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Employees vs Contractors EBook US

Free Payroll eBooks for Small Business Owners and Startup Founders in the United States & Canada

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Page 6 of 19

In the US self-employment rose to 17.7 million people, between 2008 - 2013, representing a 5% annual increase during the last few years, which indicates that the 'shift to independent white- collar work' is here to stay. 1 The recession accelerated this trend globally, with financial necessity encouraging many to seek alternative careers, including self-employment and building startups. Self employment has particularly benefitted startups, because depending on the job role, startups can employ contractors more easily than employees, thereby lowering their burn rate. This has also gone hand-in-hand with Millennial's starting their careers as a result of fewer traditional job opportunities, and newly unemployed skilled middle aged workers making a career shift into self employment. Unfortunately for startups, we are seeing a market backlash against employing contractors when they are actually employees. A case in New York against a strip club, another against Lowe's in 2014, and eight other cases currently in various courts, including one against the Silicon Valley cleaning startup, Handy, is a clear indicator that the government won't put up with startups purposely misclassifying contractors and hoping to get away with it. This practice is also common amongst the likes of Uber, Lyft, Homejoy, SpoonRocket, Taskrabbit, and Postmates, but with recent cases this policy will need to be reviewed in order to mitigate risk of fines and penalties. Self-employment is on the Rise | Pg. 7 1 Justin Fox, "Where Are All the Self-Employed Workers?," 7 Feb. 2014, Harvard Business Review: http://blogs.hbr.org/2014/02/ where-are-all-the-self-employed-workers/. Source: Dominic Tarn, The New Goldrush: A Quick Guide to Startups, (Revised Edition, Amazon KDP, 2014) p.27 Self-employment is on the Rise Trends in t he Workforce

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