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Rising Star
Yes, think it would be illegal in US/NY. I wonder though… if either the HR rep or the freelancer misunderstood something they were told.
Perhaps the HR rep meant those hours would not be billed to a client vs not be paid to employee?
If they hired you to work a standard (40 hr week, so to speak), all the time is billable. The freelancer get paid those 40 hours.
Whether the assignment is a billable client job or non-billable agency work, (pitches, case studies), is important, but different.
If I’m going to be available 40 hrs a week for a company, it means I can’t be free for other work. If anyone is hiring for anything, the assumption is there is work that needs to be done. If the agency scopes incorrectly that’s on them and they can cover it themselves, but the freelancer still gets paid.
Hey! Oooo. Is this illegal?
Hey! Oooo. It feels illegal.
The freelancer should read their freelance/indep contractor agreement before they take any further action. Also, it sounds like the agency has misclassified this employee. Should be a temporary employee paid via payroll. That is a big issue for the agency in addition to what would appear to be secondary issue to how the “temp employee” is being paid or not.
They know what they’re doing and they don’t care. Especially holding companies.
You’re being paid for your time. All of it. Time you’re standing by. Time you can’t use on another agency or client. This includes time. You should be paid. Period.
It’s time to name the agency so we can collectively tell them that delete that “job” number
This agency is part of a storied agency network and is under one of the big global holding companies. This agency is so well-known it’s insane that they still had the guts to classify an obvious temp employee as a vendor.
To avoid any retaliation to the freelancer, I am going to not say the agency name … for now. As soon as the gig is over, I am putting the agency on blast.
If hr told you to do this, I would look up the laws and cite them back to them/consult a lawyer.
They are not only breaking labor laws but also taxation laws.
There’s a new proposed law in the works that jacks up the penalties to $1,000–$5,000 per day per worker.
https://millershah.com/blog/new-york-misclassification-bill/
Rising Star
It certainly SHOULD be illegal
I made a mistake in the original post. It’s not a W-4 freelancer, the agency classified them as an I-9 (1099) freelancer.
Still, this makes it worse, because now it’s a tax-dodging issue as well as a labor issue, because the agency is falsely claiming the freelancer is a vendor in order to avoid payroll taxes.
In New York, if you are a freelancer, you’re either an employee (albeit a very temporary one) or a vendor. There’s criteria to qualify for a vendor, and the biggest one is that a vendor does NOT report to a boss/supervisor. In agency land, a temp employee is like a freelancer you hire to cover for a fulltimer’s parental leave. A vendor is someone like a photographer or freelance editor who does a set amount of work and just bills for the hours worked.
More details about the freelancer referenced in my original post:
• The freelancer is covering for a fulltimer.
• The freelancer reports to a supervisor.
• The freelancer is expected to be available 8 hours a day, Monday–Friday.
• The agency gave the freelancer a company laptop and activated a company email for them.
• Emails are expected to be read and responded to on the company laptop during the allotted 8 hours.
This is what the HR person said (job codes redacted to anonymize the agency). Note that item 1 uses the word “employee” and item 3 admits there’s a supervisor.
“Timesheet Entry
“Record all hours exactly as they are worked. Enter the accurate amount of time on your timesheet for the correct date and assign it to the proper job number and activity/task code. You are legally accountable for the accuracy of all time reported.
“Use the following instructions to ensure proper time submission.
“1. Freelance (temporary) employees are paid only for time spent on billable client assignments or pitch-related work.
“2. All time must be submitted by Monday at 10:00 a.m. Late entries may cause delays in payment processing.
“3. Job numbers will be assigned by your supervisor or the individual who assigns your work. Your standard daily activity code is [11100].
“4. To successfully submit your timesheet to payroll, each day must include a combination of billable/pitch hours and did-not-work hours totaling 8 hours.
“5. Any hours not worked should be recorded under job number [88880] with activity code [99990] (No Work).”
I don’t see how being on a 1099 makes it worse. I loved being on 1099s as a freelancer, especially with my LLC. Besides, freelance or not, everyone is essentially employed at will.
Is this person new to freelance and nervous about the language?
Unless I’m missing something, you bill them at least 40 hours, because, as others have said, that’s what you’re booked for. And if you waited around a couple hours, throw those on the non-billable. And if you worked over 40, log them, even if you’re not an hourly employee, because it gets them paid and shuts them up.