The best interest of the interpreter, not the agency’s.

August 29, 2018 § 5 Comments

Dear colleagues:

The Association of Language Companies (ALC) effusively announced that on August 8 of this year “leaders from the language service industry gathered on Capitol Hill to sound the alarm over new <disruptive> employee classification regulations that threaten to upend the $45 billion-per-year industry’s business model”.

Over fifty individuals attended their “policy summit” to “strategize an industry-wide response to the recent California Supreme Court ruling which narrowed the definition of who can be classified as an independent contractor”.

As part of a public relations campaign, many of these agencies’ representatives have been telling interpreters that the California Supreme Court decision is terrible and, unless it is neutralized, it will effectively destroy the interpreting “industry” leaving thousands of interpreters with no work. Without even hearing the details of the decision, and knowing how it will affect them as freelancers, not as agencies, some of our good colleagues celebrated the agencies’ lobbying efforts, and even praised them for “saving our source of income”.

I agree that the Dynamex decision by the California Supreme Court will affect freelance interpreting, but I disagree it will hurt independent interpreters and it will be the end of our profession as we know it. This court decision is a rare occasion when judicial decisions favor independent professionals over the special interest groups financed by the big multinational agencies, and if independent interpreters play their cards wisely, it will bring huge benefits to them. Let me explain:

We should start by understanding what the California Supreme Court decided on April 30, 2018 in Dynamex (Dynamex Operations West, Inc. Petitioner S222732 v. The Superior Court of Los Angeles County, Loa Angeles County, Respondent; Super Ct. No. BC332016, CHARLES LEE et al., Real Parties in Interest).

In an 82-page decision, the Court rejected the Borello test to determine whether workers should be classified as either employees or independent contractors for the wage orders adopted by the California Industrial Welfare Commission, for a worker-friendly standard that may change the independent contractor market. The California Supreme Court embraced a standard presuming that all workers are employees instead of contractors, placing the burden of proof on the agency or other entity classifying an individual (in our case the interpreter) as an independent contractor. For those of you who practice court interpreting: This is similar to the prosecution burden of proof in a criminal case. Although not subject to a “beyond a reasonable doubt” standard, companies, agencies, and other entities must overcome the legal presumption of employment (just like the presumption of not guilty in Criminal Law).

But, where does this decision originate?

Dynamex is a nationwide same-day courier and delivery service offering on-demand same-day pickup and delivery. Before 2004 Dynamex classified all of its California drivers as employees, but staring in 2004 they converted all of their drivers to independent contractors to save money on employee benefits and expenses related to income tax retention. A year later, a driver named Charles Lee entered into an independent contractor written contract with Dynamex. After leaving his work at Dynamex, Mr. Lee filed a class-action lawsuit on his own behalf and that of other drivers in a similar situation against Dynamex. During their time working for Dynamex, these workers had to work during the hours and according to the schedule unilaterally set by Dynamex; they received direct and strict direction from Dynamex in a subordinate relationship instead of an equal-to-equal relationship as expected by independent contractors, and the drivers could not work for someone else because they were always working for Dynamex under the described conditions. They alleged that Dynamex had misclassified them as independent contractors in violation of State law, including various sections of the Labor Code and the Business and Professions Code Section 17200 (engaging in unfair and unlawful business practices).

The case went through a long litigation in California until it finally reached the Supreme Court where the Court framed its decision by broadly characterizing the misclassification of independent contractors as harmful and unfair to workers, honest competitors, and the public. The Court did a long and detailed analysis of precedent, analyzing Borello, Martínez and Ayala v. Antelope Valley Newspapers, Inc. (59 Cal. 4th 522, 527. 2014)

The California Supreme Court rejected Dynamex’s arguments for applying said previous cases. Instead, the Court adopted the ABC Test to determine if an individual is an employee or an independent contractor. Under the test, a worker will be deemed to have been “suffered or permitted to work”, and thus an employee, unless the employer proves:

  • A. That the worker is free from the control and direction of the hiring entity in the performance of the work, both under the contract for performing the work, and in fact.
  • B. That the worker performs work that is outside the usual course of the hiring entity’s business; and
  • C. That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Each requirement needs to be met for the presumption that the worker is an employee to be rebutted, and for a court to recognize that a worker has been properly classified as an independent contractor. If a worker is classified as an employee, the employer must pay Social Security and payroll taxes, unemployment insurance taxes, state employment taxes, worker’s compensation insurance coverage, and all Labor Law rules and conditions regarding wages, vacation, sick leave, overtime, maternity leave, etc.

Bringing the Court decision to the interpreting field, we find that most agency-freelance interpreter relationships will fail the ABC test.

Agencies would fail “A” because they micromanage interpreting assignments. From checking in and out when arriving or leaving the site of interpretation, to endless paperwork required for payment and other “rules”; not forgetting ridiculous dress codes, and other one-sided rules such as not talking with the client about interpretation.

They would also fail “B” because it would be extremely difficult to argue that the fact that an interpreting services agency is hiring an interpreter as an independent contractor, constitutes a service outside the course of the agency’s business; and

They would fail “C” because they hire the interpreter according to such schedules they cannot render the services anywhere else, they make them sign non-compete contracts, force them to hide their personal business from the client so the agency does not lose the client. In other words: an outsider could not see the difference between a staff interpreter working side-by-side with an independent contractor.

Now you know, the “industry leaders” are spending their money in lobbyists so they continue to pay rock bottom fees to most interpreters with no risk. They keep the money and the interpreter gets close to nothing, without having a say.

I don’t want you to think that all agencies are bad either; I happily work with some who respect me as a professional. I am not saying that freelancing is bad.  I do not want to be considered an employee of any agency or other entity.

I do not support what the multinational agencies are doing for three reasons: First, because I want to be the one who decides if I want to be an independent contractor or not. I do not want to leave the decision in the hands of greedy one-sided “industry leaders”. Second, I think that been treated as employees would be great for many colleagues who could not succeed in the freelance market. They would get a decent wage, and many other social protections that otherwise they would lack if they continue to freelance for those agencies who bring in the money for the shareholders (nothing wrong with that) and pay very little to the interpreter, so little it is not enough to afford a decent health insurance coverage and a retirement plan (this is wrong). My third and very powerful reason not to support this lobby effort is very important:

Now that there is a court decision that favors independent contractors in California, interpreters should seize the moment, take advantage of this leverage, and negotiate a system that benefits all professional interpreters: those who want to be staff and those of us who will continue to freelance. A system that keeps agencies in business, but eradicates the one-sided system most interpreters (out of necessity or because of lack of negotiating skills) endure today.  I propose this:

Raise our voice so the non-interpreters in the field (aka: the “industry leaders”) do not get away with passing one-sided legislation as they are trying right now. We have to act with energy and decision because they are pursuing an option as nefarious and unfair as the “Major League Baseball” exception Congress granted once and landed thousands of professional ballplayers in servitude where they could be bought, traded and sold having no input.

These “industry leaders” argue that Dynamex should not be applied to them, because they are not part of the “gig” economy. They told Congress they “exclusively” work with “…highly-trained and educated professionals whose success is dependent upon the highest quality of work…” adding that “…to be a professional linguist takes years of education and training…” They mentioned the State Department interpreters as an example. I wonder why they did this instead of mentioning the many interpreters they hire without a college degree but with a high school diploma, or how they justify laborer pay for such illustrious “linguists”.

We do not have the funds to lobby against this multi-headed hydra, and we cannot go to our largest professional association because it will not go against the interests of its corporate members, and they may even share the same lobbyists as the “industry leaders”. What we have is the right to testify in congress, appeal to the ACLU for help if needed and pertinent, and most important: We have our professional services and skill as leverage.

I wonder why we need to change the law and attack the Supreme Court decision. If agencies really want to work with the best, professional, trained, and experienced, they should have no problem complying with the ABC criteria. The problem is, dear colleagues, that they do not want the brightest professionals, they are too expensive. They want the high school diploma new paraprofessional interpreter who will work for a pay similar to Wal-Mart’s, and to avoid mistakes, she must do it under micromanagement conditions. They do not want the best because they would risk to lose the client. They want somebody so afraid of losing this laborer’s salary job, that he will never dare to tell the client he interprets independently from the agency, even when the client already knows it and sees this situation as ridiculous.

Interpreters, however, could join the “industry leaders” as a common front to pass legislation fair to all parties. Instead of eliminating the criteria in Dynamex, a fair legislation should allow for interpreters to opt out of the employee reclassification and remain as freelancers if they do it freely, with no coercion by the agency or other entity retaining their services, and both, the written contract and de facto performance demonstrate this was not a sham by the agency, but a real independent contractor. Interpreters could then negotiate with the retaining agency a professional fee that truly depicts their freelancer status and not an employee working under serfdom conditions.

At this time in California, and unless the law changes, interpreters should demand compliance with the ABC rule. As of today, with the Supreme Court decision as the supreme law in California, compliance protecting interpreters and our profession is possible:

“A” can be overcome by negotiating a written contract that clearly leaves the interpreter free of the agency’s control. It clearly states that interpreters will deliver the service they are retained for, but all conditions to implement the service and fulfill the obligation are left to the interpreter. No more stupid paperwork that requires hours of unpaid time; no more micromanagement in the contract and in the real world.

“B” will be more difficult to overcome, especially for the smaller agencies because the multinationals have so many other businesses through subsidiaries it will be costly, but possible to solve this requirement. Remember that it is the agency’s burden, so you need not worry about this one.

“C” is your real leverage. The agency cannot overcome this requirement without the interpreter’s cooperation. You will have to show that you have a website, or an office where you offer your services to other prospective clients; you will show you are a real independent contractor by showing the authorities how you are not contractually bound to secrecy when a client asks you for your services during an assignment with the agency. More important: without your cooperation, the agency can never prove this requirement.

We must educate ourselves so we do not jump up and down as cheerleaders to support this public relations propaganda campaign. Seize the moment and change the landscape. Make these “industry leaders” live up to what they preach and, using their own words, demand they only hire the highest quality of professionals with years of education and training. We can support them in their lobbying efforts, but only when all professional freelance interpreters are paid professional fees. Do not listen to those colleagues who live in fear, worship these agencies, and think they are doing them a favor by hiring them to work. There cannot be an interpreting agency without interpreters. There can be interpreting services without agencies. I now ask you to share your thoughts with the rest of us, and please be advised that comments defending agencies will not be posted. They have plenty of media outlets to proselytize. Here we want to hear the voice of the interpreters.

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§ 5 Responses to The best interest of the interpreter, not the agency’s.

  • Thanks for sharing these important developments. Great work as usual!

  • Right on target, Tony. The same arguments apply, of course, to service providers for translation. With respect to “A”, I have been heartily sick for years of the improper attempts of agency personnel attempting to micromanage the execution of a translation assignment, specifying work methods and other details rather than focusing on the required deliverable. Even where this is not utterly ludicrous (like some “project manager” barely out of diapers demanding that one use Trados to translate a scanned fax document of nearly illegible quality), it simply violates the basic standard of independent contracting in every jurisdiction where I have lived.

    Some agencies maintain significant internal staff for translation work, and enforcement of the ABC standard everywhere would overcome the unfair disadvantage these companies suffer for taking on the responsibility of the formal employee relationships compared to the practices of their slash-and-burn exploitative competitors.

  • Kate Yemelyanov says:

    Valuable perspective. Thank you!

  • Sylvia J. Andrade says:

    The ways I am trying to overcome the presumption are that I do have a business license, the business is a partnership, I also do translation, tax preparation and representation (I am an EA) and notarization and that most of the agencies I work for do allow me a good deal of independence. I also have a lot of direct clients. The problem is the elimination of mileage, professional education, office expenses, etc. for w-2 employees. I suggest that anybody considered an employee by IRS, due to this, use the statutory employee designation to get around this, whether or not the agency has marked this on any w-2. The way this works is that you include the w-2 information on the tax form, but also include a Schedule C, self employment form. If you have no other income, you put statutory employee as to the name of the business, 0 as to the amount of earnings, unless there is other income and you can challenge this. You then put in your expenses — mileage, conferences, etc. You can’t get the 20% deduction by doing this, but it should help– especially the mileage.

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