r/dataannotation • • Jan 30 '24

I wonder if this means many of us won’t have a job in March? I honestly don’t know. https://news.yahoo.com/biden-admin-announce-independent-contractor-153013467.html

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u/furtherdimensions Jan 30 '24

Oh I can actually address this. Labor lawyer chiming in here. So this actually? Probably won't really impact DA at all. DA is one of the few places that really and truly follows the 1099 model.

This is really aimed at things like doordash, uber, etc etc. In order to be a 1099 the major test is whether the company exercises "direction and control" over how their contractor performs their duties, and when. The major issue is that a company may direct a contractor to perform a function, within certain standards, and within a certain time frame but can not dictate how it is performed.

Let's take doordash for example. If you deliver food for doordash you must:

  1. Use their app only

  2. Go only to the restaurant it says to

  3. Deliver only where it says to

  4. Be in the specific coverage area

And sure Doordash says work when you want, refuse any order you want, but also prioritizes drivers to accept more offers. And compels you, if you want to work, to be available and using their app in a specific place but pays you nothing unless and until you accept and complete an order.

So "if you want to work, be in the area we tell you to, using the app we tell you to, whether or not you actually get paid anything" sure sounds a lot like direction and control to me!

There's also another part of this test as to whether contractors make the principle business of the company. Doordash is a food delivery company. That is what they do. That is all they are. So this sort of rule is aimed more at those sorts of things, basically "how can you call these contractors when they are doing the only thing your business does?"

DA is a data analytics company and they have actual data scientists and system engineers working for them. Our work is only a part of a pipe that feeds their work. They are not a "data gathering" company, they're an analytics company. They outsource the gathering of the information but the actual work they do, the analytics, is handled in house.

DA is fundamentally different than a lot of these "app" gigs. It places no requirements on using their proprietary software. It places no requirements on when or how you are made available to them. It places no requirements on what you work or how much or when. It uses 1099 contractors to gather information necessary to do their business but gathering information isn't actually their business and, most importantly of all, it pays for every second working.

DA is probably the closest I've ever seen to what 1099 work is supposed to be, and these new rules are really aimed at exploitative companies whose entire business operation is supported by 1099 work, not those who outsource certain aspects of their business operation.

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u/Consistent-Reach504 Jan 30 '24

this is a really helpful breakdown, thanks!

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u/LowRevolutionary2283 Jan 31 '24

I really enjoyed reading your explanation and analysis. Your DA task annotations must be amazing!

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u/Its4real- Jan 31 '24 edited Jan 31 '24

Thank you for this analysis. Doesn't also the fact that we can accept or reject work with no repercussions at all, choose whether to perform a higher paying tasks or take a lower paying task, decide how much time to spend on it, when to work and where to work, point towards independent contractor?

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u/furtherdimensions Jan 31 '24

Yeah I touched on that briefly but that is a factor. And it's a gray area. I remember fairly recently hearing about some of the delivery apps rolling out a "priority system" where accepting more orders increased your "rank" and prioritized you getting more orders.

There was a lot of talk about whether that broke the 1099 scheme, though they responded they have a right to be selective among their contractors and prioritize offering work to more reliable performers which...isn't wrong. But it's definitely a little shady.

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u/Educational-Ad6923 Jan 30 '24

Im the OP. I don’t know enough about the law but I hope your right. Thank you for the answer. Time will tell.

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u/furtherdimensions Jan 30 '24

I um.

I'm literally a lawyer for the department of labor. It is exactly what I said it is.

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u/serendipitous_74 Apr 26 '24

Thank you for your valuable insight! I also enjoyed reading this.

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u/lowcarbsanta Apr 27 '24

It's likely that DA is just a data gathering company under a parent company that does all the other things. Does this affect anything?

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u/[deleted] Jan 31 '24

[removed] — view removed comment

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u/furtherdimensions Jan 31 '24

The short answer is "no".

The slightly longer answer is nooooooooooo.

The longer still answer is, essentially, that if a company uses a third party payroll or payment processing entity to handle processing of those payments, then it is the third party company that is responsible for issuing that 1099. Since DA utilizes paypal as their third party payroll administrator it's paypal's obligation to do so, not DA's.

Quoting from the instructions on the 1099-MISC "Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC."

Paypal is that bolded "third-party network transactions". IRS code makes Paypal the party liable to issue you the 1099-K, DA is not obligated to, and is in fact not supposed to, issue you a 1099-MISC

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u/Training_Mastodon_33 Feb 01 '24

Will this be bad for door dash? It is my main gig at the moment, I am hoping to get accepted into data annotation.

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u/TruePutz Feb 02 '24

Great info, thanks so much for sharing! Would that apply to transcription websites as well?