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A story about Upwork and freelancers (twitter.com)
342 points by scott_s 69 days ago | hide | past | web | favorite | 140 comments

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.

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.

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

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.

> 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".

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.

As a salaried employee, I hated the benefits my company provided, but it was worse to go without because I'm ineligible if I turn it down. Since leaving my company and consulting full-time instead, I:

- pay less for insurance - after my subsidy, I pay less than my portion as a W-2 employee for nearly equivalent coverage - pay less for funds in my solo-401k without any other fees - don't get a FICA deduction for my HSA contribution (not sure why you have to be a W-2 employee for that deduction) - make more, even after additional FICA taxes

I was already an "at-will" employee, so I didn't get much more protection anyway, so leaving my company and working as a 1099 was a net win with pretty much zero downsides.

I really don't understand why the IRS is so adamant about making people W-2 employees, it's quite often a worse situation.

So you mean to say the tax authorities do this unintentionally ?

Is that supposed to be better, or worse ? They're some combination of incompetence and malevolence. I feel like incompetence is worse.

That's not what I said at all. They are intentionally trying to prevent employers from abusing employees by forcing them into contracting arrangements with fewer benefits.

Trying one thing, not achieving that one, but achieving another bad thing in the process. How is that not failing ?

Upwork has been in the news more than enough to make it VERY clear that if there's any kind of organisation that needs to be prevented from exploiting others, it's Upwork.

> This may not be a matter of Upwork wanting to upsell the client

> Thus: the ultimate villains here are the tax/employment-regulation authorities.

Why be so quick to think that this may not have been Upwork's fault, but the ultimate villains definitely are the tax/employment-regulation authorities?

If there is a regulatory issue at stake, the correct thing to do is to disclose it quickly and transparently.

Upwork (and other freelancing websites) have no communication problem when it comes to telling you that you need to pay them some new fee, or when it comes to allegedly violating their terms and conditions. But when there's a regulatory problem, it's "just" a problem of communication? Hard to believe.

It's pretty clear from their wording if you are already familiar with these issues. This tax classification thing of "contractor" vs "employee" is a standard bugaboo lurking in these waters, and Upwork is doing a terrible job of articulating it and dealing with it.

Their silence comes off at best as "saving their own asses" and at worst as "saving our own asses while doing as little work as possible to retain clients and customers". Neither make for a feel good story.

Doesn't seem hard to believe that this doesn't happen very frequently and that whatever customer support person happened to respond to the freelancer's ticket went into the internal knowledgebase and just lazily typed up something regarding "compliance."

Have you ever worked with this sort of platforms? Because this is pretty much all in a day's work there. Things have slowly degraded from back in the days of the first freelancing platforms (e.g. Rent-A-Coder) to a state where it's nothing short of a disaster.

Virtually every freelancer or contractor I know uses these platforms when they're starting out in order to develop a basic network of contacts and a steady (if very badly-paid) stream of contracts to build on. But as soon as you can avoid these platforms, you do. And not because of the fees, which aren't that high, but because of the disastrous support (like in this instance) and lack of protection against scamming.

Because governments are well known to do this and everything about this sounds just like many other cases.

Upwork, Freelancer.com & friends are equally well-known to do this.

To do what? These companies have zero interest in this tax-related issue. It's a burden to them, actually.

So you're waiving all blame for Upwork not bothering to actually tell the freelancer that they have crossed this "you're working like a full-time employee and the law says you need to actually become one" threshold?

Because this sure feels like something that should generate a big HEY YOUR RELATIONSHIP WITH THIS CLIENT NEEDS TO CHANGE email/banner/etc.

I’m surprised Upwork didn’t spell this out for the freelancer from the beginning.

I was in a similar situation with a company in LA, and my contracting company alerted me to it, and helped me transition to full time employee status with the client company, once i’d Worked enough hours with the contracting company.

Not "waiving all blame", just attempting an accurate diagnosis of what's obviously Upwork's fault (bad communication), and what's the root cause of the disruption in Wallace's earning capability (laws which essentially force Upwork to suppress an otherwise-desirable contractee-contractor relationship).

> Upwork has just been clumsy in communicating

That’s a pretty big “just”

Depriving someone of what had been a key business relationship without any communication is an abject failure.

We know that Wallace is angry, and didn't get clearer info until he hunted it down, and that's certainly a failure.

But his account doesn't include a timeframe of how many days he was in this "lockout" state. (Was it a day? A week?) It's not clear if other details would have come via other channels, if not for the early warning he got from his direct backchannel-contact.

And suppose he and the buyer had reached a de-facto understanding: "we want to contract you for all your hours; please hold back your hours from other buyers to be ready to take our assignments". That's somewhat indicated by way this was quickly discovered at the moment he finished prior assignments (seemingly from the same buyer), and the buyer tried to hire him for immediate followup assignments. It's exactly that kind of de-facto exclusivity, where a single employer assigns all your work, that gets you slapped by tax/employment authorities.

Were there other highly-rated, qualified freelancers the buyer could have used instead? Were there other buyers ready to contract for Wallace's services, at the same rate as he'd been getting? If either or both, then rather than primarily "depriving someone of… a key business relationship", Upwork could in fact have been ensuring enough independent-contractor relationships to keep both buyer and freelancer on the right-side-of-the-law. (It's possible placing a single gig with another freelancer, or taking a single gig from another buyer, would have been enough to prevent the lock-up.)

After all, the buyer chose Upwork as the only way they hire contractors – and explicitly rejected the option to hire or contract with Wallace directly. They wanted Upwork to ensure compliance with tax/employment-law... which may be exactly what Upwork did for their paying customer, albeit with missing, poor, or sluggish communication.

Yeah sure so what. All that rationalization is out the window if they just cut someone off like that without actually communicating those reasons.

The reason I take exception to it is that the concept of shadowbanning is deeply baked into the SV/startup culture and it's very often completely unethical. It's a pet peeve of mine.

Sure, if you're trying to stop forum spam then who cares. And I do understand that when startups were small they were incredibly vulnerable to just being overwhelmed by an avalanche of fraud. So historically, I get why there's a culture where platforms just ban or restrict people without telling them comes from.

But one thing SV has been enormously bad at is not realizing that they aren't feisty underdogs any more, they're the ruling class, and they often have tremendous economic power over people. When people depend on you for their livelihood, or for transportation or housing or similar, then you actually do owe them transparency and an explanation of what's going on.

Could they have done better? Yes. If they wanted to.

Could they have "warned" both parties of the legal regs? Yes again. None the less, I suspect this was also in the T&Cs.

Whatever the case might be, Upwork is in the matchmaker business - not the relationship business. It's not an agency. It's an escrow of sorts in a fancy wrapper. The less legal exposure - including legal "advice" about what's been happening between the service-needer and the freelancer - is probably, truth be told, what they seek to maintain. It is, after all, not their job / role to do that.

Long to short, Upwork could have done better, but so could the other two parties using Upwork.

p.s. All both sides needed to do was open an account on another "escrow" site and then split the work between the two. The escrows wouldn't know. But of course, the IRS might.

That definitely sounds like a very plausible explanation.

But Upwork still handled it very poorly. They communicated nothing to the contractor, and they told the employer that the only option whatsoever to deal with this contractor at all was to use some expensive "Wework Payroll" service.

That's ridiculous. Absolutely nothing about the situation requires that service. Essentially, Wework was taking over the relationship and then acting as his exclusive agent while making decisions that were against his interests. But you can't have it both ways like that (own the relationship while acting against the client's best interests).

They should have been upfront: "Hey, he's worked for you enough that he has to become, legally, an employee; we can't keep billing you through the Wework platform like before. [give possible workarounds]." And copy the contractor on the email.

Still a stupid law, but they could have handled it much better.

Yes, it is plausible that there is a potential regulatory issue.

Even if it is the key issue, that in no way excuses this horrible treatment, or passing it off as a mere "communication should have been clearer".

Complete, absolute failure to contact the worker using your platform in any way?!?

Nope, absolutely unacceptable.

All UpWork needed to do was to say something like "This work profile, with many projects on a single employer is passing the threshold of 1099 vs W-2 employment, and as such we cannot continue supporting this hiring/working pairing as a freelance intermediary due to regulatory issues. BTW, we have a W2 Payroll solution that you can sign up for immediately to solve this problem. More details here...".

The fact that UpWork did no such thing indicates clearly to me that they are not in fact concerned about regulatory issues, but merely using them as an excuse to upsell, while trying to lock-in their worker base by keeping them in the dark. IOW, completely unethical practice.

As a biz owner currently using freelancers on several platforms, Upwork just got crossed off my list (just as I'll never intentionally use Uber).

The time frame isn't completely explicit in Wallace's account, but the references to discovering it "this week" and spending "all day" Thursday-before-2pm getting to the bottom of it could indicate a timeframe as short as:

(1) Wednesday PM, Wallace finishes "several assignments" for this one client, marking them done in the system - and that on top of the other "dozens" of jobs he's done for them in the last few weeks, including "rush" jobs, flips his account into the "compliance concern" status which hides him from that one client.

(2) Thursday AM, friend at agency says, "hey, we can't seem to hire you for more gigs"; Wallace says, "that seems wrong, ask Upwork"; agency quickly responds, "they can't explain, ask on your end".

(3) Wallace finally reaches someone at Upwork after lunch Thursday PM, getting the unsatisfying explanation, then posting his angry tweetstorm 2:21PM Thursday/8th.

Taking a day or two to explain an exceptional situation, or perhaps a situation that's part of a brand-new policy adopted under legal pressure, is not necessarily an awful failure.

We don't really know if there might have been other explanations that would have come a few hours later, or that he missed somehow.

It's even possible the status of his account was some short-term temporary "gray out" status, that nudges freelancers/buyers to diversify their counterparties, and that this gray-out status almost always results in a "cure" quickly with no explicit communication required.

I would prefer explicit transparency in such situations... but could also understand why the company might be a little coy about directly coaching freelancers. (If they get that coaching even just a little wrong, according to some later interpretation of the contractor rules, it could wind up being used as additional evidence against them.)

If they are anything but completely stupid (admittedly, not unheard-of for startup jockeys), they have competent legal counsel, who can explicitly draw the boundaries for them and write the appropriate notices.

Relying on some kind of quasi-plausible timing/delay issue, as does the parent comment, it's even less of an excuse.

The more I see, the more clear it is that Upwork are

If they were going to give proper notice of what they were doing, they should have done so simultaneously with shutting off service. If not, they're also wrong.

It really has narrowed down to two choices:

1) Upwork are completely incompetent to even perform their primary functions

2) Upwork are playing a very unethical game.

Either way, they are not qualified to operate their business, and shouldn't be hired from either side.

The contractor/employee "boundaries" are somewhat fuzzy, and subject to later (re-)interpretation. You might think you're safe, but then lose a regulatory/court case later! They might have to look at things case-by-case once a certain risk threshold is met.

As far as we can tell, he learned the details from Upwork within 12-48 hours of when the issue was discovered. That's not so bad!

He wasn't prevented from appearing to other buyers during that period – just the single buyer with whom repeated jobs jeopardized his independent contractor status.

Tempest in a teapot. Wallace's anger at the communication is legitimate, but he's likely misinterpreting the root causes, and the downstream demonization of Upwork is out-of-proportion with the particulars.

Much irrelevant hand-waving.

Legal issues are always somewhat 'fuzzy' and subject to judgement -- it's why we have judges. And this is not that fuzzy, the IRS has published clear standards for decades and it's well litigated. Nothing about that prevents a company from defining the boundaries of it's behavior and communicating clearly & behaving ethically.

Timing is utterly irrelevant here. The ONLY reason he found out is that he had the good luck to have a well-placed friend who could see the issue AND had a communication side-channel. Absent that luck, he'd be permanently screwed.

We've got no data on what other customers were able to buy or not, and it is also irrelevant -- particularly for a contractor primarily occupied with a single buyer, who would not have tuned his marketing to the broader market, and due to Upwork's unethical behavior would have no notice that he needed to.

"...in a teapot"? BS! A scaled business like this is a large system, and this is an example of how the system works, and limits the range of possible root causes.

In Upwork's case, it is either one of two things.

1) A sloppy mess of incompetence and make-it-up-as-you-go-along supported by ill-invested venture funds. Or,

2) A management that has specifically decided to implement a system of unethical behaviors in hopes of extracting higher profits regardless of the cost to it's users.

Either way, they are either unqualified to be in biz, or unqualified for anyone to do biz with.

I'm left wondering why you are such an eager and persistent apologist for this behavior, grasping any straw to excuse it . . .

I'd buy this hook-line-and-sinker (especially since I've lived it as a developer) except for the fact that the author stated they hadn't even been contracted 2 months yet when this issue came up.

There's no way in even 2 whole months that this would trigger any sort of action, as far as I am aware.

Then Upwork need to communicate that. And not in a "we will call you privately" manner, but:

- Making a public statement regarding specific case with Michael. Especially why they decided to go behind his back to communicate with his agency.

- Making a public disclosure of reasons they acted so ignorantly toward freelancer.

People could and will leave Upwork if they're going to keep this absurdly behavior.

The only thing that spread faster than California fire is public opinion in a Twitter age.

Have you read the whole thread? According to MW Upwork even said they have no real limit it's just guesswork and apparently the laws also don't have any tangible limits (bu t that's not really an argument, I agree).


That's bull in a China shop levels of clumsy. And that's the best case

I concur. Some companies (look at ridesharing) have been fast and loose with these rules. Others go stricter towards both the spirit and letter of the law. And may times companies go through agencies (and Upwork) to avoid converting people. This isn’t a commentary of the justness of the laws - just that they exist. (The urban legend is they were founded over a MSFT janitor losing out on an IPO windfall.)

In this case, I suspect the client is aware of the constraints which is why they insist on having a middleman.

There are two sides to the morality of this, but I’m not sure Upwork is guilty of anything other than crappy communication. (All staffing agencies profit on the conversion)

Then why didn't they "just" say so when pressed multiple times about it?

They ultimately did, and it seems like it may not have taken more than a day or half-day for him to get his (ultimately unsatisfying) answer.

Sometimes handling exceptional situations takes a day!

If many Upworkers are hitting this, then more automation and coverage in public FAQs would be appropriate. But if very few are, or it's a new policy that's fluid and involves case-by-case review, then maybe a day or two clarity is fine for now, even though it caused anger in this one case.

Wallace wasn't blocked from all work: just that one buyer, where Upwork's expertise – expertise that Upwork's customers are paying for, to cover their legal risks – flagged a potential "contractor rules" compliance problem.

I didn't see anything in the tweetstorm indicating that this only took a day for Mr. Wallace. Do you have a link to where you got that impression?

OK, but explain why they didn't tell the freelancer this?

They did – just not as fast or as clearly as they ideally would have.

See my other post on the vagueness of Wallace's time-frame: he might have even gotten the answer less than 24 hours after his account entered this "no more work with this client" status.

I'd share his frustration that it wasn't instant and automatic at the moment he was "shadow-blocked" from his primary buyer's interface, but I also understand that legal-compliance exceptions sometimes take a day (or a few!) to be fully investigated/explained/etc. Maybe there's a human-in-the-loop at Upwork who does a case-by-case review, when an bilateral-relationship hits these might-be-an-employee danger-triggers – and his rapid discovery, same-day inquiry, and rant outraced another process.

That would be absolutely illegal. The guy is a company, there is absolutely no regulatory requirements to convert companies into full time employees. Most of that comes from lawsuit fears not regulatory action.

I didn't see anything in the tweetstorm indicating that Mr. Wallace has incorporated. Do you have a link to where you got that impression?

(If Mr. Wallace has his own corporation, that might provide some extra cover, but that also might be a rare/expensive enough situation that even Upwork can't pay Wallace Inc., but has to pay Wallace-individual. In fact, there's an answer at Upwork's support forum suggesting that a corporation can't sign up as a freelancer: https://community.upwork.com/t5/Freelancers/Company-account/...)

Its the same in Germany. In a misguided attempt to protect workers, they made life much more difficult for freelancers. Some say this was intentionally done to reduce the number of freelancers, because those are not forced to participate in the social systems, which is financially advantageous.

You come from wrong end with the 'misguided' assumption.

There is loads more people who fear loosing their job than entrepreneurial freelancers. There is load more minimal wage workers which would be abused.

I totally agree that a certain sector of workers needs more protection, not less. But if they really wanted to protect the working poor, they would stop labor leasing and raise the minimum wage. That this goes on as it is currently is outrageous.

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.


Yes very likely they're trying to mitigate against what is sometimes known as "co-employment risk".

Basically different types of companies have different legal requirements in terms of taxation, retirals and benefits. In the legal system of two countries I am familiar with larger companies have a higher burden than smaller firms.

In this scenario, a large company could theoretically reduce their costs by contracting a number of their workers as employees of smaller firms and masquerading as if they didn't have lots of employees. However it's still the management of the larger company which is supervising the work and therefore effectively committing fraud.

In situations I have worked with, there are a bunch of restrictions in what can be contracted out like this and what can't... Also how long can you have the contracted person working for the company - because if the work is person dependent, you should have hired the person directly.

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.

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

This is likely much closer to the correct answer. I do grant writing for nonprofit and public agencies and some businesses (see http://www.seliger.com/blog if you're curious), and we sometimes need to sign forms that say we're independent contractors, not employees.

There are complicated rules for determining who counts as an employee and who doesn't. Microsoft famously lost (or "settled?") a lawsuit around this issue: https://corporate.findlaw.com/human-resources/employee-or-in.... I don't know the details of the case and found this piece via DuckDuckGo, so others may know more about it than I do.

In short, some kind of tax / regulatory issues may lie at the bottom of this case, and the comment above should be near the top of the HN heap.

Edit to add that, of course, this is no excuse for the company not explaining what's going on.

Remember that in the US, as an employee/contractor you can sign whatever you want saying you are/are not a contractor and it’s completely worthless.

The government decides how you’re classified, not you.

I'm not sure what "perks" there are from being classified as a 1099 contractor from the contractor's POV. The government is generally interested in people being W2 because then the company is obligated to withhold taxes, which makes the government much more likely to be paid as opposed to relying on individuals to pay their "self-employment tax", i.e., the portion of payroll tax that the company would bear if the individual were classified as W2.

Since this simplifies the individual's tax paperwork and transfers some of that burden to the employer, this can frequently be framed as some kind of "fighting for the little guy" thing, but it's really just about the government getting paid more reliably.

There’s more tax flexibility as a 1099 freelancer and if you have previous work expenses for the year it can offset any income. For example, if you bought a $2k laptop to work with $2k of 1099 income can be offset by the purchase so you pay no state, federal, or payroll taxes. If you are w2 then you can only deduct the amount that exceeds 2% of annual gross income.

Typically w2 is better for the employee. But if you are planning to do a lot of work then getting a 1099 under your LLC or S or C Corp can work out better for a sole owner.

I suspect the US does it differently, since with IR35 you can determine where you fall by reading the particulars of the contract.

Having only one client for over a year or so, in IR35, isn’t necessarily an immediate indicator that you’re an employee masquerading as a contractor.

Upwork’s algorithm seems to use that as the primary metric.

that was my impression too.

except that the issue in some countries is not cracking down on fake freelancers, but on companies who avoid taxes by treating their employees as contractors, to the point that these contractors can sue their employers to receive full employment.

upwork for sure didn't communicate very well in this case, so there is still cause for compleint, but only about how they handled this case, and not why.

greetings, eMBee.

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)

The problem here seems to be twofold: ambiguous policies, and little care for transparency and communication.

On the policies side: Upwork doesn't seem to have real written rules in place on at what point too many jobs for one company puts them at risk of violating the CA freelancer law. This makes it easy for a person to inadvertently place their livelihood at risk by doing what Upwork would otherwise be encouraging them to do -- more business through Upwork.

On the transparency side: Once someone breaches this invisible line, Upwork doesn't feel the need to communicate it to anyone. That would be expensive, and it seems to cut against Upwork's interests, so the wire is tripped silently and the party on either side of the transaction basically goes mad with confusion while they try to figure out what happened, until they finally exhaust themselves and give up.

Each of these is inexcusable and absolutely needs to be civil offense. The stories of people silently and irreversibly shut down by impenetrable platforms and then not able to even reach a human who can explain what went wrong are legion with internet-based services. Now that those services form the basis of a large swath of working people's livelihoods, this absolutely needs to end. Part of the cost of doing business should be clear rules and clear lines of communication when the rules need to be enforced, and an appeals process staffed by humans, or else these companies should be forced to pay out for lost income.

In some cases these platforms are market response to regulations already in place, like in Finland where I live freelancers use a billing service which basically employs them for the duration of their freelance work, because it's easier and sometimes even cheaper than forming your own company and working with the clients directly. So in those cases, it would be preferable to work on the regulation that created the first problem, not to add more regulation to solve a problem that was created by the market reaction. But having said that, there should be sensible regulation that protects individuals against bad business practices and abusive corporations for sure.

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.

See comments above from ~hughjd, ~jseliger, and myself: there's a good chance that it's regulation itself that created this particular kafka-esque situation.

State tax/regulatory authorities disfavor contractor relationships, even when clear-eyed counterparties prefer it.

That's probably why the buyer does all their contracting through Upwork – it's a bigger risk to do it any other way – and also why Upwork has certain patterns-of-intense-work they must either block, or convert to the government's preferred payroll-relationship.

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.

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.

> 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.

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.

your comment does sound a bit snarky though. you might want to elaborate how you see the benefit of regulations and their discussion.

greetings, eMBee.

I do see how my comment was snarky, thanks for pointing that out. Also in many ways it's off-topic. Your clear headed response helped me see that.

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.

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


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!

> Keep contact with potential clients inside Upwork.

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

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.

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.

Here's an alternative UI for this conversation https://treeverse.app/view/FFBtBwxG

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

Nice project!

Being able to see the tree of comments is one of the reasons I like HN and Reddit more than other sites.

It's weird at first, but then it makes a lot more sense than classic linear forum threads, Twitter, or Facebook.

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

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)

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.

This is great. Feature request: show the comment when the user hovers over the tree node.

While interesting it doesn't really help to read the conversation since it just shows a tree of profile pictures with zero content.

When you hover over a node it reveals the conversation until that point. (If that doesn't work for you, can you tell me which browser you are using?)

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.

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.

> 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.

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-... 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?

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.

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

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.

Most people I talk to who ask me about Upwork are the types who are just starting out and don’t have any connections. I too started on upwork and while certainly not a large sum, my first year offering design services I made 50k. I know this is a laughable sum by most salary standards for people who typically browse HN, but it’s nothing to be a shamed of for someone who went from unemployment to some sort of income on his own accord.

I know of many freelancers who typically do between 40-50k on upwork plus other projects outside the platform. Personally, I have moved into consulting and do not rely on upwork. While still not a lot of money by standards here, I’m on track to 100k this year. I think the huge benefit is that I don’t have to deal with a lot of stress that comes with employment or nonsense the kind that the author talks about with upwork. Consider that platform your path to a sustainable freelance or consulting career. Gotta put in the grunt hours to move up. Of course there are many exemptions if you are in the right circumstances.

I started looking for remote software development work in March of this year. Due to being in school part-time I couldn't take a full-time gig. And I interviewed with three consulting firms that all wanted me to commit to over 30 hours a week.

Upwork turned out to be a good solution for me. It took about three weeks of searching through Upwork job posts until I found a good fit. There were a lot uninteresting job postings to wade through. And being new to the platform (without any history or earnings) probably made landing a job more difficult.

But I finally found a great client who allows for flexible hours at a pretty good hourly rate. Most of our team was found via Upwork and with only one exception everyone has worked out well.

The Upwork screenshot/work monitor software is definitely intrusive but I feel that's the cost of earning trust in an environment where clients and providers don't necessarily know one another.

Now that I've earned over $10k working for this client, Upwork is "only" taking 5% of my rate. However I feel this is quite fair given the platform they provide. Anyway a body shop would be taking a much bigger cut. I'm also building up a history within Upwork and future gigs should be easier to land.

Just as with other trust-based systems like Airbnb, the longer I'm on Upwork and the higher my reputation & earnings become, the more I'm incentivized to keep using it.

What are other ways to find gigs? I'm a sysadmin (on the devops side) and don't know of any other ways to get your foot in through the door to get a few side jobs.

Toptal is too much for scoring some beer money, Upwork may be too cheap and unreliable but I'm not sure sysadmins have a better way of finding clients.

Network with people directly via physical world and web meetings. It requires some time and monetary investment (building relationships and traveling to conferences), but once you have build a network of even 4 or 5 people who value your skills out of which at least one is offering you a gig, you are all set. You can now use this network to vouch for your skills, ethics, and expertise to get more gigs.

Sure, Upwork is much easier than this but with this ease comes this huge risk of your livelihood disappearing into thin air at the whims and fancies of Upwork.

Well in this case:

"A marketing company that wanted to work with me only hires freelance writers through @Upwork. So I signed up. I wasn't thrilled about it, but that's who they contract with and it's their marketing company." - the second tweet in the linked series of tweet

Because there are not many options for people living outside of the richest countries.

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.

Obviously because they value his work so much.

Maybe because your 'client' is another freelancer billing (much more than they will pay to you) to a third part (aka 'The real client'), for the work that you did. I'm just speculating, but I wouldn't be surprised by something like this.

if you have dozens of contractors, dealing with only one company for payment for example makes things a lot easier...

greetings, eMBee.

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.

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.

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.

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. ...

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.

> So, in part he's complaining about not getting the protections that a full-timer does

Protections from who? Upwork? They are the one he needs protection from according to his story thread. They are the ones who are preventing him from earning his money by telling his client that they can’t Horne him anymore

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.

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

This all seems like the fault of the marketing company forcing the OP to go through Upwork in the first place. But Upwork should be up-front about this from day 1.

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.

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.


> [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.

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.


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

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)

That's precisely why these full-time situations should be avoided when working as a freelancer. Freelancing is a type of self-employment. Hiring someone full-time for an extended period of time is not.

Hiring freelancers just to save social security costs or to avoid labour laws is unethical at best and in many jurisdictions downright illegal.

Setting up a payroll system to make this look good on paper is quite a dodgy move.

This is remotely possible, but does not explain the malfeasance in communications toward both parties that relied on Upwork.

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.

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.

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)

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?

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.

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.

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.

Working directly with freelancers. Middlemen such as Upwork charge a markup for little to no benefit.

I've heard from a friend that Gigster is quite good. He's a freelancer so I don't have the client perspective.

mondo.com is recommended in the Twitter thread

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

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

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?

"'Bout 50% of the human race is middlemen, and they don't take kindly to being eliminated. This quadrant, we play nice. Got enemies enough as it is." - Malcolm Reynolds

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.

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.

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)

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.

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.

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

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.

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

This is a big issue with gigwork, major underpayment for services leading to non-livable wages for workers. This is about the level, too, pennies for dollars.

I just learned about the law change, and I think it's driven in part by the low wages of Uber drivers and a recent lawsuit there.

Great, you built a unicorn on the broken backs of low wage earners, structured the unicorn to avoid your share of infrastructure taxes (social security, workmans comp, road use taxes), but could you have done it with a less destructive wage structure? Probably. The laws have to catch up.

My comment was more of a mockery of the type of gigs you find on upwork. I have and currently outsource dev work for livable wages usually running into thousands of dollars.

You offered to pay very little - Increase your budget to get replies.

Sounds like you got lucky.

You still have your $200 and don't have a pile of poo posing as a web app.

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