The New York Times details the mis-categorization of working stiffs:
Federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors ...
... Many workplace experts say a growing number of companies have maneuvered to cut costs by wrongly classifying regular employees as independent contractors, though they often are given desks, phone lines and assignments just like regular employees. Moreover, the experts say, workers have become more reluctant to challenge such practices, given the tough job market.
Companies that pass off employees as independent contractors avoid paying Social Security, Medicare and unemployment insurance taxes for those workers. Companies do not withhold income taxes from contractors’ paychecks, and several studies have indicated that, on average, misclassified independent workers do not report 30 percent of their income ....
I've had a number of visual effects artists, storyboard artists and designers complain to me about this practice over the years. I've even known of assistant animators, working in-studio, who have been labeled as "independent contractors" by a company in order to get around taxes and unemployment.
Now, of course, we have outfits like MBO striving to be enablers for firms that don't want to be on the hook for taxes and unemployment benefits for the people they engage. The tap dance goes like this:
"Heey now! You're a happening cat with places to go and people to see! You don't want to be pinned down with that employee stuff! You need your free-dom! We'll help make the indie thing work for you! Just give us 5% of your cash flow! ..."
Nice work if you can get it, but here's the way it's supposed to work: If you're working on site, or taking direction for the work performed, or using the company's equipment, you're an employee.
There are certainly bona fide independent contractors out there, and there are certainly independent contractors who make good livings. But let's face it, there's a lot of cheating and corner-cutting being done by various companies, and lots of workers are being short-changed.