(stock photo url: freelancer-using-notebook-woman-working-on-laptop-computer-typing-the-keyboard-at-home)
I’ve been freelancing since before it was cool to freelance (wait, was it cool in 2001?). Now the term is all the rage on glitzy new media sites and it seems like every other job out there is part of this new “gig” economy. When you think of a typical freelancer, do you picture a hip 20-something doing something cool and undecipherable, like writing code or designing graphics on a laptop in a cafe? Our stock photo friend pictured above? Or a creative professional such as a photographer traveling the world? I think that these jobs do exist, but they don’t resemble the piecemeal work of most freelancers I know. The more I explore it, the more hazy the term becomes.
Here’s an incomplete list of synonyms for freelancer or freelance work: Self-employed. The gig economy. Independent Contractor. 1099 employee. Small business owner. Independent Worker. Entrepreneur. These days it seems everyone and their little brother wants to be an entrepreneur or _______-preneur. I’ve heard the terms solo-preneur and mom-preneur more than I’d like lately and even just googled violinpreneur, and yes, it exists. But, if you’re like me, you’re still trying to figure out the rules and possibilities around plain old freelance work.
On wikipedia (https://en.wikipedia.org/wiki/Freelancer), I learned that the term was invented by Sir Walter Scott and was used to describe a mercenary soldier, someone who was not in the service of one lord or master . Free as in liberated, lance as in that long pointy weapon you use to stab your enemy. These days freelance work can encompass many fields but is mainly defined by the lack of a typical employer-employee relationship. We work for no lord! Or at least we have multiple lords…
In a freelancers life, jobs are often categorized by tax status. When you are employed, even part time as an employee, you receive a W2 with taxes like social security, disability etc taken out by the employer. The independent contractor tax form is called the 1099, so sometimes independent workers are called 1099 workers. In this case, the person paying (usually called the client) is not responsible for any deductions or taxes.
In my life I work a mix of W2 and 1099 jobs or gig. Sometimes the actual work is identical in nature. For example, playing for the Santa Cruz Symphony is a W2 job, playing for the Santa Cruz ballet theater is a 1099 job. The group of musicians is nearly the same and we perform in the same venue. As a violin teacher, I have been truly self-employed which means I have recruited my own students and taught in my own space; I have been hired by studios as an independent contractor and I also have been hired by studios or schools as a part-time employee (W2 not 1099). The work was nearly identical in each case, though only in the first could I set my pay rate.
The IRS considers independent contractors to be self-employed, so it is all the same to the government if you are a self-employed violin teacher, an Uber driver, dentist, or a techie raising millions of dollars of venture capital for some new app. If you work for yourself and don’t have an employer taking out taxes, it is legally the same as owning your own business. In IRS speak, “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” (www.irs.gov) The most straightforward example of this client/worker relationship I can think of is that of a contractor you would hire to work on your house, say to fix a roof. The client calls for a quote and the contractor sets the rate and time estimate. The contractor provides a contract that the client (not called an employer) agrees to. Thus the term independent contractor.
In the real world, many independent contractors are not truly self-employed. There are many grey areas with projects that don’t have a set completion date. For example, I have taught music at a school, with prescribed hours, pay and curriculum and still been considered an independent contractor, which coincidentally saves the employer (not my client…. see how this is confusing?) a lot of money and paperwork. The school or program or company is not obligated to pay for payroll taxes, workers comp, disability insurance when hiring an independent contractor. Many new companies in this “gig ecomony” like Uber, InstaCart, PostMates, DoorDash etc. are using independent contractors as workers. More and more companies are following suit even for administrative office jobs that formerly would have been straight-ahead employer/employee jobs. The hip term for this disturbing trend is “uberization.”
So, to sum up: Independent contractors (1099 workers) and freelancers are not exactly synonymous. A freelancer is someone who works for multiple clients and/ or employers, sometimes as an employee, sometimes as an independent contractor, sometimes hired long-term, sometimes under the company’s guidelines, sometimes for a third-party contractor. Sometimes the independent contractor is truly independent and allowed to set his or her own pay, terms and hours, sometimes he or she simply signs a contract agreeing to terms that have already been set. If you work for Uber or TaskRabbit or similar companies, you are considered an independent contractor but you are not necessarily a freelancer. If you work for multiple employers, you may be an independent contractor or just a part-time worker, it depends on your tax status. If you’re a musician, you are probably a freelancer, unless you have a salaried job at a major orchestra or university. If you work a traditional job in which you are paid hourly or salaried and get a W2 tax form, you are not an independent contractor but you may freelance on the side as a self-employed entrepreneur, say by designing websites or selling stuff on Etsy. If you stab people on horses for money, you are most definitely a freelancer.
Clear as mud? Welcome to my world.
Next time I’ll explore the actual benefits, and lack thereof, in independent contractor work. In the meantime, please send me stories and examples of freelance or independent contractor work you have done… I especially love horror stories!
Now get back to (freelancer-using-notebook-woman-working-on-laptop-computer- typing-the-keyboard-at-home) work!