Downtown Working

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September 8, 2003 // UPDATED 11:03 am - April 30, 2007
By: Elana Centor
Elana Centor

So long freelancers, hello 'just-in-timers'

Where have all the freelancers gone? Like switchboard operators, key liners and typewriter repairmen, freelancers are becoming an endangered species.

In the '70s and '80s, you could make a great living as a freelancer. Depending on your service, you could be hired for long-term or short-term contracts with businesses and/or agencies -- you could even pick and choose whom you wanted to work for and what you wanted to charge.

Today, however, freelancers are finding it increasingly difficult to work directly with corporations. Instead, they now have to go through a third-party employment service or consider incorporating as their own company.

The change stems from a little lawsuit Microsoft lost in 1999. Lovingly referred to as the "other Microsoft lawsuit," it forever changed how freelancers get hired.

For years, Microsoft, like many companies had hired independent contractors (freelancers) for long-term projects. Turns out the courts decided that these independent contractors were really "common law employees" and were therefore eligible for participation in the company's 401K and stock purchase programs.

To avoid any appearance of wrongdoing, corporations stopped hiring freelancers -- well, sort of.

Carol runs a temporary employment service and has found that many of her clients "feel they can no longer work directly with an independent contractor because of the Microsoft lawsuit. So even if they used to hire freelancers directly, they now have those same people but go through us to avoid any appearance of wrongdoing."

This basically translates into a pay-cut for people formerly known as freelancers. Instead of getting a check directly from the corporation, they are paid by the employment agency. The agency not only sets their fee or rate for these "just-in-time employees" -- something the independent contractors used to do -- but takes their cut from it, too.

Top off this pay-cut with a dwindling supply of work over the past few years and it should come as no surprise that many of the people Carol used to place have opted for different careers.

"I know of some very high-level talent that are working in places like Starbucks while they continue to try to find freelance work. I know several others who have decided against returning to agency work altogether for the stability of working at Home Depot or driving a truck for UPS," Carol said.

Perhaps those workers will soon be tempted to return from behind the counter and into their former professions. If the last four to six weeks indicate a trend, the Minneapolis job market may just be easing up a bit.

"We're cautiously optimistic," said Andrew Schmitz, President and COO of Jean Thorne, Inc. 901 Marquette Ave. Jean Thorne, Inc. focuses on placing both temporary and permanent employees into office support and call center positions, they also specialize in staffing financial departments.

"All of a sudden, our temp-to-hire placements have picked up," Schmitz said. This means that clients who wanted to get projects rolling and hired temporary staff to complete them are now hiring many of them on as full-timers -- something they didn't think they could afford a few weeks ago.

While this recent surge may forecast better times, Schmitz said he believes it will be a long time before we return to the good old days of freelancing. "My personal opinion is that the bad economy only reinforced just-in-time employment and staffing temporary employees."

Don't take "just-in-time employee" to be simply an updated term for "freelancer." There's a big difference. Freelancers ran their own show. They were independent. They negotiated everything -- fees, deadlines, "deliverables." Today, in order to work, a just-in-time employee, has to be exactly that -- an employee. For a freelancer to be considered an employee is the ultimate oxymoron.

If you have a good workplace dilemma or just a good story to tell, please contact Elana Centor at mailto:ecentor@mn.rr.com, or leave her a message at 825-9205 (then hit 102 for her voicemail). You can remain confidential, as can your company.