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Comment by the_mitsuhiko | Hacker News Reader

I don't get how there is not a general insurance system for people losing their jobs unexpectedly which pays out three months of similar or something similar.

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There is "Unemployment Insurance" in America, and companies have to pay into it for their employees by law. Any employee who no-fault loses their job can draw from it.

This company used a "cheat" in the legal system in America for labor where they illegally labeled their employees as "independent contractors", which are treated differently under the law. These contractors aren't "employees" and aren't eligible for unemployment (because they were not 'employed', they were contracted).

For example if you were to hire someone to work on your kitchen for 1 week, you wouldn't pay unemployment insurance on their behalf. If they were self-employed doing remodeling/contracting, they would be expected to pay their own unemployment insurance.

It is unfortunate how the illegal abuse of "independent contracting" in America has created these terrible situations though.

this is also a thing in europe, with similar consequences.

Depends on the country. In NL, the legal requirements for independent contractors are quite strict. As an independent contractor, you must:

- have multiple sources of income/contracts (at least 3, and no single contract may be worth more than 70% of your total income)

- have complete control over how to do your job (i.e. the hiring party can only tell you what to do, not how or when to do it)

- actively promote your own company (acquisition, marketing efforts)

- invest in your own company: your tools (laptop, software licenses) must be your own (they are tax-deductible)

- have your own liability insurance.

If you fail any of these conditions, the tax auditor may classify you as an employee regardless of what the contract says, and both you and your employer may be fined (depending on whether they see you as a victim or an accomplice).

Is this still true? Didn't that "model contract" mess replace all of this by, well, nothing really?

This is nearly all true in America too (not sure about a 3 source/70% rule) but in order to get around it, the conservatives have massively underfunded the tax organization / auditors to the point where they basically cannot even competently audit the criminals, so the average businesses are un-audited by default.

The employees had to have known they were contractors though.... at least in my expense that is no mystery.

Well then you have to choose between turning down the job for the chance you'll need unemployment insurance or taking the job because you need a job. The rational choice is to take the job regardless.

Depends on your options.

The game industry seems pretty terrible to their workers.

Either way the employees had to know.

This kind of 'be a contractor or gtfo' thing is not in any way limited to the games industry.

Sure, but that doesn't change anything.

Not always, at least here in Oregon I received unemployment after being let go from a contractor job. The state tax department had to rule whether or not my contracting work qualified though. They used a couple of factors: whether or not I had set times to be at the office, whether I had to be at the office, how many hours I worked, if they gave me hardware for working there - basically if they were "cheating" as you said.

indeed, in the UK if there's not sufficient money to pay statutory redundancy then there's a national fund to make sure the employees get their legal entitlement

(and if this happens the company's directors are likely in the shit as they've probably been trading while insolvent)

Move to a differenz country ;) Germany has this automatically, it‘s called „Arbeitslosengeld“.

And if your employer goes bankrupt, there is an additional 3 month of guaranteed salary ("Insolvenzgeld", by the state) afaik.

In Europe its called "Social Security"

No, it’s not. In Sweden unemployment insurance and socialbidrag are very different concepts. The latter is very meager and has intrusive checks.

No. Actually in most countries "social security" and "unemployment insurance" are 2 different things. Social security IIRC is mostly there to take care of medical expenses, including for employed people.

Social security generally pays unemployment benefits too. How that works is obviously very dependent on the country. Also, at least in the UK there are national funds available to cover redundancy.

And yes, I was being facetious - I'm aware unemployment benefit is often pretty low and that actual income protection insurance does exist.

" How that works is obviously very dependent on the country"

True, so why make a broad statement about a continent that includes 30-ish countries, each with their own system, only based on "the UK-way"?

Nope, I've lived in 3 different EU countries.

So 10% is enough of sample size to infer a general rule? Also, your first comment was about "Europe" not "EU".

In the US, there's automatic unemployment insurance. It's run by each state and the programs differ. I believe the federal government has significant influence as well. I don't know anything about the California program but here's what looks like the relevant web site: https://www.edd.ca.gov/unemployment/

These people generally should be eligible (though again I don't know anything about the California program).

Edit: Oh I see a better answer to this. The other post brings up a very important point that people classified as independent contractors are not eligible.

You mean like this: https://www.sovereign.co.nz/life-and-disability/pages/income... ?

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