
A story about Upwork and freelancers - scott_s
https://twitter.com/MattFnWallace/status/1060659941491363841
======
gojomo
While the communication should have been clearer, this may not be a matter of
Upwork wanting to upsell the client, but rather Upwork being under legal
pressure from the IRS or state employment-protection agency (eg: California
EDD) to classify workers as "W-2" employees rather than "1099" contractors –
no matter what the workers or employers prefer as being in their own best
interests.

The government bureaucracies prefer this, and have at different times and in
different jurisdictions cracked down on whatever other sorts of work-matching
arrangements startups have attempted to use, for themselves or as a
clearinghouse for others.

The likely threshold for the "compliance issue" could have been that Wallace
(the tweetstorm author) had few or no other clients, and was billing this
single client full-time hours over a significant period. That full-time
exclusivity is a major factor in the tax/regulatory authorities wanting
someone to be classified as a salary- or wage-employee.

Now, the very reason that the ultimate client prefers to use Upwork, rather
than contract directly, is the headache of complying with these rules. They
figure: we might screw up the 1099s, or cross some fuzzy compliance barrier,
and then be hit with an enforcement action, if we try to handle our own
freelancers. But if we use Upwork, well, they're the experts in ensuring
"compliance", and have such a large roster of capable freelancers that neither
we nor they would be at risk of appearing to be in an exclusive employment
relationship.

Thus: the ultimate villains here are the tax/employment-regulation
authorities. They've made the sort of arrangement that both Wallace and the
client prefer incur extra legal risks. Upwork has just been clumsy in
communicating that, and helping those on its platform navigate the rules.

~~~
stanleydrew
I wouldn't be so quick to call the tax/employment-regulation authorities
villainous. The reason these regulations exist is to prevent employers from
treating people who "should be" employees as contractors where they get fewer
benefits.

The regulatory environment isn't set up to handle a situation where an
employee would rather be a contractor, because that's relatively rare.

Ideally there would be some way to take the worker's preference into account,
but things just aren't set up that way and so the assumption is that
contractors need to be protected from employers who want to screw them.

In any individual case an employer could probably document an employee
preference for a certain classification and be fine. But UpWork and state
employment regulatory bodies are built for handling scale, so processes will
tend towards working for the most common situations.

~~~
milch
Making it possible for the worker to document their “preference” would defeat
the entire purpose of these regulations. Companies would simply fire anyone
who doesn’t have a contractor preference

~~~
stickfigure
So instead we're ram-roding everyone into the wage-slavery model. With health
insurance linked to your employer, it's no wonder people are afraid to leave
their cubicles.

I think "big evil corporations" like this setup just fine.

~~~
geezerjay
> So instead we're ram-roding everyone into the wage-slavery model.

Companies like upwork do absolutely nothing to solve that problem. In fact,
they make it even worse by not even considering the idea of offering any
healthcare service to any if their "contractors".

~~~
stickfigure
That's so naive that it makes me angry.

Companies like upwork provide a place for independents to find clients. I
spent the last 10 years earning most of of my income from consulting. The hard
problem is not getting health insurance (you can buy it, it's just expensive
and paid with after-tax dollars). _THE_ hard part about being a consultant is
finding people to pay you.

These marketplaces might not be perfect, but they're a step in the right
direction. I want exactly one thing from them - the ability to find work and
get paid.

------
hughjd
Is this Upwork trying to avoid falling afoul of tax legislation similar to
IR35 in the UK? As far as I understand, it tries to crack down on people like
OP who (in the view of the tax authorities) are essentially employees at a
company but do the work freelance so both they and the company benefit from
various tax perks.

[https://www.contractorcalculator.co.uk/what_is_ir35.aspx](https://www.contractorcalculator.co.uk/what_is_ir35.aspx)

~~~
zapperdapper
Yes, my feeling it was something along these lines. From what I read on
Twitter the hiring company would only use him through UpWork, which is fine
for one offs and so on, but it sounds like they used him a lot, to the point
where there was a question mark over the legal situation - that's why there
are umbrella companies.

I would possibly blame the hiring company more than UpWork, but there's no
doubt UpWork's communication could have been better. Most of my freelancing
has been done through umbrella companies in the past, but increasingly it
seems a better option to use Ltd. company in the UK due to employer those
massive NI contribs.

~~~
TazeTSchnitzel
Ltd companies are expected to also pay NI contributions if IR35-caught,
though?

------
sqrt17
With the raise of all these "platform" companies - basically some inbetween
that solves some QA and paperwork issues, we see that (i) there are "natural"
monopolies/monopsonies developing (e.g. people don't look further than Amazon
marketplace, companies giving out all their work via upwork, people watching
only Youtube videos) and then (ii) that these platform companies start
behaving in abusive and/or arbitrarily damaging ways.

Does anyone else think that this should be an issue for targeted regulation?
No one would accept a company taking over the road network and then randomly
trashing people's cars for incomprehensible reason, yet people seem to be
dreamy-eyed and naive about these new inbetween platform companies and seem to
think that the market will solve itself. (Which is - as may be known - not the
case with monopolies)

~~~
dmos62
I'm always happy when someone brings up regulation in the context of IT. I'm a
big proponent. Everything from closed-source to monopolies and ads. I find it
weird that it's not talked about more often. I wonder why that is. In some
ways it's a relic of the American free-market capitalism, but that can only be
part of the picture.

~~~
dmos62
If someone disagrees or thinks this is an inappropriate comment, I'd prefer an
argument, rather that a downvote. I don't think that what I said has any
negative effect on the discussion.

~~~
plainOldText
You seem to have a very simplistic view of how voting works. Why would you
assume downvoting is a feedback mechanism to signal negative posts only?
People downvote for all sorts of reasons.

I for instance downvoted your comment, for supporting a blanket regulatory
attitude across the IT spectrum. It's tantamount to proposing a single
programming language across the whole stack. That portrays a very narrow view
of the world. Not to mention it can lead to being counterproductive.

Do note, human communication is a complex endeavor. We employ all kinds
signals and techniques for information exchange and a simple downvote in an
online forum is a perfectly valid signal, albeit an ambiguous one.

~~~
dmos62
> blanket regulatory attitude across the IT spectrum

That's jumping to conclusions. I didn't elaborate at all what kind of
regulation I support or how granular. I now feel that my comment wasn't up to
the standard, because it has a bad mix of off-topic and terse "snarkiness".

As to the usage of downvotes, of course you can use it however you like, just
like you can dismiss anyone you like whenever. I'm referring to a common
_regulation_ in communities, that a comment shouldn't be dismissed if you
don't like it, but only if it has a negative effect on the discussion.

What do you hope to achieve by downvoting those you disagree with? Force their
opinions to the bottom of the discussion stack? I.e. silence them? That's what
you're effectively doing, and it's not conducive to a healthy community.

~~~
plainOldText
I rarely downvote those I disagree with. And when I do, my goal is to have
them reconsider and question their position and not at all to silence them.

I fail to see how I jumped to conclusions. You clearly stated that vis-a-vis
regulation:

> I'm a big proponent. Everything from closed-source to monopolies and ads.

If this is not an extreme pro-regulation attitude then I don't know what is.

And just to be clear, comments are clearly superior to downvotes, though we'd
hardly get any work done had we written replies to all comments we disagree
with; thus, occasionally replying via downvotes.

------
rmoriz
Rule #1 when working with/on a platform: Transform customers to your own
platform. Do it in a way that does not violate the AUP of the platform but do
everything you can to „own“ the customer contact. Never become dependent of a
single platform that temporarily may work in your interest.

This rule is somewhat universal and matches all business types and platforms:
Amazon, eBay, AirBnB, Uber, YouTube, App Stores.

~~~
tedeh
Unsurprisingly, Upwork expressly forbids this. "Keep contact with potential
clients inside Upwork [... or risk account termination]".

[https://support.upwork.com/hc/en-
us/articles/211067618-Freel...](https://support.upwork.com/hc/en-
us/articles/211067618-Freelancer-Violations-and-Account-Holds)

I'd say once a good match between a contractor and a client has been
established, both parties should swiftly move away from the Upwork platform,
their rent-seeking "rules" be damned!

~~~
CodeWriter23
> Keep contact with _potential_ clients inside Upwork.

You can email, Skype, phone once on a contract.

~~~
GarrisonPrime
True, but of course Upwork cant help you if a problem then arrises.

Not saying one shouldn't do it, but as Upwork is so flooded with shady
characters I'd be hesitant to move clients off the platform too quickly.

------
sandov
Twitter has such a crappy interface. Takes like 3 seconds to show anything at
all, then half of the time it throws an error and asks me to try again, and
when it works there's an unclosable banner asking me to join twitter.

~~~
paulgb
Here's an alternative UI for this conversation
[https://treeverse.app/view/FFBtBwxG](https://treeverse.app/view/FFBtBwxG)

(disclosure: Treeverse is a free-time project of mine)

~~~
imhoguy
This is really cool! One thing: Firefox content blocking somehow prevents
avatars from loading - I get empty boxes.

~~~
paulgb
Weird, desktop or mobile? They load for me in Firefox on MacOS (it's actually
my main browser, despite Treeverse being a Chrome extension for now)

~~~
imhoguy
Desktop. I know why now. I had "Browser Privacy" > "Content Blocking" > "All
Detected Trackers" set to "Always", the default is "Only in private windows".
And because FF uses Disconnect.me list it means all embedded social networking
load gets cut off.

------
hn17
Upwork is partially automated. They probably use market position to manipulate
users. I had some bad experience and no communication also. When you register
account, Upwork "moderates" your profile and "decides" if you can start to
work with clients. They have some kind of automated moderation with percentage
pass value. It's not working great. If you aren't using in your resume a lot
of words that they think are marketable you will be banned as not being
eligible for working with Upwork. They will send you e-mail with misguiding
information that you aren't good fit for them in nice words and that you can
reapply in the future. Reality is that some bad data processing took place.
For many people reading such type of e-mail that they send can be offending
(if not depressing in cases when they didn't get what happened). In my case I
just added some more keywords and tags because I was almost sure what happened
and resubmitted profile. After a couple of hours my account was Up and Working
;) No sorry or any other information from them - not a nice way of starting
bussiness with a client.

------
ddtaylor
I have seen a similar thing by Upwork happen. The problem also is that by
accepting the first freelance job you agreed to a two year exclusivity
contract on the platform, so not accepting their new terms of payroll means
you cannot work with them anymore.

You might be able to work around it though by creating a new incorporation of
changing juristiction, but that's a bit complicated. It's also not clear if
Upwork's contract is legal or enforceable.

~~~
pvaldes
> by accepting the first freelance job you agreed to a two year exclusivity
> contract on the platform

I think that is only If you want to work for the same client again [Maybe has
being changed in the last years?]. After a few jobs some clients will try to
circumnavigate the platform. In any case I wouldn't be very surprised if some
of this clients were disclosed as upwork employees in the future pushing their
own agendas.

After spending some time in the platform you can see lots of strange patterns
repeating here and there.

------
eganist
Unrolled:
[https://threadreaderapp.com/thread/1060659941491363841.html](https://threadreaderapp.com/thread/1060659941491363841.html)

------
foo101
Why are people still using Upwork? How many of these horror stories do we need
to come across before people learn to ditch Upwork for good? Here was another
horror story that I read sometime back: [https://hackernoon.com/why-you-
should-never-use-upwork-ever-...](https://hackernoon.com/why-you-should-never-
use-upwork-ever-5c62848bdf46) It has been two years since then!

Heck, everyone ditched Digg in a matter of weeks due to a UI redesign. How on
the same earth are people still using Upwork despite issues that are for more
serious where people's livelihoods are affected?

~~~
mrhappyunhappy
Some people don’t have any alternatives to upwork. Even though the platform is
shit it still puts food on the table. I still have an upwork profile but most
of my business is word of mouth. The reason I keep it is because due to how I
phrased my profile, once in a blue moon I get a good lead.

~~~
tnolet
Freelancer here. I understand what you're trying to say. But this is simply
not true. Freelancing existed before Upwork and will exist after.

~~~
alrehn
If you've got a lot of experience and connections, finding freelance work on
your own is easy. The thing that feeds sites like upwork is people with less
of that, people that will work for pennies, often from third world countries.
For me, a few years ago I was in school and wanted some income from
programming. I managed to get some work on a site that has since been bought
by upwork, worked for $10-15 an hour. If not for that site I'd have never
gotten that work, and be much worse off now.

------
praptak
So, why didn't the company contract him directly in the first place? We want
you to work for us but do so via a third party? Sounds fishy.

~~~
mrhappyunhappy
Obviously because they value his work so much.

------
agentPrefect
The amount of colossal horror stories I've heard about that company has made
sure I don't go near it with a 9 foot pole. Their platform is designed to
obscure process in lieu of exploiting workers - all whilst advocating to
"serve the client". Utterly toxic.

------
Hoasi
Adding back the middlemen beats the whole point of freelancing, which is to be
on your own. I understand that sometimes the clients are using the
"freelancers" platform(s). But if you trade independence for a little bit of
convenience, don't be surprised to find you are being used.

~~~
ilaksh
It's not about a little bit of convenience. It's about being able to pay rent.
You have to go where the business is.

The majority of the freelance jobs out there are on Upwork and cannot or will
not afford benefits or competitive US rates.

------
pbhjpbhj
Sounds reasonable to me.

The company can't employ him for full-time work as a freelancer, due to
regulations that protect workers rights. Whilst that might be a problem: it's
like one person doesn't like it and millions need it to protect their
livelihood.

Upwork wouldn't inform him because it's nothing to do with him, he's a
freelancer not an employee (the reason for the whole issue). If he were an
employee obviously payroll (who Upworks represent in this case) would have to
give notice etc..

So, in part he's complaining about not getting the protections that a full-
timer does - notification of change of work, conditions, hours and such -
whilst simultaneously arguing that he should be released from those same
protections.

I mean who wants holiday pay, sick pay, employer pension contributions, job
security, etc. ...

~~~
ilaksh
That company isn't going to hire him full time. It will cost a lot more. What
this does is just take his biggest client away from him. They will just find
another relatively inexpensive contractor.

So if these 'protections' are going to work out then they need to account for
the financial situation of the employers some how and also prevent them from
dropping misclassified employees when they become properly classified.

------
Lazare
Reading between the lines a bit, it seems:

1\. Wallace was on Upwork to freelance.

2\. Wallace was working for one client so much that he was at risk of becoming
an employment relationship, rather than a freelancing one.

3\. At no point was Wallace prevented from freelancing on Upwork; Upwork (as
far as is known) presented all valid opportunities _to freelance_ to Wallace.

4\. Upwork communicated to the client that if they wanted to keep working with
Wallace, they'd need to hire him.

5\. The client refused to hire Wallace, and tried to find ways to circumvent
labour laws.

That seems to me to be a plausible interpretation of the facts from the
twitter thread. In which case, the client seems to be the villain here, Upwork
has done everything right, and Wallace seems to be a bit confused.

In particular: "The marketing company, as confused as I was, pressed @Upwork
further. @Upwork would NOT tell them, refused to tell them what those supposed
compliance issues were. [...] So for the marketing company to continue
assigning me work, they have to enroll in @Upwork's 'payroll service' to do
it."

This doesn't add up to me. Either Upwork is refusing to tell the client why
they can't hire Wallace as a freelancer, __OR __they 're telling the client
they need to hire him as an employee. They can't really both be true! I don't
know who's lying/confused here (maybe the client's HR dept is lying to
Wallace's contact at the client, maybe the client is lying to Wallace, maybe
Wallace is just confused), but it seems pretty clear that Upwork _is_ angling
for the "payroll service" upsell, and was telling the client very clearly that
they need to hire Wallace. (That's not the story they told Wallace, but it
doesn't seem like they really had Wallace's best interests at heart here, as
they had a wide number of options available to them to fix this.)

And: "So @Upwork is insisting the marketing company make me an employee"

Yeah, pretty sure that's a legal requirement there buddy. And yes, I
understand that both you and the client would like to circumvent it, but
that's the point of labour laws; they only apply in cases where people wanted
to do something they ban. Minimum wage laws have no impact on the engineer
making $120k a year; they impact (for good or ill) the immigrant willing to
work for $5/hour. Laws requiring firms to treat people working full time
workers as employees were passed explicitly to cover the people who are happy
to work full time as contractors.

~~~
windowsworkstoo
Upwork wouldnt have visibility into any other customers he may or may not have
had, so it doesn’t seem like their call to make.

In Aus we have something sort of similar for contractors called personal
services income. The rules are somewhat complex but it roughly boils down to
the 80/20 rule - if you derive more than 80% of your income from a single
customer, you have to treat that income as if you were an employee. Note that
the burden here is on the contractor and enforcement is via the tax authority
- as opposed to this case where the employer seems to be on the hook

------
sheeshkebab
This looks to be a typical problem with staffing body shops, especially those
that bench their consultants without pay while having them wait for next gig.
IRS and labor agencies look down on that sort of thing. There are similar more
vague shops too MBOPartners (Randstad) and others, that have similar issues.
Since they control all billing and contracts, they are basically this shady
body shop that really needs to have its ass examined thoroughly and
periodically by government.

Advice to consultants - avoid these places and sign your own contracts direct
with customers, and invoice your customers yourself.

------
kemitchell
PSA: The Supreme Court of California recently published a key decision on
independent contractor versus employee classification, adopting an "ABC" test
akin to the one adopted in Massachusetts.

[http://www.courts.ca.gov/opinions/archive/S222732.PDF](http://www.courts.ca.gov/opinions/archive/S222732.PDF)

> [A] worker is properly considered an independent contractor to whom a wage
> order does not apply only if the hiring entity establishes: (A) that the
> worker is free from the control and direction of the hirer in connection
> with the performance of the work, both under the contract for the
> performance of such work and in fact; (B) that the worker performs work that
> is outside the usual course of the hiring entity's business; and (C) that
> the worker is customarily engaged in an independently established trade,
> occupation, or business of the same nature as the work performed for the
> hiring entity.

------
kleopullin
It's a bit in response to a change in California laws. California has always
more strictly enforced employment regulations, especially with regards to
contractor classifications.

[https://www.bizjournals.com/sanfrancisco/news/2018/09/04/cal...](https://www.bizjournals.com/sanfrancisco/news/2018/09/04/california-
s-new-contractor-test-will-impact-the.html)

------
jorgemf
In my country is illegal to have someone as a freelance doing the same as a
full time job. So I see the point of upwork. If that company is your only
client and you are working full time with them, they should hire you (at least
in my country). In my country you have more rights if you are full time
employee than if you are a freelance, as for example a monthly pay after they
fire you to help you to find another job

~~~
sfifs
Yup this seems to basically be co-employment risk mitigation. I have seen
situations where there is a hard limit on how long we can hire a contractor
for a task through an agency. I have also seen limitations in what we can
specify, measure, reward and what we cannot.

The issue is basically that for contractors, you generally pay no benefits or
retirement plans. However, if they are effectively employees, you do need to
pay them that (ref. Uber driver cases where they are suing for classification
as employees)

------
dna_polymerase
So Upwork actually recognized that this company is completely screwing him and
he is mad at Upwork. Great.

If the company is hiring him for so many jobs that he is basically a full time
employee there they are the arseholes not Upwork. That marketing firm get
their shit together, hire him and pay him the money (and the extras) he
deserves.

------
vadym909
This is fucked up but not because of a Government regulation which has good
intentions and not because of Upwork who is trying to reduce its client's co-
employment risk. All freelancers come across this situation over time and all
are amazed but it is very reasonable.

The labor laws in place are to safeguard companies from using employees in a
fulltime manner but treating them as freelancers so they dont pay the 10%
employer tax, or sick leave or vacation or minimum wage or overtime. Once you
start hitting over 30 hrs/week, and for more than 3 months workign for the
same company- you are hitting the red warning flags that either the IRS is
going to start asking questions about why they're not getting the employer
tax, if th freelancer claims unemployment they are going to look for the last
employer. and the freelancer might himself decide to sue the client claiming
he was misclassifed as a contractor.

In this case all he has to do is enroll in the payroll service, pay a little
more in taxes and reduce the co-employment risk to his client in exchange for
more regular work. If not diversify your client base.

~~~
hippich
1099 paid freelancers pay self-employment taxes, including the equivalent of
all the social taxes. Why does government care? (there are no sick leave or
vacation minimums in the USA)

------
chiefalchemist
Not to get off topic but if this guy owned his own agency he would have /
should have been well aware of IRS' regs. That said, his agency went under.
Not so sound nasty, but perhaps common sense and detail are not his strong
suit?

~~~
majc2
Sure maybe. I guess my takeaway, is that a growing percentage of the workforce
are locked into platforms for income - and how they are treated by those
platforms can have a massive personal financial impact.

Back in my freelancing days, I made a conscious effort to own the whole
conversation - not to use a platform - but to do my own marketing.

As an aside, I've found it interesting to watch youtube videos made by Uber,
Ubereats, Deliveroo delivery people - by scooter chargers and how they all
discuss how to make more money - or to complain about changes in policies
having a financial impact on them.

~~~
chiefalchemist
IDK, those platforms are not agencies. They are a dating service meets escrow.
They not in the relationship business. If the hiring company __and__ the
freelancer don't know the law - and clearly both of themt should - is that
Upwork's job? To give legal advice? Sounds more like Legal.com to me.

Upwork saw an obvious red flag and covered it's arse. I think they could have
done a bit better, but the Twitter rant is foolish, at best.

------
creaghpatr
What’s the best alternative to upwork at the moment? I almost put a job on
there but they spammed the crap of me and the process was way to much for what
we needed done.

~~~
pluc
mondo.com is recommended in the Twitter thread

~~~
dexterdog
Mondo is just a typical body shop. I did a very short contract through them
once which was a nightmare. They took forever to pay and nobody seemed to
understand the payment schedule so getting an answer as to when I was going to
get paid was a constant punt of responsibility around the company.

Sure it's just one experience, but they are crossed off in my book. I still
get their recruiters emailing me on occasion (often more than one of them for
the same position which is its own kind of mess), but I set the domain to just
go right in the trash

~~~
dylz
Hilariously I've gotten phishing and malware from Mondo domain because their
recruiters keep clicking on malware, compromising their accounts, etc.

------
mkagenius
Is it true that we would never be able to do away with such middle-men like
uber, airbnb, google search and instead use some sort of non profit alternate
of these?

~~~
toofy
I imagine it is only a matter of time before we have alternatives to things
such as Uber or Airbnb which arr driven by open source and cooperatively owned
infrastructure.

It’ll be so frustrating to watch the current leaders in these industries, the
companies who are actively fighting for ways to get around regulation, as they
suddenly begin to fight _for_ regulation to keep cooperative or community
owned infrastructures out of the competition pool.

~~~
ilaksh
I have been saying stuff like this for a few years.

I think it is obvious that P2P distributed platforms will be leveraged to
replace the monopoly company platforms. Things like cryptocurrency payments,
Ethereum smart contracts, IPFS, Swarm framework, dat, WebRTC, etc.

------
k__
I looked into stuff lole Upwork and Fiverr.

I'm not into projects that are under 3 months, so I didn't use these
platforms.

But there are enough alternatives (CodementorX, Toptal, Uplink)

------
gigatexal
Related: this is what I love about Twitter — people posting and getting
support and the ability to shame publicly companies who are being jerks.
Albeit I’m hearing only one side it seems that they’re trying to force
companies who want to use stellar upworkers by putting them behind their own
payroll paywall. How lame.

------
gaius
This was a systematic attempt by all three parties to defraud the Inland
Revenue, Upwork is generally pretty sleazy but they blinked first this time.

------
mrhappyunhappy
I put a job up to code me a web app for $200 and nobody replied. What a shit
platform.

~~~
DonHopkins
Try explaining that you're an "idea guy" looking for a programmer to implement
your great ideas, and that you'll compensate them in equity when you make it
big, because your ideas are worth so much more than anyone's execution.

~~~
mrhappyunhappy
Nice. Sell them on a vision. Of course, why didn’t I think of that!

