But just because you get a 1099 at the end of the year instead of a W-2 doesn’t mean you can’t draw unemployment. I learned this lesson personally after being laid off from my job as a blogger for the gossip site Gawker, and being told by various know-it-alls that I couldn’t collect because I’d been paid as a freelancer. I applied anyway, and while I had to wait six months for the board to make a ruling, I finally started drawing checks, a $405-a-week lifeline.
Sheila wrote about finally getting unemployment from Gawker in the Post on Nov. 2. (The graf above was buried in an article about how laid-off freelancers can sometimes get unemployment benefits.) Today Choire reports that Gawker is giving its employees a choice: become full-time, for real, or stay on contract and work four days a week, thereby avoiding being “full-time.” (Or something. Presumably they have run this by a lawyer, or at least Gaby. Which, related: Is she full-time?)
I highly doubt that this is something Nick is doing out of the goodness of his heart. (He has one, okay?) It is much cheaper to have all your employees be contract employees. Forget health insurance; even if they’re full-time he doesn’t have to offer it. (There was a brief period, around when I worked there, that we were offered health insurance, I think thanks to Oxfeld. As far as I know that stopped soon after I left.) But by having everyone on contract Nick could avoid paying payroll taxes on his employees, which—from what I understand—amount to around an extra 15 percent of payroll. Not an insignificant sum, certainly.
Nick may have been alone in building an entire company based on contract employees, but he’s certainly not alone in media. It’s the dirty little not-so-secret, isn’t it? The way that the New York Times “lays off” its (contract) news clerks every six months for two weeks so that they don’t become full-time employees and join the union and have to get health insurance. TimeWarner, Conde Nast, BusinessWeek, Viacom… I know, or have known, people at all of those companies who were “freelance” and yet, mysteriously had to go into an office every day from 10 to 6 or whatever and do the same jobs as people who were getting benefits. Funny, that! It’s no surprise that nobody has really written this story, because every media company I know of does it.
But anyway, re: Gawker, then the question becomes: Does the 15 percent that Nick loses in payroll taxes get made up in other ways? Do employees become more loyal? More productive? Do they stay longer? I’m curious to see how it all plays out.