In a large educational company, freelancers now have to pay fees to get paid
Self-employed workers around the world are subject to a wide variety of indignities and scams. It is the workers who are most at the mercy of the whims of their employers and who are least able to fight back. Now in the pantheon of freelance exploitation comes a truly mind-blowing policy: forcing freelancers to pay money to get paid.
Mcgraw hill (MH) is a multi-billion dollar educational publishing company with thousands of employees and offices around the world. Starting in October last year, the company instituted a new policy for all of its freelancers and independent contractors – they are now required to pay fees. 2.2% every time they file an invoice through the company’s billing system, called Fieldglass. (There is no other system, which means fees are mandatory.) In other words, if a freelancer makes $1,000 working for MH, they will only be paid $978. The other $22 will be considered a “administrative costs.”
Indeed, the company imposed a generalized pay cut on all its freelancers and subcontractors, without having to say it right away. An email sent to all freelancers explaining the new fees offered this explanation: “McGraw Hill chose to align with market standards and move to a vendor-funded model. the 2.2The Small Vendor% Fee included on your invoice supports labor market compliance, administrative tasks, and the Vendor Management System (VMS) associated with payment processes. ”
Likewise, the company claims that under its new policy, the costs of MH’s compliance with various laws and regulations are now passed on to the freelancers themselves. “Since october 2020, contractors providing services to McGraw Hill have been charged a fee to cover the cost of third-party vendors who help us ensure that each contractor meets the requirements to be classified as an independent contractor under various state laws and IRS regulations ” , said MH spokesperson Tyler Reed. “We need to make sure that those who classify as independent contractors are in fact contractors, as per state and IRS guidelines, otherwise there is a legal and financial risk to McGraw Hill and the contractor. ”
State laws and IRS guidelines existed long before last October, so it’s unclear why the company then decided it was no longer able to bear the costs of compliance. Reed did not answer this question.
The new practice of charging workers for costs associated with normal company functions does not suit a longtime freelance writer at MH, who said he felt indistinguishable from “salary theft. ”
“It’s going to cost me a few hundred dollars over the course of this year – not the end of the world, but still it’s a de facto pay cut, ”said the freelancer, who asked to remain anonymous for fear of reprisal. “But I don’t know what to do about it except try to spread the word. “
While the policy may be unfair, it doesn’t violate any law, according to the New York City Department of Consumer Affairs and employment law experts. “These practices are likely to be legal. Relationships with independent contractors are very lightly regulated, which is precisely why many independent contractors need the rights and protections that come with being an employee, ”said Laura Padin, senior lawyer for the National Employment Law Project. . “It is telling that McGraw Hill unilaterally imposed these fees on his freelancers. A true independent contractor would set or negotiate the terms of his work. “
The ability of a large company like MH to impose its own costs on its most vulnerable workers is at the heart of the gross power imbalance inherent in the world of independent contracting. The company’s claim that its new royalty is a shift to “aligning with market standards ”is questionable. Dave Hill, vice chairman of the National Writers Union, which represents freelance writers, said such a mandatory fee is “certainly not the industry standard among freelancers working in the media.
It is also not true that every billing platform charges freelancers a reduction on their own bill in order to pay them. Few can say this more definitively than Matt Saincome, a longtime freelance writer, editor and publisher of Hard times and other publications, which founded the billing company Bill, which specializes in paying freelancers, and does not charge them fees. Saincome called the MH charges “horrible ”, and added “It’s a pay cut. ”
“It is not the market norm to lower the administrative or processing costs of freelancers, ”he said. “Employers are already saving money by using self-employment instead of W-2 employees. It is shameful and wrong to ask freelancers to pay the already greatly reduced administrative costs associated with their collaboration.
In America, the incentive for companies to offload their own costs on their workforce is embodied in the very fabric of the labor law governing the independent contractor relationship. This is, for example, why Uber drivers pay to maintain their own vehicles. Such arrangements are tempting for employers, but never benign from the point of view of workers, who are forced to accept less for no other reason than a lack of bargaining power.
“Is it McGraw Hill 21st Century corporate store? No one should be paying the boss to get paid, ”said Larry Goldbetter, president of the National Writers Union. “When the McGraw Hill freelancers are ready, NWU will represent you and together end this practice.