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According to my question and discussion moved here: https://clojurians.slack.com/archives/C05006WDW/p1546794206026900
Continue of discussion: What is the difference for them between employees vs contractors? In Poland we prefer contractors over employees heh
US companies prefer the opposite. There are pros and cons to both. I'm not surprised there are countries where many companies have a different preference.
I am asking mainly, because like 80% remote Clojure(Script) jobs is US only. So if I could understand why is that, maybe I could explain HR I am solo proprietorship not individual so it is fine. But maybe it is not fine anyway 🙂
Sole proprietor doesn't help a company that wants to hire an employee rather than a contractor.
When I worked solo like that (for several years in England and several years in USA), only short term work was available and many companies could not extend contracts.
If someone is looking for a permanent employee, I as a contractor am not going to get too far
When I'm at my computer I can probably explain the US preference for employees over contractors 🙃
yeah, but it is very common to see “remote worker US only”. I think I see it more often then “remote UK only”.
Probably just the sheer volume of US jobs compared to UK jobs, in term of advertising?
I've seen a lot of "UK only" attached to the UK jobs posted here, to be honest. Most UK jobs don't even seem to support remote work at all.
Sure, I know. Just wanted to know why other countries don’t want solo proprietorship and they prefer employees. While it could sound silly, it is not obviously for me.
This is the part which I don’t understand. At least from my experience and mentality where I am and living.
With employees it is even more rules and guaranties demanded by law, which company have to fulfil.
Contractor might have to juggle different obligations, making them unstable. Also, especially for remote contractors, the management/communication overhead is much larger. With remote employees, the cost is amortized over time though.
assuming that contractor and FTE are receiving equivalent compensation, FTE’s are more dependent on the employer thus the power dynamic is skewed more towards the employer’s benefit
@orestis I have to agree and disagree. Just there are people who should be remote worker and people who shouldn’t heh 🙂 Office work is not more efficient in any way while you are hiring right people. At least I see it like that. I event don’t like to go office, because there is too many distraction and I can’t focus on high quality work.
@kwladyka I can only talk about UK, but there’s a dual problem of tax law and (a perception of) reliability.
In particular, for self-employed people, if you fulfil the criteria for being employed then you are an employee from the perspective of HMRC, and treating you as a contractor is tax-avoidance on the part of the company.
I don’t know HMRC, but I guess I don’t fulfil criteria of being employee in UK. Especially because I am in Poland, I have registered company as solo proprietorship etc. Am I right?
(Sole trader: https://www.gov.uk/set-up-sole-trader seems to count as self-employed. Setting up a limited company is a separate thing. I don’t remember exactly what the rules are in Poland, but if you have questions about translating company legal types from Poland to UK ping me separately 🙂 )
There was a crackdown on this type of tax avoidance after it got very popular in construction industry.
Now as to the perception of reliability, or rather unreliability, here is My Personal Impression (tm) taken second-hand from friends working as self-employed, running a limited company, working along contractors, and managing contractors (in CG industry, not programming.)
Firstly, whether you’re employed is very important because UK doesn’t have an identity card and so can’t do debtor registries in the same way Poland does. (This is by design, the British object to government being able to identify them, which blows my mind because it makes everything else really inconvenient.) Business decisions are made based on credit checks and credit scores. These are rather blunt instruments.
Normally to prove you really are yourself you need to have a “photo ID” with your name (proof of name) and two utility bills or bank account statements etc that came to you by mail to the address at which you claim to be living (proof of address)
(Sometimes more than one form of identification, if you want to do something more complicated like apply for a passport.)
Coincidentally, I've been trying to deal with that stuff as an ex-pat who has pensions in the UK -- and can't get at the money due to the UK's heavy restrictions on identity, banking, and fund transfers.
@kwladyka in norway there is a central id registry and everyone gets a "fødselsnummer" (birth number) - everything else hangs off of the fødselsnummer
hmm I though people in Norway use credit card as identity card. At least in practice.
they may do @kwladyka for day-to-day stuff - i can't remember if there's an actual identity-card, and a bank-card is tied to your fødselsnummer, the bank has gone to the trouble of checking, and they often have photos on too, so a bank-card would make a perfectly good id card
If you want to rent a flat, for example, you need to prove you can afford the rent. You do this by providing an employment contract with an appropriate salary. If you’re a contractor, you need to provide records from an accountant going 3 years back proving that you earned money regularly, otherwise you get treated as unemployed.
The impression I get (as an immigrant, though after over a decade of living here) is that things used to run on recommendation and reputation, and your reputation stems from who employs you, or indeed whether anyone employs you at all. For an example of this still being in use see Japan, where local people will not work for startups because the startups give them no social capital.
Interesting difference between countries. What you are describing sounds like for workers in UK it is better to be employee, then contractor. It is probably true.
…and also the contractors which I’ve (second-hand) observed sometimes were unreliable and basically disappeared halfway through the contract with no way to track them down.
Is it about contractors which have X GBP for doing job X or even for people who get month salary?
they were people hired for a specific project, but if they proved themselves, they went on an internal registry of regular partners who’d be contacted whenever there was a thing to be outsourced
ok if we are talking about get X GBP for job Y I believe in that. It is not good way to hire solo people I guess.
Yeah, the second case is not legally allowed. You’re an employee, you should get regular employee rights.
details at 'Working out if someone is self-employed' in https://www.gov.uk/employment-status/selfemployed-contractor
oh, yeah, and this: “their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish”
I don’t know UK law, but it is about making right agreement and it is legal then. At least in most of contracts which I saw. There are indeed differences and other responsibility.
Good example from Polish law, klauzule niedozwolone https://pl.wikipedia.org/wiki/Klauzula_(prawo)
Well I have 12 years of experience as solo proprietorship, maybe that is why I think like that 🙂
I understand but I am sure it is legal to make an agreement for UK company between company in PL. It has to be.
Exactly, so I guess it is perfectly fine to sign agreement between company in UK and solo proprietorship in PL.
Anyway: not a lawyer. Probably the best person to advise would be a good accountant from the locality you’re interested in, who has dealt with international contracts
(or a person in your situation, who has got the kind of contracts you’re interested in)
Which is not exactly 1:1 solo proprietorship, because like you said there is no 1:1 company comparing countries.
That’s why I’m saying get advice from a person qualified to advise about that; perhaps if they agreed to provide you with a PDF with a short explanation of what this looks like from their perspective, as well as sign the advice with their practice name or whatever, you would have a better base; just providing this to a potential employer who is then able to direct questions to that practice
Do you know is it the same about sole proprietorship in US like in UK? HR minds also fear to hire them?
Nope, I can’t tell you anything about US apart from: don’t ask about “US” as an entity, always check about the specific state.
In the US, when you decide to be a contractor, there are several ways you can set yourself up to engage with companies. Sole Proprietor is a thing that exists here, but as a contractor you're nearly always better off setting yourself up as an LLC (Limited Liability Company).
make sense, unfortunately I don’t know anybody like that, but it is good idea to find one 🙂
(from uk perspective I also think that having a limited company is better, but on the other hand it means more costs and paperwork, so some people defer it)
And, yeah, we have fifty states here, all with slightly different laws about employment, different income tax schemes, different employee protections, and so on.
@lady3janepl Not for that specific reason, no. You still have rights as an employee -- and an employer you have requirements -- even in an "at will" state (like California, where I am).
When a startup I was working at let go their entire engineering team with no notice, the startup still had to maintain their healthcare benefits for me (I switched to CalCOBRA -- a scheme for continuing coverage benefits after you've been let go).
Anyway my point is that tax and legal details differ between countries, sometimes by a lot, and oftentimes the differences are subtle enough that it’s just not worth it for the company to figure them out.
(Source: I work on a thing that is used to do credit checks among other things, but for companies, and I’ve done some cross-checks of corporate law across Europe.)
US is worse since they have federal law, and then every state has its own laws on top of that.
In UK it is good to be a contractor, but to be fully OK legally, you need to make sure you are actually a contractor (namely you work on projects for multiple employers, and not just one employer all the time.) Alternatively there are arrangements where an umbrella company pretends to be your “employer”.
If you wanted to work in UK as a contractor but still work from Poland, you’d probably get best results reputation-wise from registering with an umbrella company to “legitimise” yourself. (Note: I’m not a tax advisor, I’m not a lawyer, HMRC is not nice when it gets you with a banhammer.)
Sure, but while we are talking about contractors outside UK it shouldn’t be a case for a employer. Am I right?
I don’t know; I’m talking about perception: how to appear as a safe and risk-free option for the employer. People are risk-averse.
I see, there is a lof of differences about thinking around that topic depend on country.
Yup. It’s going to be different depending on country of company and country of employee, and sometimes even depending on personal experiences of the specific person you’re talking to. Being any kind of “irregular” person can be very frustrating this way so the best I can do is express sympathy of the been there, did not qualify for the tshirt kind 🙂
> People are risk-averse. this is probably the tldr 🙂 being a freelancer myself, I can see a few reasons why I could be not a stable bet vs. an individual positioned as an employee I'd say there's a basic tension: - international remote employees are supposed to be consultants with multiple clients, or a single client over a short timespan. Else there can be fines - but companies want people who are dedicated full-time and long-term I think having a couple "legacy" clients that give you sporadic work would help. I also heard it helps being a company owner, as opposed to a freelancer. Basically it reduces the potential perception of being a pseudo-employee. It kinda sucks that when all that you wanted is to work remotely, suddenly you may have to set up a company and juggle work. Personally I would see it as an opportunity to become a true consultant (as in expert / networker). On the USA topic, some time ago I decided to abstain from applying again for a few years. If/when the time comes I'll be both better positioned as a Clojure guy and will not mind doing a US trip for networking in person.
hmm as a contractor I am always dedicated to 1 company. It is how we are doing this in PL. Another interesting difference how people understand to be a “contractor”
In the UK/US, you can have just one client at a time but then you cannot stay with just one client long term -- otherwise the company will be required to treat you as an employee, i.e., full benefits and all sorts of other restrictions (from the company side, and possibly from yours too).
Similar in other countries, you can engage with 1 client but being careful of having true consultant terms (no fixed salary, no fixed schedule, limited supervision)
> I also heard it helps being a company owner, as opposed to a freelancer. Basically it reduces the potential perception of being a pseudo-employee. Very much true. This is also because as a company owner you are required to keep books, which generally means you hire an accountant, which is yet another form of “someone with reputation confirms you are not a rando”
> It kinda sucks that when all that you wanted is to work remotely Yeah that is all what I want
There’s also a tension in that countries politically do not want to have work outsourced to cheaper employees.
When I was a contractor in the UK (as sole prop), I always retained a tax accountant to do all my books. And while I was freelance in the US, I did too. You can do this stuff yourself but it can leave you open to legal risks if you get it wrong.
Right, but they know a lot more about what Inland Revenue will accept there (and IRS here).
Oh yeah, I agree with that. and they’re great sources of advice. I just found it funny when I discovered they’re not liable 😄
They’re not gonna care how much you’re paid, only that they don’t want work going to foreign workers 🙂 (See “Brexit”)
I have no issue about that. This also shouldn’t be concern for companies who are looking Clojure developers.
It's mostly a matter of tone in your posts -- but I suspect that may be something introduced in translation...
Your English is better than any of my second languages so I'm not going to criticize 🙂
I'm at a computer now (laptop, watching Great British Baking Show on Netflix), so I can try to give perspective on why US employers prefer employees over contractors as individuals...
I have this impression after our discussion, because of place where we are living we imagine different things by word “contractor” and have different experience about it. That explain a lot.
US companies tend to want to deal with individual contractors only via agencies -- since that reduces the number of individual differences: one or just a few contracts, at a business-to-business level, covered by standard US company law etc.
I am going to watch a movie with my wife. Once again thank you all for good discussion. I enjoyed to learn your points of view.