How does the "B" in ABC affect me as someone who does software engineering contracting on the side sometimes for tech firms? I've got a decent network out here in SV, and sometimes a startup facing an urgent deadline will hire me to do some code writing for a couple of weeks. This is work I do outside of my normal 9-5. But now it seems I can't do this without being classified as an employee. That really sucks.
I think it's about the service that the contracting company does. The idea being that the company should only contract for things that are different than what it normally does. IOW, if you have a 100 SW developers in SV that are employees, you can't also have a bunch of contract SW developers in SV.
For you, and others in this type of role, it likely makes the most sense to form a LLC or other corporation, and do a corp-to-corp contract. If this ruling holds, companies may even start to require that.
Unfortunately for those in California, CA requires an $800/year minimum fee for a corporation. It’d be nice if these changes forced a change in that law.
(By the way, just to head off a common misconception: You cannot just “incorporate somewhere else” to avoid the $800 fee. If you are a California resident doing work in California, even if you have a “foreign corporation”—California’s term for corporations from other states—you must register it in California and be subject to the $800 fee.)
