The end of work as we know it

By John Kador, InfoWorld |  Career

JOBLESS, BUT NOT WORKLESS, is the wave of the future, says James R. Ziegler. As
executive director of the Pleasant Valley, Calif.-based Professional Association of
Contract Employees (PACE), Ziegler is onto something. The Internet economy may finally
put to sleep an Industrial Age dinosaur: the permanent job. Recent dot-com downsizings
in the wake of the Wall Street meltdown demonstrate that the term permanent position is
an illusion. All jobs, whether by design or not, are temporary.

If permanent is no longer so, then does impermanent describe the state of IT work
today? Possibly, experts say. The fastest-growing labor classification in the IT
industry is the so-called contingent workforce: the army of free-lancers, consultants,
contractors, free agents, and part-timers who fill the trenches, at least occasionally
and very often regularly, in virtually every high-tech enterprise. "The temporary
worker market has become the primary means of hiring for much of the technology and
support job categories," says Peter Yessne, publisher of the Staffing Industry Report
newsletter.

Permanent or Temporary? The 1099 Rule

-- John Kador

Independent contractors are often referred to as 1099 employees, after Internal Revenue Service provisions defining such workers. Using 1099 employees alleviates the company's burden to withhold and pay federal income tax, state income tax, and FCIA from the contractor's pay. It then becomes the contractor's responsibility to pay these taxes.

The IRS imposes severe consequences such as fines, penalties, and payment of back taxes, for both employers and employees determined to be in violation of the payment regulations.

The IRS devised a 20-point test to differentiate between contractors and in-house employees in order to prevent the use of 1099 status to abuse the tax system. In general, the more workers direct their own work, use their own tools, and work at their own convenience, the more likely these workers are independent contractors, or 1099 workers.

To be on safe ground, an employer needs to be able to answer "no" to all 20 0f these questions.

1. Is instruction given to the person as to when, where and how work is performed?

2. Did you train the person to perform services in a particular manner?

3. Is the person required to perform the work personally?

4. Is the person prohibited from hiring, supervising and paying assistants?

5. Does the person perform regular and continuous services for you?

6. Do you set the hours of work for the person?

7. Are services on a substantially full-time basis to your company?

8. Is the work performed on your premises?

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