Thursday, July 30, 2015

Newspaper Carriers and the Independent Contractor

I read an article recently on WorkCompCentral. A New York Senator has filed a bill to change the definition of "employment" so as to exclude "newspaper carriers." This would also "remove most newspaper carriers from workers' compensation, unemployment and minimum wage protections" of state law. In late June, the bill passed.  

This caught my eye because I began my working life as a newspaper carrier, back in the day. I was carrying The Washington Post. As I recall, school required me to be catch the bus about 7:30 each morning. That effectively meant that from 5:30-7:00 I was moving newspapers. The exceptions were Thursdays and Sundays. Those were "insert" days. Insert days were far tougher.

The newspaper generally came fully assembled. But on Thursday mornings I got both bundles of papers and bundles of "inserts," essentially a section of the paper printed separately. On Thursdays, the insert I recall was about the coming weekend, and included some flyer-like ads. On Saturdays, I would receive the Sunday inserts, several for each paper. As I recall it was the "style" section, the "book" section and the "comics," within which were many advertising flyers. Those would all have to be combined, usually on Saturday, so that they were essentially complete on Sunday morning when the actual "news" sections arrived to be integrated into the final product.  

So, on Thursday and Sunday mornings I had to start earlier, to do the inserting before delivery. Sunday required more time because I could carry far less of the Sunday papers at one time, they were about two inches thick while most days the paper was less than 1/2 inch (slow news days were a blessing). Like the Postal Service motto, the papers had to be delivered through rain, sleet and snow. I learned a lot from that job. 

First, I did not get paid for doing inserts or delivering the papers. I did not work for The Washington Post. In my naivete of youth, I thought I worked for a distributor. He drove a decrepit step van that rattled a great deal and emitted a foul-smelling fog. His work hours were obviously worse than mine because he would drive to some production facility in the middle of the night and fill that van with papers every morning and deliver my bundles to the corner of Murray Lane and Moss Drive. Usually he got the number exactly right. Occasionally he would "short" me. 

I was supposed to call his answering machine if I was short. He asked that I do that "immediately," but in those days making a phone call meant going back home. I would generally finish my route before returning home to make that call. I would leave the address of the house or houses that did not get a paper or did not receive an insert that day. Since I had school to get to, he would then usually make the delivery to cover the short. I came to realize that my customers were my boss more than he was. However, I also realized that without his cooperation, on-time performance of his duties, and support, I could not deliver to my customers effectively and timely. It was my first lesson in supply chain. 

Second, I learned about customers. There were people who wanted their paper on the front door mat, some wanted it under the mat so that wind would not destroy it. Some wanted it stuck in a shutter beside the front door, or between the front storm door and door, others at the kitchen door. A regular smorgasbord of choices that the customer made and which I had to remember and deliver. They did not hesitate to remind me of their preferences with a call or when I saw them monthly. 

I learned that work is hard. I was walking about two miles each day. On good days, I could carry enough papers to make it through each of my streets (they fanned out in three directions from the corner of Murray and Moss) on one trip each. On Sundays and Thursdays with the thicker paper, there was a fair amount of backtracking to the corner to get more papers. I had to rise early, carry, walk, and finish on time. It was not easy. I had to plan, execute, reevaluate. I made mistakes. I failed. And I learned. I was rewarded for success, back then an extra dollar (tip) per house might add up to $50-$75 per month, which would be about $200 today. Not bad money for a teenager.

Finally, I learned that delivering papers was only half the job. I never got a paycheck. I instead got a book of coupons/receipts. Monthly I had to walk my route in the evening or afternoon with that book and "collect." It turns out I was buying the papers from the distributor at an advantageous price, and collecting the retail price from my customers, so I made a profit. 

I also received tips, where someone would give me an extra dollar or two for the month. These were very dependent on following the instructions as to where the paper was placed each day. It also made a difference if I got certain people their papers early so they could see if before they began their long commute into the city. Of course, following Murphy's law, those who wanted early delivery rarely lived next to each other. Satisfying one often meant not satisfying another. 

It was a hard job. I thought I worked for the Washington Post, and it was not until several years later that I came to appreciate I was likely an independent contractor all along. I was pleased when I got old enough to get a "real job" and could give up the route. 

I have worked in a number of jobs and industries since then. I understand that the newspaper business has changed a lot since then also. But in New York at least it appears that newspapers can still be delivered by kids looking for that first job. In New York, this is a job you can take when you are 11 years old, subject to some restrictions.  I think I was just a bit older than this when I started my carrier career. 

According to WorkCompCentral the recently filed bill is a response to some decisions by the Unemployment Compensation officials there, essentially concluding that some carriers are employees. The periodicals, under this new law, could have independent contractor carriers if their contracts contained at least seven of the following nine terms (quoted from the article)

* The carrier could not be treated as an employee for federal tax purposes and would have to be issued an Internal Revenue Service Form 1099.
* The carrier has the right to determine the sequence of deliveries within a route.
* The carrier is not required to attend group meetings.
* The carrier has the right to engage the services of others to distribute the newspaper without the approval of the publisher.
* The carrier is required to submit written reports with respect to deliveries and internal circulation statistics.
* The carrier has the right to engage in other business activities.
* The carrier is not identified as representing the publishing house through business cards, uniforms or signs.
* The carrier has the ultimate responsibility to resolve subscriber complaints, even though the publisher may receive and resolve complaints and reach financial settlements with the carrier.
* The carrier is responsible for maintaining and insuring delivery     vehicles.

The red items I think were present in my work delivering the Post so many years ago. I had no delivery vehicles. I did turn in a work-sheet each month when I paid my distributor. Perhaps that would meet the "written reports" condition. I cannot remember what if any tax documents I received, that is 1099 or W-2. So in the end, I am not certain I would have qualified if these constraints had applied back then. However, everything but the vehicle constraint certainly could have been applied. 

I do clearly recall that I took my primary instruction from those customers from whom I had to collect money. Which of my three streets got priority on a given morning depended on their requests and propensity to tip. Whether I did inserts on Saturday afternoon or arose an hour earlier on Sunday was my decision alone (though my parents often offered "advice"). When I did my collecting was up to me, but I had to be able to pay my distributor by the due date. As I recall, his primary concern was the amount and timeliness of those payments.

One of the issues that comes up periodically when workers' compensation is discussed at national conferences is the conundrum of independent contractors. It is a potential problem when the unscrupulous use the concept to misclassify workers. They do this to avoid costs of workers' compensation and unemployment compensation, and tax withholding. Some may also do it to avoid the requirements of adequate pay and overtime found in the Fair Labor Standards Act. The misclassification issue is often discussed.

The result has been enactment of various laws that attempt to tighten the definitions of "independent contractor" and "employee." Unfortunately, some jurisdictions do not take a broad approach to this issue, and instead pass specific statutes directed at specific kinds of contractors or at certain types of business issues. 

As a result there are jurisdictions that have as many as four different statutory definitions of independent contractor. One for unemployment, another for workers' comp, another still for licensing, etc. This results in conflict and confusion. Would it be better if states had singular definitions that are comprehensible to the people that do the work? Shouldn't people that have to follow the law be able to understand the law?

I lament that newspapers today (where I live at least) are usually delivered in bags, thrown from the open window of passing vehicles (when they are delivered at all). The days of the kid with the "front-back" saddle-bag trudging through wet grass in the pre-dawn seemingly past, except in New York. That in itself is a shame. I am not at all sure I made minimum wage. I am pleased that I never learned whether I was covered by workers' compensation or unemployment compensation. 

But, I do know I learned a lot from that experience. Much of it I have been able to use since. Customers are still customers. Hard work still has value. Follow-through and service have value. But, could those lessons be learned as an "employee" with the protections of FLSA, workers' comp, unemployment comp, and tax withholding? 

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