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Working Today NYLS Law Review Vols. 22-63 (1976-2019) Volume 50 Issue 2 Next Wave Organizing Symposium Article 13 January 2006 Working Today Sarah N. Kelly New York Law School Christine Tramontano New York Law School Follow this and additional works at: https://digitalcommons.nyls.edu/nyls_law_review Part of the Labor and Employment Law Commons, and the Law and Economics Commons Recommended Citation Sarah N. Kelly & Christine Tramontano, Working Today, 50 N.Y.L. SCH. L. REV. (2005-2006). This Article is brought to you for free and open access by DigitalCommons@NYLS. It has been accepted for inclusion in NYLS Law Review by an authorized editor of DigitalCommons@NYLS. \\server05\productn\N\NLR\50-2\NLR202.txt unknown Seq: 1 14-APR-06 8:14 WORKING TODAY SARAH N. KELLY & CHRISTINE TRAMONTANO* The average New York City freelancer is well educated and well paid. He1 has earned a college or graduate degree.2 He works in almost any industry imaginable as a writer, artist, financial advisor, or computer technician.3 He performs vital and diverse functions necessary to the strength of the economy and the progress of the business world.4 In New York, this “average freelancer” makes up approximately 30% of the workforce.5 Many industries such as the arts, media, advertising, finance, and especially technology are in- creasingly relying on freelance workers to perform necessary tasks and outsourcing work to them rather than hiring full-time employ- ees.6 As such, because a freelance worker does not maintain a tradi- tional employer-employee relationship, a freelancer does not enjoy the employer-based benefits that traditional workers enjoy. The av- erage freelancer either does not have health insurance or pays $500 a month or more for individual coverage.7 He also pays onerous New York City self-employment tax on top of employment tax.8 Be- cause he essentially works for no one, he is not protected by the * J.D. candidates New York Law School, 2006. 1. The pronoun “he” is used in this article in a gender neutral sense. 2. Press Release, Working Today, Health Insurance Affordability Survey (May 25, 2004), http://www.workingtoday.org/press/05-25-04.php (presenting findings that al- most 90% of New York City’s freelancers have college or graduate degrees). 3. Id. 4. Id. 5. Press Release, Working Today, Survey Findings Presented to City Council (March 5, 2003), http://www.workingtoday.org/about/03-05-03.php. 6. David English, Getting in: Media managers at top corporations and outsourcing agen- cies tell you how to land your next contract, AV VIDEO MULTIMEDIA PRODUCER, Jan. 1, 2004, at 22, available at www.dvformat.com/2004/01_jan/features/gettingin.htm. 7. Press Release, Working Today, Educated, Working, Well Paid . And No Health Insurance: A Conundrum For Growing Freelance Workforce in New York City (May 25, 2004), http://www.workingtoday.org/press/05-25-04.php (reporting that 47% of freelance workers in New York City experience gaps in health insurance coverage and 84% find it difficult to afford health insurance). 8. Working Today, The Issues, http://www.workingtoday.org/advocacy/is- sues.php (last visited Oct. 16, 2005) (explaining that freelancer workers must pay self- employment tax in addition to individual income tax, whereas a worker who enjoys a 597 \\server05\productn\N\NLR\50-2\NLR202.txt unknown Seq: 2 14-APR-06 8:14 598 NEW YORK LAW SCHOOL LAW REVIEW [Vol. 50 anti-discrimination laws under which traditional employees can seek redress for discrimination in the workplace.9 Nor is he cov- ered by unemployment insurance.10 Freelancers became second-class workers during the 1940s, de- spite President Franklin D. Roosevelt’s efforts in the 1930s to pro- tect all workers through New Deal legislation.11 In 1947, with a Republican majority in the House of Representatives and the Sen- ate, Congress, over President Harry S. Truman’s veto, passed the Taft-Hartley Act, which expressly excluded independent workers, as well as agricultural and domestic workers, from the definition of “employee.”12 Thus, independent workers were no longer afforded protection under the New Deal legislation.13 The Taft-Hartley defi- nition of employee14 still stands today and, as a result, freelancers are not explicitly protected under the slew of legislation enacted by traditional employer/employee relationship is only responsible for paying individual income tax, because the employer is responsible for paying employment taxes). 9. Id. 10. Id. 11. The National Labor Relations Act (NLRA), ch. 372, §2, 49 Stat. 450 (1935) (codified as amended at 29 U.S.C. §§ 151-169 (2000)) and the Fair Labor Standards Act (FLSA) of 1938, ch. 676, 52 Stat. 1060 (codified as amended at 29 U.S.C. §§ 201-219 (2000)) are collectively known as “The New Deal.” The NLRA gave employees the right to unionize and the ability to bargain collectively for the right to negotiate the terms and conditions of their employment. See 29 U.S.C. § 157 (2000). The FLSA set the standards for minimum wage and maximum hours, and imposed penalties on employ- ers that violated regulations under the Act. See 29 U.S.C. §§ 206, 207 (2000). 12. National Labor Relations Act, ch. 120, 61 Stat. 136, 138 (1947) (amending the National Labor Relations Act of 1935). For general discussion of the National Labor Relations Act, see Thomas M. Murray, Independent Contractor or Employee? Misplaced Reli- ance on Actual Control Has Disenfranchised Artistic Workers Under The National Labor Rela- tions Act, 16 CARDOZO ARTS & ENT. L.J. 303, 310 (1998). 13. See Murray, supra note 12. 14. The NLRA as amended provides: The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act explicitly states otherwise, and shall include any individual whose work has ceased as a con- sequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual em- ployed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any indi- vidual employed as a supervisor, or any individual employed by an em- ployer subject to the Railway Labor Act, as amended from time to time, or by any other person who is not an employer as herein defined. \\server05\productn\N\NLR\50-2\NLR202.txt unknown Seq: 3 14-APR-06 8:14 2005-2006] WORKING TODAY 599 Congress designed to protect employees’ rights.15 Freelance work- ers who must obtain individual health insurance are not afforded the same federal protections against discrimination by health insur- ance providers that are available to individuals who receive health insurance through their employers’ group-rate plans. Specifically, the protection against denial of insurance coverage due to pre-ex- isting conditions does not apply to workers in nontraditional work- ing relationships.16 A freelance worker living in New York City with no dependents must earn over $120,000 per year in order to afford the cost of an individual plan premium.17 Yet less than 4% of freelance workers fall within this income bracket.18 The result is that many freelancers 29 U.S.C. § 152 (3) (2000) (effective July 5, 1935) (amended June 23, 1947) (emphasis added). The 1947 amendment added independent contractors to the list of individuals that were not included in the definition of employee. Id. 15. Title XXIX of the U.S. Code provides health, safety, and benefits to employ- ees, but defines “employee” to exclude freelancers. See 29 U.S.C. §§ 1-3058 (2000). 16. See Group Health Plan Requirements Relating to Portability Access and Re- newability, 29 U.S.C. § 1182 (1996). The Group Health Plan Requirements Relating to Portability Access and Renewability prohibits health insurance providers from discrimi- nating against individual participants who are offered health insurance benefits through their employers’ group rate health plan. Id. As such, an insurer cannot refuse coverage based on an individual’s health status, medical condition, or disability. See id. In contrast, individual health insurance coverage does not provide such broad protec- tions. For example, § 1182 along with the Individual Market Rules Relating to Portabil- ity Access and Renewability, 42 U.S.C. § 300gg-41, prohibit health insurance providers from denying coverage to individuals with preexisting conditions, but only if: 1) the individual had prior coverage for an aggregate of 18 months before applying for cover- age; and 2) the prior coverage was through a group plan, governmental plan, or church plan. Hence, if an individual was either uninsured or had prior insurance with an indi- vidual plan, health insurance providers can refuse coverage. 17. The average monthly premium for an individual health plan is $521 per month. See Working Today, supra note 7. Studies show that freelancers in New York City can afford to pay approximately 5% of their gross income on health insurance. Assuming a $521 monthly premium, a freelancer’s health insurance plan would total $6,252 per year. A freelancer’s annual income would need to equal at least $125,040 in order for an individual health plan to be “affordable” according to the 5% affordability ratio. A majority of freelancers surveyed by Working Today, however, feel that because of the high cost of living in New York City, they would have trouble allocating even 5% of their income to health insurance. See Working Today, supra note 5. See also SARA R.
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