Robin's Ruminations

Word continues to reach me of L&I audits of companies around the state.  The real assault is on the use of independent contractors (IC's).  As I've mentioned previously, the state is fundamentally opposed to the IC business model and they're making every effort to stamp it out.

A major problem comes from our side of the fence.  Many companies have set up their IC arrangements with little regard to the tax laws and see it simply as a "cheap" way of doing business.  That said, there are also companies who have paid attention to the rules and have made the proper arrangements and are still being told their IC's are actually employees.  From where I sit it looks like L&I is being arbitrary and capricious in their application of the 6 part test to our industry.

I see three courses of action.

1 - Everyone in the state move to the employer/employee model.  For multiple reasons this won't work.

2 - The industry leaders band together and appeal unfavorable audit outcomes.    Larger companies will need to foot much of the bill but there is nothing wrong with this since they have the most to lose.

3 - We convince the state that process servers are part of a unique industry.  This is not unknown.  In the late 1990's the servers in California were able to accomplish this very thing.  But, as with option #2, this will require our industry leaders to come together and work towards a common goal.

For the long term health of the process serving industry I see option #3 as the most useful and with the greatest possibility of success.  In my view, the most important aspect of option #3 is that it will resolve the issue for once and for all.  This must be an industry wide effort.  It won't be inexpensive and it won't solve everyone's current problems because some have simply been operating to far outside the rules.  It will require various companies, who in some cases may be competitors, to work together.

There is no guarantee we will succeed if we work together but, if we don't unite, we will surely fail separately.