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Old 11th September 2019, 05:07 AM   #1
SuburbanTurkey
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California passes new bill reclassifying contractors as employees

California has passed a new bill that narrows the definition of who can be considered a contractor. This is seen as a response to the growing business model of the "gig" economy, in which companies heavily rely on contractors rather than employees as a means of reducing costs and responsibilities to their laborers.

https://slate.com/news-and-politics/...-employee.html
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Old 11th September 2019, 06:00 AM   #2
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Sounds like a good move.
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Old 11th September 2019, 06:05 AM   #3
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Exploitation always finds a way, I'm certain a new method is already being worked on.
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Old 11th September 2019, 06:06 AM   #4
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I'm sure this has set Republican hair on fire. They hate it when workers have rights and benefits.
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Old 11th September 2019, 06:26 AM   #5
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Originally Posted by TragicMonkey View Post
Exploitation always finds a way, I'm certain a new method is already being worked on.
At least it temporarily knocks these tech companies on their ass. The posture like they're some disruptive geniuses, but a large part of the business model is just stretching the contractor label to absurdity. Uber is going to have to treat their employees like employees in CA, so I call that a win.
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Old 11th September 2019, 06:30 AM   #6
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Originally Posted by TragicMonkey View Post
Exploitation always finds a way, I'm certain a new method is already being worked on.
I would not call contracting exploitation.
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Old 11th September 2019, 06:31 AM   #7
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Originally Posted by BobTheCoward View Post
I would not call contracting exploitation.
You wouldn't call anything anything.
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Old 11th September 2019, 06:47 AM   #8
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I can definitely see how this closes an exploitative loophole for supposedly "gig" based tech companies.

But as a small business owner I can see the risks and the other side.

I'm primarily a performer, and most of my work is done as a solo performer at libraries, school, festivals, museums etc.

I'm at a point where I'm working on expanding in ways that would involve more performers. Before I had my own company, I always worked as an independent contractor when working for others. And that's really the model that makes the most sense in my field. Performers get asked on a gig by gig basis their availability. You might work with a particular company a couple gigs a year.

Depending on how narrowly contractors are defined, this could change whether small entertainment companies can afford to exist.

And of course I'll agree that if a model of business is exploitative it doesn't have a right to necessarily exist. But for people in my field, I think the negatives would be far greater if these companies ceased to exist than continuing as things are.
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Old 11th September 2019, 06:54 AM   #9
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Originally Posted by JoeMorgue View Post
You wouldn't call anything anything.
Well played.
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Old 11th September 2019, 06:59 AM   #10
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My field is IT and companies, including the not-for-profit healthcare one I work for, have a nasty habit of laying off regular employees to replace them with contractors who do the same work for the same pay but without benefits. Tell me how a contractor doing the same work for five years is functionally different from a full-time employee.
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Old 11th September 2019, 07:01 AM   #11
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Originally Posted by Cavemonster View Post
I can definitely see how this closes an exploitative loophole for supposedly "gig" based tech companies.

But as a small business owner I can see the risks and the other side.

I'm primarily a performer, and most of my work is done as a solo performer at libraries, school, festivals, museums etc.

I'm at a point where I'm working on expanding in ways that would involve more performers. Before I had my own company, I always worked as an independent contractor when working for others. And that's really the model that makes the most sense in my field. Performers get asked on a gig by gig basis their availability. You might work with a particular company a couple gigs a year.

Depending on how narrowly contractors are defined, this could change whether small entertainment companies can afford to exist.

And of course I'll agree that if a model of business is exploitative it doesn't have a right to necessarily exist. But for people in my field, I think the negatives would be far greater if these companies ceased to exist than continuing as things are.
I think it's possible to move the line pretty far and still not run into a problem for true contract workers.

I'm guessing the other performers you work with could easily be classified as contract workers using various factors. You are likely not their sole employer, the nature of the work is irregular and often one-off engagements, they maintain a degree of creative control of their persona or performance, etc.

I don't think this is going to have any effect on the ability of Bobo the clown to contract with Johnny the juggler to work a gig together. Now, if Johnny the juggler becomes a cast member of a regular act run by Bobo, that would be different. True gigging is not in danger.
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Old 11th September 2019, 07:02 AM   #12
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Originally Posted by SuburbanTurkey View Post
California has passed a new bill that narrows the definition of who can be considered a contractor. This is seen as a response to the growing business model of the "gig" economy, in which companies heavily rely on contractors rather than employees as a means of reducing costs and responsibilities to their laborers.

https://slate.com/news-and-politics/...-employee.html
Sounds like a good idea. I'd rather avoid it but it just leads to exploitation. The WWE is notorious for that.
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Old 11th September 2019, 07:03 AM   #13
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Originally Posted by JoeMorgue View Post
You wouldn't call anything anything.
Oh, I wish we could nominate personal attacks.
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Old 11th September 2019, 07:03 AM   #14
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Originally Posted by TragicMonkey View Post
My field is IT and companies, including the not-for-profit healthcare one I work for, have a nasty habit of laying off regular employees to replace them with contractors who do the same work for the same pay but without benefits. Tell me how a contractor doing the same work for five years is functionally different from a full-time employee.
Indeed, it's a huge scam. This kind of abuse is rampant. I worked at a chemical plant that "employed" 0 electricians. Of course, a chemical plant cannot operate without electricians. 3 contractor electricians had been working there as their sole jobsite for years, and would remain there indefinitely, as their work was needed as a routine part of operating the plant. There is no reason they should have been considered contractors.

It's an accounting gimmick that's bad for workers.
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Old 11th September 2019, 07:04 AM   #15
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Originally Posted by TragicMonkey View Post
My field is IT and companies, including the not-for-profit healthcare one I work for, have a nasty habit of laying off regular employees to replace them with contractors who do the same work for the same pay but without benefits.
I work for the government where they instead hire contractors and pay them MORE to do the same work so they can say they're not spending more on employees. It's a political stunt and administrative shenanigan.
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Old 11th September 2019, 07:05 AM   #16
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Alternatively, if we had legit universal healthcare not tied to employment then we wouldn't need to worry so much about the classification difference. Then employers could hire more readily and employees could change jobs more securely. Losing a job wouldn't be such a direct threat to ones actual life.
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Old 11th September 2019, 07:05 AM   #17
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Part of me (I said part before anyone @'s me) feels like this wasn't an issue back when "pay" was the only thing you expected from your employer.
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Old 11th September 2019, 07:16 AM   #18
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Originally Posted by JoeMorgue View Post
Part of me (I said part before anyone @'s me) feels like this wasn't an issue back when "pay" was the only thing you expected from your employer.
I thought that "back in the day" people actually got a lot more from good employers like decent health insurance and good pension provision - as well as intangible benefits like job security, career progression and employment rights.
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Old 11th September 2019, 07:19 AM   #19
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Originally Posted by SuburbanTurkey View Post
Indeed, it's a huge scam. This kind of abuse is rampant...
Agreed. I was in that situation once and it meant no benefits (paid days off, vacations, sick leave, healthcare, etc). Everything else was the same. Pay rate, standard withholding on my weekly check. I wondered, if I'm a "contractor" shouldn't I be required to incorporate as one? Shouldn't there be a contract? Why do I continue to get paid on an hourly rate and receive a weekly paycheck? What "contractor" gets paid that way?

It was so clearly a gimmick designed to reduce my employer's labor cost that I was surprised it was legal.
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Old 11th September 2019, 07:19 AM   #20
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Originally Posted by TragicMonkey View Post
Alternatively, if we had legit universal healthcare not tied to employment then we wouldn't need to worry so much about the classification difference. Then employers could hire more readily and employees could change jobs more securely. Losing a job wouldn't be such a direct threat to ones actual life.
It's still an issue here in the UK, and the rest of Europe where employer-based healthcare is less of an issue, but here the issues are things like employment rights, vacation and sick pay, pension provision and so on.
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Old 11th September 2019, 07:19 AM   #21
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Originally Posted by The Don View Post
I thought that "back in the day" people actually got a lot more from good employers like decent health insurance and good pension provision - as well as intangible benefits like job security, career progression and employment rights.
True maybe "back in the day" was the wrong way to look at it.

But, and TragicMonkey was alluding to and probably phrased it better, if we weren't dependent on our employers for things that were simple monetary reimbursement for work done this kind of thing couldn't be a problem that needed to be fixed.
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Old 11th September 2019, 07:26 AM   #22
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Originally Posted by The Don View Post
It's still an issue here in the UK, and the rest of Europe where employer-based healthcare is less of an issue, but here the issues are things like employment rights, vacation and sick pay, pension provision and so on.
Over here we have no employment rights, sick and vacation days are not required to be offered, and pensions haven't been a thing for fifty years except for a couple of outlying fields. Most of us can be fired at any time for any reason (or "no reason", that is specifically spelled out) without notice or any kind of severance.

Our full-time stable employment is more like your contractors. Our contractors are more equivalent to your buskers.
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Old 11th September 2019, 07:28 AM   #23
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Originally Posted by TragicMonkey View Post
Over here we have no employment rights, sick and vacation days are not required to be offered, and pensions haven't been a thing for fifty years except for a couple of outlying fields. Most of us can be fired at any time for any reason (or "no reason", that is specifically spelled out) without notice or any kind of severance.

Our full-time stable employment is more like your contractors. Our contractors are more equivalent to your buskers.
That's scarily accurate.

"Okay Bill you can either be an employee or a contractor."
"What's the difference?"
"Well you see if you are a contractor we can fire you at any time."
"And if I'm an employee?"
"Same thing pretty much."
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Old 11th September 2019, 07:32 AM   #24
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Originally Posted by Belz... View Post
Oh, I wish we could nominate personal attacks.
It isn't a personal attack.it is an accurate characterization of my position.
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Old 11th September 2019, 07:34 AM   #25
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Originally Posted by TragicMonkey View Post
Over here we have no employment rights, sick and vacation days are not required to be offered, and pensions haven't been a thing for fifty years except for a couple of outlying fields. Most of us can be fired at any time for any reason (or "no reason", that is specifically spelled out) without notice or any kind of severance.

Our full-time stable employment is more like your contractors. Our contractors are more equivalent to your buskers.
Originally Posted by JoeMorgue View Post
That's scarily accurate.

"Okay Bill you can either be an employee or a contractor."
"What's the difference?"
"Well you see if you are a contractor we can fire you at any time."
"And if I'm an employee?"
"Same thing pretty much."
Don't worry, once the UK is out of the EU we'll be hurtling in the same direction

Compared to when I started work 30-something years ago, the difference is stark and the rate at which things are changing is accelerating.

Then again that's what happens when you demonise organised labour.
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Old 11th September 2019, 07:34 AM   #26
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I briefly (7 days) worked as a contract employee for Kirby Vacuums, as a vacuum cleaner demonstrator/salesman. No insurance, and we were responsible for our own gas and vehicle maintenance in a job that involved constant driving.
It was also at the end of the last day of our five day training that they revealed that it was entirely possible to put in a full week of work and not actually get paid, unless you were a pushy jerk.
"If you do 20 demonstrations a week, you're guaranteed to receive $x in pay, or the commission on your sales, if it's greater". What they revealed at the end was that we also had to get names and phone numbers from each person for whom we did a demonstration, contact information for their friends and family members who may also be interested in a demonstration. If we didn't get 10 new contacts from a demonstration, it didn't count toward our total for the week. It was averaged, so 5 from one demonstration and 15 from another counted, but it was still 200 new contacts every week or you didn't get paid, barring commission. This meant you had to either pressure the people to buy the vacuums or pressure them to provide their friends' information. I quit after the 5 days of training and a weekend of "practice" demonstrations with my own friends and family.
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Old 11th September 2019, 07:40 AM   #27
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Originally Posted by TragicMonkey View Post
My field is IT and companies, including the not-for-profit healthcare one I work for, have a nasty habit of laying off regular employees to replace them with contractors who do the same work for the same pay but without benefits. Tell me how a contractor doing the same work for five years is functionally different from a full-time employee.
I’m reluctant to call it outsourcing, since it creates more work for us than it would take to do it ourselves, but we “outsource” much of our IT to IBM. Once of the many, many, problems is that they hire contract employees to do all the actual work. This means they are there for one or a maximum of two 2-years terms.

What this means is that they don’t really follow any standards when they start because they are all used to doing things their own way, and by they time we have them trained their contracts are up and we start all over again.


Sigh, now that I’ve started on an IT outsourcing rant…


Worse still, even though we pay millions for them to “manage” out hardware/OS/middleware they still bill us for any work we ask them to do. This includes cleaning up all the mistakes these contractors make because they get thrown into our environment with no training or documentation on how they are supposed to do anything. They also have an internal mandate that these contractors maintain billable hours rations well in excess of 100%, meaning for every hour they spend working on our stuff they need to find a way to bill us for 2-4 hours.

Senior management is happy with the situation because they can point to Gartner or similar organizations and say “we are following IT best practices”. The auditors are also happy because their checklists are satisfied. The checklists the auditors depend on conveniently line up 1 to 1 with IBM process even though these processes are either irrelevant to us or so badly implemented they are not useful. (eg when we open a ticket with them they won’t even take a severity 1 designation for it because that triggers a national alert. A Sev-3 ticket may or may not get worked on with 2-4 weeks, anything lower will never be looked at. This means literally everything is Sev-2 but the auditors are still happy because there is a Sev-1 to Sev-5 classification system, just like their checklist demands.)
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Old 11th September 2019, 07:46 AM   #28
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Originally Posted by SuburbanTurkey View Post
I think it's possible to move the line pretty far and still not run into a problem for true contract workers.
It may be, but it's also easy to move that line in a way that solves the big problems but screws over small niche companies. Even if it doesn't truly place those niche companies over the line, if it's sort of close, then regulatory discretion and incompetence will hurt a lot of small businesses.

I know at least four businesses in my field that had nightmares with workers comp. Even though they were in the right, it cost them thousands of dollars in legal fees and countless hours to set the record straight.

One company I know ran a small puppet building workshop. Because they worked with foam, workers comp reclassified them as needing to pay as though they ran a rubber manufacturing plant, pouring massive vats of molten rubber into huge machines with all the attendant risk. When in reality, they were nothing like that. The comp fees that were being expected of them would have been more than their revenue. It took most of a year and thousands of dollars in lawyer fees to reseolve it. And that was with a charitably friendly lawyer. By the end, they had to downsize the whole business, partly because the costs and time involved had taken such a toll.

And their story is not rare. Workers comp and tax law etc etc. regularly effect small businesses when the edge appraoches them.

Just because a common sense reading of what a law could or ought to mean doesn't have unintended consequences, doesn't mean that will actually be the case in practice.

I'm very much on board that the problem of renaming actual employees as contractors is far bigger, but when we're changing laws, we need to at least be aware of the collateral damage and hopefully craft legislation that steers far clear when at all possible.
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Old 11th September 2019, 07:50 AM   #29
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Originally Posted by TragicMonkey View Post
Exploitation always finds a way, I'm certain a new method is already being worked on.

I remember when Microsoft had the same problem with contractors vs. full-time employees. They essentially had about half (or more, I forget how it broke down) of their work force classed as contractors, despite being functionally identical to full-time employees. So thanks to a class-action lawsuit, a law was enacted specifying that if a contractor works more than one year for the same employer, then they were legally considered full-time employees and entitled to the same benefits and protections. In order to prevent the obvious loophole, the law also mandated that there had to be a minimum of 100 days (roughly one-third of a working year) between contracts for the same employer, in order to avoid being classified as full-time.

Thus was instituted the "Microsoft Shuffle". They'd employ contractors for a year, send them off on their "100 day break", and hire them back on after the legally-mandated time had elapsed. So it didn't really change their practices, they just rotated more people through contract positions.

As long as there are loopholes, the big corps will find a way to exploit them in order to keep exploiting workers.
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Old 11th September 2019, 08:15 AM   #30
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Can Uber drivers be fired for not choosing to drive?
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Old 11th September 2019, 08:30 AM   #31
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Originally Posted by The Don View Post
I thought that "back in the day" people actually got a lot more from good employers like decent health insurance and good pension provision - as well as intangible benefits like job security, career progression and employment rights.
Hang on a mo, have you explained this to Johnson and co? When they say back to the greater times for Britain they weren't meaning resource units, sorry workers having decent final salary pensions (well apart from their mates on the board of course) and good working conditions!

I do agree that one of the main reasons many of the so called "disruptive " companies have prospered is simply by avoiding having to pay the usual overheads involved in hiring people as employees. It's good to see some pushback.
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Old 11th September 2019, 08:35 AM   #32
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Originally Posted by BobTheCoward View Post
Can Uber drivers be fired for not choosing to drive?
In effect yes
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Old 11th September 2019, 08:38 AM   #33
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Originally Posted by lomiller View Post
I’m reluctant to call it outsourcing, since it creates more work for us than it would take to do it ourselves, but we “outsource” much of our IT to IBM. Once of the many, many, problems is that they hire contract employees to do all the actual work. This means they are there for one or a maximum of two 2-years terms.

What this means is that they don’t really follow any standards when they start because they are all used to doing things their own way, and by they time we have them trained their contracts are up and we start all over again.


Sigh, now that I’ve started on an IT outsourcing rant…


Worse still, even though we pay millions for them to “manage” out hardware/OS/middleware they still bill us for any work we ask them to do. This includes cleaning up all the mistakes these contractors make because they get thrown into our environment with no training or documentation on how they are supposed to do anything. They also have an internal mandate that these contractors maintain billable hours rations well in excess of 100%, meaning for every hour they spend working on our stuff they need to find a way to bill us for 2-4 hours.

Senior management is happy with the situation because they can point to Gartner or similar organizations and say “we are following IT best practices”. The auditors are also happy because their checklists are satisfied. The checklists the auditors depend on conveniently line up 1 to 1 with IBM process even though these processes are either irrelevant to us or so badly implemented they are not useful. (eg when we open a ticket with them they won’t even take a severity 1 designation for it because that triggers a national alert. A Sev-3 ticket may or may not get worked on with 2-4 weeks, anything lower will never be looked at. This means literally everything is Sev-2 but the auditors are still happy because there is a Sev-1 to Sev-5 classification system, just like their checklist demands.)
Grrr.. reading that made me mad. Same situation here, essentially.
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Old 11th September 2019, 08:38 AM   #34
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Originally Posted by Darat View Post
In effect yes
How often are you required to give rides to remain an Uber contractor?
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Old 11th September 2019, 09:04 AM   #35
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Originally Posted by lomiller View Post
I’m reluctant to call it outsourcing, since it creates more work for us than it would take to do it ourselves, but we “outsource” much of our IT to IBM. Once of the many, many, problems is that they hire contract employees to do all the actual work. This means they are there for one or a maximum of two 2-years terms.

What this means is that they don’t really follow any standards when they start because they are all used to doing things their own way, and by they time we have them trained their contracts are up and we start all over again.


Sigh, now that I’ve started on an IT outsourcing rant…


Worse still, even though we pay millions for them to “manage” out hardware/OS/middleware they still bill us for any work we ask them to do. This includes cleaning up all the mistakes these contractors make because they get thrown into our environment with no training or documentation on how they are supposed to do anything. They also have an internal mandate that these contractors maintain billable hours rations well in excess of 100%, meaning for every hour they spend working on our stuff they need to find a way to bill us for 2-4 hours.

Senior management is happy with the situation because they can point to Gartner or similar organizations and say “we are following IT best practices”. The auditors are also happy because their checklists are satisfied. The checklists the auditors depend on conveniently line up 1 to 1 with IBM process even though these processes are either irrelevant to us or so badly implemented they are not useful. (eg when we open a ticket with them they won’t even take a severity 1 designation for it because that triggers a national alert. A Sev-3 ticket may or may not get worked on with 2-4 weeks, anything lower will never be looked at. This means literally everything is Sev-2 but the auditors are still happy because there is a Sev-1 to Sev-5 classification system, just like their checklist demands.)
Originally Posted by Belz... View Post
Grrr.. reading that made me mad. Same situation here, essentially.
Well, at least I'm not alone.

That's exactly our situation now. We're trying for certain certifications, and some things (mostly security-related) are expected to be separated as part of this. Our new security department (whose director used to be a mechanic, manager used to be an artilleryman, and supervisor used to run our ,mail servers and didn't apply a patch or a change for 4 years because she feared she'd break something) is in LOVE with IBM. We outsourced our SOC, which is best practice, so now we get notifications of impending security threats (such as a virus infection) one week after it happens, for only twice the cost as it would run in-house. They did a similar thing with Anti-Virus, now our AV servers are run externally. So we pay them more to have diametrically opposed goals (ours to run our business, theirs to avoid any and all possible risk - they're liable for breaches). They aren't liable for business losses due to restrictive anti-virus controls. We can't even get access to see what is being blocked by AV on our servers without sending in a ticket (there's no on-system notification, and tickets are 2-4 weeks as you said), and it's "against policy" for us to even know what AV rules/policies apply to our servers.

It's freaking ridiculous.

There's a right way and a wrong way for outsourcing things like security. With IBM, unless you are a Fortune 500 company, you don't matter. You're pocket change. You might as well work for IBM, because you need them a LOT worse than they need you, and they aren't afraid to let you know that.

Yeah, it gets me steamed too.
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Old 11th September 2019, 09:12 AM   #36
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I'm lucky that I did 20 years in the military so I'm one of those very rare edge cases that has a pension and one of the rare still that has it at only 40 years old so a very small amount of income, my health insurance, and my life insurance is not dependent on my current employment.
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Old 11th September 2019, 09:15 AM   #37
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Originally Posted by newyorkguy View Post
Agreed. I was in that situation once and it meant no benefits (paid days off, vacations, sick leave, healthcare, etc). Everything else was the same. Pay rate, standard withholding on my weekly check. I wondered, if I'm a "contractor" shouldn't I be required to incorporate as one? Shouldn't there be a contract? Why do I continue to get paid on an hourly rate and receive a weekly paycheck? What "contractor" gets paid that way?

It was so clearly a gimmick designed to reduce my employer's labor cost that I was surprised it was legal.
I'm no expert, but the contractors we hire are all paid straight out and issued a 1099 form w/ no withholding.

The California labor commissioner's office has been going after employers misclassifying hourly wage workers as "management" and "contractors" to get around having to pay overtime hours with some success.
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Old 11th September 2019, 09:17 AM   #38
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That does not sound like best practice. Gartner is a very broad brush and you need to look at ITIL and here we're talking about Incident Management process and Underpinning Contracts to maintain service levels. My wife and I have the entire V2 and 3 manual sets at home. I'm betting the person who negotiated the contract with IBM lacked IT operations experience. I'm also guessing the CIO isn't on the board.


Different places in IBM are more or less difficult to work with. I worked for IBM for 15 years.
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Old 11th September 2019, 09:39 AM   #39
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Originally Posted by JoeMorgue View Post
I'm lucky that I did 20 years in the military so I'm one of those very rare edge cases that has a pension and one of the rare still that has it at only 40 years old so a very small amount of income, my health insurance, and my life insurance is not dependent on my current employment.
How nice for you. I myself am living in a state of constant dread over worrying that one day my butler might drown in one of my many swimming pools and his relatives might sue me to get their hands on some of my Cayman Islands accounts. Sure, I could get by on the money I make from the Mens Health cover photo shoots I do, but I can't stand getting up before 10 a.m. It's hell, I tell you.
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Old 11th September 2019, 09:44 AM   #40
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Originally Posted by TragicMonkey View Post
How nice for you. I myself am living in a state of constant dread over worrying that one day my butler might drown in one of my many swimming pools and his relatives might sue me to get their hands on some of my Cayman Islands accounts. Sure, I could get by on the money I make from the Mens Health cover photo shoots I do, but I can't stand getting up before 10 a.m. It's hell, I tell you.
Oh I wasn't bragging (and I sincerely and without snark apologize if it came across that way) I'm well aware of how lucky and out of the ordinary my situation is.
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