How many of self-employed (or non-self-employed) out there have to deal with "employers of record"? I'm not in IT, but I am in an industry where predatory third-party employers act as a means for companies to pass their payroll taxes, workers comp insurance, etc. on to their employees. My understanding is that this sort of thing is prevalent in IT as well, so I'm curious how many slashdotters who are in IT have to deal with this.
For those who are unfamiliar, the grift is this: Company A, rather than hiring worker W, instead contracts with Evil Employer of Record E. E "hires" W, and "loans" them out to A. Since W doesn't work for A, A doesn't pay payroll taxes, workers comp, etc. (A significant amount - something like 10-20% of salary.) This is where it gets fun: E, which is now responsible for those costs, passes them through to W by deducting them from W's pay. Often, they'll charge a 2% fee on top of this for the privilege.
All of the costs of being a 1099 contractor, with vastly diminished opportunity for tax deductions. Plus you pay the max % for unemployment tax and workers comp (those costs are on a scale, and self-incorporated person would generally come in at the bottom of that scale instead of the top).
In my industry, a lot of foreign visa workers and the less tax-savvy are caught in this scam. And the gov't (specifically, the state gov't) does nothing to stop it, because they're getting unemployment tax that they wouldn't get if the same workers were 1099.