alt.lawyers

Straydog wrote:
>
> On Fri, 24 Aug 2007, mm wrote:
>
>> On Thu, 23 Aug 2007 07:35:59 -0400, Roy wrote:
>>
>>> ZalekBloom@ wrote:
>>>> ...
>>>> He suspect that UBS knew that his job will be outsourced,
>>>> but they hire him as employee, because it cheaper then hiring
>>>> consultants.
>>>> ...
>>> Exactly the opposite is true. It costs more to hire an employee than a
>>> contractor. The employer has to pay unemployment insurance, disability,
>>> benefits, employment taxes, etc.
>> The contracted company has to pay all these things to its employees.
>
> Not necessarily. If the worker can be classified as an "independent
> contractor" (and the IRS has specific tests for this), then, no, the
> worker does not have to get any of that stuff.
>
> There is even a book on this from Nolo Press (run by a bunch of lawyers)
> and I read that book.

I think you and mm are referring to two different things.

I read mm's post as:

Company A hires an employee. They have to pay employee $X in wages and
also provide $Y in benefits to employee (where some part of $Y goes
directly to the employee in the form of vacation, etc. and some part
goes to 3rd-parties in the form of taxes, insurance, etc.)

Company B contracts with another company C and company C has employees.
Company B has to pay company C $X plus $Y (plus $Z so that they can make
a profit as well.)

So company B is actually paying MORE than A (but might save some on
recruitment costs, training, etc.)

What you're referring to is Company B contracting directly with
individual I and paying I $X plus $Y (the total paid might be actually
more or less than $X plus $Y.)