time limit delineation.


Community Member

II do not believe this will include freelancers. Even in California, there is still a lot of confusion.


I think gig workers, like meal delivery, etc. may come under the law, but not freelancers who work online. Upwork doesn't tell us who we have to work with, how often or how long. I think it will be years before freelancers are employees.


What is Upwork doing? That's an unknown. Many times they don't tell us anything, even if they are doing something.

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