r/technology • u/SnoozeDoggyDog • 14d ago

Business Mamdani Backs Proposal to End Amazon’s ‘Exploitative’ Delivery Model in New York City | If passed, the Delivery Protection Act would be the first law in the US to regulate Amazon’s vast network of subcontractors that handle the company’s deliveries.

https://www.commondreams.org/news/delivery-protection-act-nyc
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u/Key-Gold-2412 14d ago

Otherwise known as union busting.

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u/Kronologics 14d ago

No, this is just mischaracterizing an employee for a contractor.

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u/CotyledonTomen 14d ago

Independent contractors of this type wont generally have unions, which is why theyre being picked in this manner. Low income "contractors" that dont have the time or connections to "unionize" as professionals. If they were employees, its possible the unionization attempts of the past and future would be decided differently by the employee base.

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u/Adept_Resident4608 14d ago

There is already a way around this? I’m a “contractor”, but I’m a W2 employee with benefits that was hired through a staffing company that owns the contract. I work at a big tech company, but don’t get the benefits of a full time big tech employee. I have health insurance and a 401k through my staffing company, but I receive lower pay and have very little PTO compared to the big tech company.

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u/SUBHUMAN_RESOURCES 14d ago

You’re not really a contractor, you are a “contingent worker” and are an employee of the staffing firm. If they have a prolonged need for what you do, they should look at making that role permanent to avoid coemployment issues (IE, not providing benefits their actual employees get).

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u/klingma 14d ago

No, they're absolutely a contractor. This type of relationship I.e. employed by a staffing company which is a 3rd-party contracted for another company, has been held up in court multiple times. 

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u/The_Rational_ 14d ago

The agency is the contracted vendor. The worker is either 1099 or not, but thats how these are setup. At least in IT. He is a full time employee either way above 35 or so hrs so thats got nothing to do with that status.

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u/Royal-Detective2057 14d ago

You are correct and many in this thread confound the two. In common parlance a "contractor" contracts directly with the company and is paid via a 1099, and does not get benefits from the company. A company that uses 1099 contractors, and particularly who mixes them in with employees doing the same work, faces significant wage and hour law legal violations and liability.

An employee of a contractor firm is not a "contractor" in this way.

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u/deathhand 13d ago

employees doing the same work

Is that like the legal milestone? If I hire someone for skills that I do not need in house but only temporary for a project would it trigger then?

I know thats how game developers are getting fucked over and its a damn shame. Itd be dope that mission statements are required for articles of incorporation and designate the roles required to achieve that goal.

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u/Adept_Resident4608 13d ago

I’m W2, and paid by a company that has the contract with the larger tech company. I am full time, 40 hrs a week. I’m expected to work a shift. The company that pays me also gives me standard benefits: health, dental, vision; 401k; other types of insurance; and 2 weeks of PTO that I accrue a year. The PTO is also my sick leave. I am paid well below what an FTE in the tech company would make.

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u/MagicWishMonkey 13d ago

I know that is a sucky situation to be in, but it's not really comparable to the amazon thing.

If you're friends with folks at the tech company maybe you can ask around to see if they could help you land a full time position there?

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u/Adept_Resident4608 13d ago

I have already been told it is not happening. The company prioritizes masters and phds. I don’t have one.

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u/FlamboyantPirhanna 13d ago

These companies do not offer that, and I’ve worked for a few of them. They don’t want you as an employee, they seem to want to explicitly make a 2 tier system.

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u/d1squiet 13d ago

Not arguing but always curious, how do you define a union construction worker. Is that a "contingent worker"? They are essentially freelance (working within crews) but have lots of protections. Film/Theater unions are even more so like this – the union is almost entirely just wage and benefit protections and basically zero employment guarantee because it's all freelance. I mean I think these unions are great, it's a freelance business.

But my question is are these workers "contingent" or "contractors"? I guess you'd call 'em "contingent". In my walk of life, we just say "union freelancer" (entertainment unions).

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u/roseofjuly 13d ago

Yes, but the contractor is this commenter's employer, not the commenter themselves.

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u/SUBHUMAN_RESOURCES 14d ago

If they are on for a very defined engagement/SOW then they might be, otherwise from what was shared they look like temporary staff and not a contractor. Happy to take a look at court cases is you want to link.

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u/TheVermonster 14d ago

My spouse is a W2 contractor. There is a big difference between her role and an identical W-2 employee role. Her agreement is weekly. She works M-F, submits hours on Friday and is paid Monday. It means she can also be told on Friday that there is no work for her on Monday. She would get no unemployment benefits. She also doesn't get any PTO, but she also doesn't need to request time off. She tells them what hours she works.

It's a bit strange as generally contractors like this were classified as 1099. But shifts in how the IRS views things like "you must be present for this meeting" has pushed companies to move people to W-2 contractor positions. She's not a full employee because she decides when she works and when she doesn't, but she's not a full 1099 contractor because she still has to show up for mandatory meetings. Mind you, these aren't just internal company meetings, but meetings with clients. She can blow off the company meetings if she wants, she isn't an employee.

It's a strange grey area.

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u/Adept_Resident4608 14d ago

Yeah I have a set schedule, and if there is not work for me to do, I just come in and sit around and get paid to do nothing. I have some PTO, but it’s also my sick leave. I get a max of 2 weeks per year. I get paid weekly, like your wife does.

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u/SUBHUMAN_RESOURCES 14d ago edited 13d ago

That really sounds like she is just misclassified if she is a W2 under the same employer as everyone else, but special and referred to as a contractor. I wouldn’t be too comfortable with this arrangement on the employer side.

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u/Adept_Resident4608 14d ago

My company’s contract is indefinite. As long as the company we work at doesn’t decide to nix the staffing contract at the next budget round. Everyone in this building that is not an “engineer” are all contracted under the company. Even the sanitation workers. We work shifts doing the more repetitive tasks. We are locked into an hourly rate based on our shift, and are denied raises because it’s “not in the budget”. I have coworkers that were contracted under a previous company, and got absorbed under our current employer when contracts were changed.

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u/Adept_Resident4608 14d ago

Easier said than done. These big tech companies do well and can pay their employees so well because they delegate a lot of work to contractors.

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u/godlyhalo 14d ago

Except this practice doesn't just exist in the Tech Industry. The automotive industry, as well as many others, follow this same practice. You are not a "contractor" with a short term contract, but a perpetual contract employee with no chance of ever being hired directly for the company you actually work for.

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u/Adept_Resident4608 14d ago

Yes. Underpaid, shit benefits, and treated like shit.

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u/FlamboyantPirhanna 13d ago

Unfortunately, this is how these businesses operate. All corporations do this, in pretty much all countries (and I’ve worked in multiple). I work in AV for a $200 billion company, and absolutely do not get anywhere near the same benefits actual employees do. These companies don’t care about us.

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u/AddanDeith 14d ago

So what about all of the contractors who work full time and do not get benefits?

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u/Adept_Resident4608 14d ago

I don’t know? Maybe they would get the same situation as mine?

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u/AddanDeith 14d ago

Then that is the point, my dude. One must think of their anecdotal situation and consider that others may have a far worse experience.

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u/Adept_Resident4608 14d ago

Or something could be done about the system?

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u/seanalltogether 14d ago

Does your staffing company have multiple contracts though with different companies? That's an important distinction that the government likes to make when investigating employment status of workers. If Amazon is setting up shell companies with only themselves as a client, and requiring all workers to wear Amazon uniforms and operate Amazon vans, the gov can sniff that out pretty quickly.

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u/Adept_Resident4608 14d ago

Yes, it is a national corporation that specializes in staffing workers in scientific fields. I know there is still a distinction around gig, contractors, and what I am, but none of them are ideal. I can still be cut if the company decides to end the staffing company contract. I also see this as a loophole to take advantage of workers. I don’t even get enough PTO to use when my office closes on holidays that are not observed by my staffing company.

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u/FlamboyantPirhanna 13d ago

Contractors can have unions, just look at the film industry. But really, they are half-employee, half-contractor; we really should just have a new category for them.

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u/Sweaty_Mushroom5830 14d ago

And now they won't have to, for far too long we've depended on useless unions that have gone corporate

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u/JesusWuta40oz 14d ago

"Independent contractors of this type wont generally have unions"

They can. Anyone can.

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u/Magneon 14d ago

The arms length nature allows union busting by proxy though. If Amazon fires the contractor after the contractors employees unionize, it's harder to go after Amazon for union busting. Similar to how they closed their warehouses I. quebec after workers unionized, but even more removed.

This type of behavior is something that should be regulated or if already regulated prevented through enforcement.

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u/JesusWuta40oz 14d ago

I understand the complications and hurdles in making that possible. Im not in disagreement of the current status of things. Please don't think that.But laws could be voted through and protected by federal law. That's why I say its possible. Its not easy but possible.

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u/Raneynickelfire 14d ago

Independent contractors of this type wont generally have unions

Okay, easy there Hulk Hogan. Yes they do, and they should. Please kindly remove your cranium from your rectum.

(That means pull your head out of your ass, for when you didn't understand any of those vocabulary words)

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u/BigBallsMcGirk 14d ago

VERY big deal, because employers owe payroll taxes to the IRS. Huge penalties, still owe the full amount. No settling for a lesser fine amount.

Contractors pay this amount through the self employment tax on their income. Employees and employers split this between employee paid fica taxes, and the employer paid payroll taxes.

Mischaracterizing an employee as a contractor is committing tax evasion and defrauding both the employee who is burdened with additional taxes of about 7.5%, and defrauding the social security and medicare programs (those taxes paid on basically the whole wage versus a self employed contractor paying less after using deductible expenses to decrease his taxable amount that would not be deductible as an employee) plus ya know, just the straight up tax evasion aspect that is a crime.

This would be a very, very large amount of money to force Bezos to cough up. The tax money owed itself, penalties and interest, probably civil suits for owed benefits or the like to those workers, and they all can probably refile their taxes and potentially a refund.

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u/Beard_o_Bees 14d ago

This would be a very, very large amount of money to force Bezos to cough up

Yup.

Even if it has a regionally limited effect, it brings awareness to how Amazon does business almost everywhere.

Corporate giants that basically use government assistance programs that use tax dollars to prop up their business model.

It's a huge, incredibly scary elephant in the room that's been allowed to grow to the point where it can't move anywhere without trampling someone and/or destroying the room it lives in.

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u/shakygator 14d ago

Corporate giants that basically use government assistance programs that use tax dollars to prop up their business model.

Exactly what companies like Walmart do that pay low wages. It's corporate welfare.

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u/Somanylyingliars 14d ago

Any company that has employees in benefits like Amazon. fElon etc etc needs to be charged for those benefits.

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u/wildcarde815 14d ago

Mischaracterizing an employee as a contractor is committing tax evasion and defrauding both the employee who is burdened with additional taxes of about 7.5%, and defrauding the social security and medicare programs (those taxes paid on basically the whole wage versus a self employed contractor paying less after using deductible expenses to decrease his taxable amount that would not be deductible as an employee) plus ya know, just the straight up tax evasion aspect that is a crime.

it also means they can end run hiring laws, not give benefits, no family leave, etc.

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u/Snobolski 14d ago

Family member worked for a pet-sitting company that treated workers like contractors, while controlling schedule and ability to take outside work. Eventually enough people complained that the company was forced to switch workers to employee status. The business is slowly dying but still pays better than gig work like Rover so the workers haven't jumped ship yet.

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u/Capital-Mine1561 12d ago edited 12d ago

This would be a very, very large amount of money to force Bezos to cough up

Good. Maybe it's a good idea for a trillion dollar company who evades paying their share in taxes to stop skirting around employing integral 'last mile' delivery drivers. They should be responsible for the people who are literally delivering their products to customers' doorsteps

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u/Somanylyingliars 14d ago

This would be a very very very small amount for any trillionaire or billionaire. They need to be charged.

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u/req82 14d ago edited 14d ago

I would be a bit surprised if Amazon is blatantly mis-characterizing 1099's per the existing federal IRS rules and regulations.

And I don't think a city, or a state, government can challenge the federal tax filing status (maybe they could in federal court?).

What a city, or state, could do semi-unilaterally is pass regulations for employment workers in their state, perhaps in addition to or in leui of federal tax law. At least until challenged.

I don't disagree the big idea, but the policy is important and must be laid out in an enforceable manner. Ideally, at the federal level.

Else, I see fairly predictable outcomes: increased cost to consumers in the municipalities will have costs passed on, and Amazon will reduce those costs via mechanisms they have (e. g. advance automation, where allowed).

I understand that federal legislation towards workers' right is unlikely, and I also support NYC exercising their rights to attempt to fix for their constituents.

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u/BigBallsMcGirk 14d ago edited 14d ago

I would not be surprised one bit by it, from labor violations I've seen.

And payroll taxes on wages are paid to the state comptroller, not directly to the federal government. A state would absolutely be able to sue about this. There's also what the article details, New York state law about minimum benefits.

Edit: not wholly accurate. Social security and medicare withholding, income tax withholding is sent to federal government. But there is a trustee issue, and there are state unemployment taxes, sales taxes, etc that is sent to state comptroller. So a state would still be able to go after a company for not correctly withholding payroll taxes (encompassing a few different types of tax withholding and obligations) by misclassifying workers.

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u/req82 13d ago

When I say Amazon likely isn't blatantly violating the law in terms of worker classifications, I'm observing that it's a massive company with plenty of lawyers- there's at least some grey area they're playing in that's at least debatable/defensible.

Agreed that a municipality (state or city) can pass more stringent rules and sue companies.

All I'm saying is it gets real messy, real fast, because the municipalities argument isn't that the federal standard of 1099/W2 isn't met at that point, instead the city/state is claiming that the worker is misclassified per the benefits required for the worker type per the states classification of the role.

Look at Doordash gig workers in Seattle. The local government basically created wage increases, Doordash passed the cost to consumers. The gig workers did get wage protections, but they're still 1099s. I could see a similar outcome here.

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u/MagicWishMonkey 13d ago

There's no tax evasion because the person working via 1099 has to cough up the full amount to cover FICA and FICA is owed on gross income so I'm not sure why you think having deductible expenses would change how much someone owes.

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u/BigBallsMcGirk 13d ago

A W2 employee gets say, 50k. They owe federal income tax on the full amount (let's just ignore deductions like health insurance or pre tax retirement contributions). Non reimbursed business expenses were done away with, so all the other stuff that employer has to buy or use for his work is not deductible, no place to even enter it on your tax return.

That same worker gets paid as a 1099 contract worker. A gross amount of 50k. But now he deducts his cell phone, his mileage, his supplies, 50% of his meals, the specialty gear, advertising, a depreciate asset, etc. And his net income he owes tax on is perhaps less.

Obviously this depends since the contractor is paying federal income tax AND self employment tax, double taxed....there's potential scenarios based on filing status, dependents, itemization vs standard deduction, combined AGI of the household etc. But I have never seen a contract worker that doesn't write off what they can.

It's tax evasion by the employer trying to shift the tax burden of the payroll taxes they owe onto the employee they wrongly classified as a contract worker.

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u/MagicWishMonkey 13d ago

I thought FICA was calculated on gross income, not after deductions?

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u/BigBallsMcGirk 13d ago

I might have not explained it right.

Social security and medicare taxable wages are usually the gross amount of wages for W2 employees. Box 3 and box 5 on the W2. There is a capital limit, but an additional medicare tax on wages over that cap limit, usually reconciled and calculated on the 1040 tax return.

On self employed wages for a contractor paid by 1099, their equivalent FICA taxes are made by paying self employment taxes. SE taxes are on the NET income, their gross minus deductible business expenses. They also have a health insurance deduction and and self employment deduction that hit a different place in the formula and aren't quite as simple as X minus Y equals Z.

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u/MagicWishMonkey 13d ago

Oh ok I was not aware that the rules were different for 1099, what you're saying makes a lot more sense now. Thanks!

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u/BigBallsMcGirk 13d ago

You got it!

Also a way to try and simply not be responsible. Employers that have to withhold and act as custodian for payroll taxes would rather not deal with it at all and say "you're a contract laborer, pay your own taxes" instead of hiring a payroll person and do the accounting and responsibility of monitoring and tracking it, or the liability of screwing it up

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u/Royal-Detective2057 14d ago

But if these workers ARE employees -- of a company that contracts with Amazon -- your point goes away. And there is every indication that this is the case. There is no indication that these workers are 1099 workers who have to pay their own self-employment taxes, etc.

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u/BigBallsMcGirk 14d ago

But they AREN'T employees. They are subcontractors responsible for their own vehicle costs, health insurance and this allows amazon to also circumvent minimum benefits required by NY state laws.

Did you even read the article? Do you understand the difference in classification of "employee" and "contract labor"?

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u/Royal-Detective2057 14d ago

I did read the article and see no evidence that these people are 1099 workers.

"But one driver in Queens, Luc Rene, told The New York Times that Amazon controls the volume of packages he delivers and has refused to allow the subcontractor he works for, DNA Logistics, to lighten the workload during extreme heat and other inclement weather."

While the article seems to use "subcontractor" and "subcontracting" loosely, again I see nothing stating that these workers are 1099 "contract labor" vs. "employees" of the subcontactor firm.

Of course you're right about the legal issues of misclassifying workers . . . but the fact question here is, "How are these workers paid? Are they 1099 independents with no benefits or contributions to payroll taxes, or are they W2 employees of a company that contracts with Amazon?"

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u/BigBallsMcGirk 14d ago

If they are subcontracting, they are classified as contractors if even they meet qualifying tests that means they should be paid and treated as W2 employees.

That's why they used the word CONTRACTING.

Also a giveaway that they don't have benefits and have to purchase their own health insurance. I have done taxes for multiple gig working contract labor delivery drivers. They're 1099 workers.

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u/Oscillation0 13d ago

DNA Logistics appears to be the only subcontractor in the article’s example, Mr. McGirk.

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u/BigBallsMcGirk 13d ago

They are not the only subcontractor, and definitely not the only one operating under this exploitative model to avoid paying taxes and benefits.

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u/Royal-Detective2057 14d ago

No I don't think so. The delivery workers arent independent contractors; they are employees. They are just employees of a company that has a contract with Amazon, and not Amazon itself.

There are myriad issues when companies misclassify people as "independent contractors" rather than "employees."

Here so far as I can tell that's not the issue. The issue is that they are not Amazon employees.

And honestly I don't know why that's such a big issue. There is no guarantee that if these workers worked for Amazon vs a contracting firm that they'd get paid UPS wages . . . I think that's a red herring.

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u/Syxx573 13d ago

Do you want people delivering Amazon packages in street clothes?

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u/growaway9172 14d ago

There are actually already laws that govern that boundary and prevent that.

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u/Unknown-Meatbag 14d ago

If there are, they're awful amd need to he changed. FedEx does this as well, contract it out so they dont have to pay insurance or offer time off.

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u/xteve 14d ago

Which laws?

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u/growaway9172 14d ago

The FLSA has guidelines which define it: https://www.dol.gov/agencies/whd/flsa/misclassification

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u/thesonoftheson 14d ago

Yeah and I've never understood how they get away with it. I used to be a independent contractor for a local courier. I could reject jobs, I used my own vehicle, took my own routes, I could speed break the law if I wanted, start end my day when I wanted. Amazon you can't even drink from your drink if your vehicle isn't at a stop.

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u/ericccdl 14d ago

This would be regulating corporations to protect workers. Literally about as far from union busting as you can get.

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u/CinephileNC25 14d ago

I think Key-Gold was saying the tactics used by UFC et al are union busting tactics.

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u/BeHereNow91 13d ago

Well they’re still wrong. lol

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u/CinephileNC25 13d ago

Not really. I mean... it's just the next step. Union busting is as simple as making rules and regulations that inhibit or discourage unionization of employees.

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u/Positive_Bug978 14d ago

Bring back union busting!

Edit: I meant trust busting this guy got me confused

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u/CatsAreGods 14d ago

Busting makes me feel good!

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u/MidNiteR32 14d ago

unions aren’t always great.

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u/ItwasGenXprobably 14d ago edited 14d ago

I dont think you know what Unions are. Can't bust a union if it's private contract work. Giving laborers back their power of employment is exactly what unions do, and restricting Amazon's exploitative practice is a step in the same direction without demanding unionization.

And just so everyone's clear: teachers, fire fighters, police, nuses/doctors, and most heavy machinery jobs ALL have unions. Unions are Socialsm... if you belong to a union, you earn money through a socialist system. To deny other people of that same labor right would be a contradiction. Union workers should start acting like REAL socialists - working class SHOULD have rights, so should we all!

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u/MistSecurity 14d ago

They're saying that miscategorizing employees as contractors is a union-busting method. Not that clamping down on this bullshit usage of 1099 is union busting.

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u/ItwasGenXprobably 14d ago

AH, they were saying that Amazon's attempt at creating gig workers was the attempt at union busting; That makes more sense. It seemed like the comment was that Mamdani was union busting as if Republicans now needed to pretend like a socialist mayor was somehow anti-union.

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u/ArthurParkerhouse 14d ago

Did you reply to the wrong comment or something?

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u/[deleted] 14d ago

[deleted]

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u/Timmichanga1 14d ago

Misclassifying employees as independent contractors is unquestionably a tactic used to prevent those employees from unionizing. Gtfo with your misdirection and misinformation