New Guidance on “Contractors” Impacts Affiliate Marketers

department-of-labor

Lately there has been a lot of talk regarding the distinction between employees and independent contractors when it comes to services like Uber and Lyft. However, the guidance being handed down could very well impact the way that many affiliates and OPMs are managing their businesses.

New Guidance on Employees Versus Contractors

On July 15, 2015, Administrator David Weil issued a Department of Labor’s (DOL) Administrator’s Interpretation of the Fair Labor Standards Act (FLSA). The 15 page document speaks specifically to the misclassification of employees as independent contractors. The main concern of the DOL is that “some employees may be intentionally misclassified as a means to cut costs and avoid compliance with labor laws.”

The DOL has historically defined “employ” as “to suffer or permit to work” and uses a more recently adopted “economic realities test.” That test uses the following factors, which are analyzed against each other with no single one being determinative.

(A) the extent to which the work performed is an integral part of the employer’s business;
(B) the worker’s opportunity for profit or loss depending on his or her managerial skill;
(C) the extent of the relative investments of the employer and the worker;
(D) whether the work performed requires special skills and initiative;
(E) the permanency of the relationship; and
(F) the degree of control exercised or retained by the employer.

One of the most important paragraphs in the document explains that the label that the employer uses or the agreement between the employer and the worker are NOT determinative. It’s not enough for the employer and the employee to just agree as part of their contract or negotiation that the worker is an independent contractor. The factors in the economic realities test will still prevail.

Another paragraph that is particularly important in our industry describes the element of “degree of control.” Simply having workers who are free to work from home and set their own hours with little supervision does NOT make them independent contractors. The control factor has to be weighed against the other factors.

The document concludes by blatantly summarizing that “most workers are employees under the FLSA’s broad definitions.”

How It Impacts Affiliate Marketing

It’s no secret that the many people in our industry work in a consulting or contract capacity quite frequently. There are quite a few instances that would actually fall under the “independent contractor” status such as guest writers, graphic designers, programmers, and social media or SEO experts.

However, those lines might very easily be crossed if the person doing the work is either working exclusively for one company, is performing work that is integral to the company, or the company is relationship has the signs of permanency (perhaps the giving of executive titles or listing the workers on the employer website).

What’s the difference how you classify workers if both of you are fine with it? Apparently quite a bit. There are major differences in the assessment and collection of taxes, unemployment, overtime policies, and minimum wages.

Right now it does not look like online marketing is being closely scrutinized for labor violations of this type, but as our industry continues to grow, it’s likely that we will become a bigger part of the discussion.

If you are employing people in any way, it’s a good idea to evaluate your relationships and determine whether people you consider to be contractors might actually be employees. 

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Fiverr Fail That Turned Out Perfectly

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A few months ago I decided to send out some treats to members and friends of Sunshine Rewards. My plan was to put together a small packet of summer-themed goodies and include a handwritten note for each person. I wanted a card that truly represented Sunshine Rewards (and me), so I didn’t want something straight out of Hallmark. Instead I decided to try Fiverr.

My plan was to give the exact same instructions to 3 different designers and then use whichever design I ended up liking best. Ashleigh spent quite awhile pre-screening designers to narrow it down and we felt pretty confident about the 3 we ended up with. I knew I wouldn’t love them all, but I was not at all prepared for what I received.  Here are the EXACT instructions I gave:

Greeting card graphic with the following message

Wishing You a Summer Filled with Sunshine

somewhere on it as well as

#SharingSunshine

Would like something like a person smiling and holding our logo (hand drawn person or graphic-based). I like the “bursts” at the top and bottom of this card:

http://graphicriver.net/item/baby-shower-invitation/7882323

And this is the first result that I got:

My Fiverr FailNow you might have to look at it twice to catch it. I’ll sit here while you go look at the image again….

Find it? Yep. “Somewhere On It As Well As.”

Looking back at my instructions, I guess I should have been more clear. On the flip side, I ended up with a result from another designer that I loved so much I almost cried. So apparently SOMEONE understood me. And the 3rd designer sent me something passable but not nearly as perfect as the 2nd.

In all fairness, the first designer asked if I wanted changes or corrections made. I could have pushed back. But it made a better story to keep it this way, and I was already starting production of the cards from the 2nd design. So I just let it go. I ended up paying the 2nd designer an extra $15 for a few tweaks and a .psd copy of the image so I can modify and use it in the future. In the end, it cost me $30 for a custom designed card that I really loved, which isn’t too bad. I would still recommend Fiverr for things like this, but with the caveat to be VERY careful how you phrase your request!

Want to see the final card? If you know me, you know it couldn’t get more perfect that this.

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Blogger Involved in FTC Lawsuit for Failure to Disclose

FTC Amberen LawsuitI was really excited about turning 40 because I kept hearing commercials on XM Radio about this terrific product specially made to help women 40 and over lose weight through balancing their hormones. Sadly, a little over a week before my 40th birthday, my bubble was burst when I saw that the FTC had filed a lawsuit against the company who markets the product, Amberen, for misleading claims. But it’s a good thing that I was paying attention to the product because it turns out that the suit actually may have an impact on performance based marketing because a blogger was involved.

Basics of the Case

Amberen is a dietary supplement. The FTC alleges that Lunada Biomedical (who markets and sells Amberen) engaged in “unfair or deceptive acts or practices” in the way that it marketed the product in the U.S. Specifically, they claimed that Lunada made unsubstantiated claims about weight loss and other health benefits of Amberen and misrepresented the findings of medical studies. In addition the “risk free trial” claims were false.

Carol’s Blog

One of the places that Amberen was marketed was through various websites including “Carol’s Blog” (www.carolsblog.com). Carol was actually the president of “International Marketing Company” (presumably an agency) and not only agreed to write a blog that would promote them but would also appear in some of their other advertising. Carol was paid a flat rate of $2,000 per month plus various other fees and reimbursement costs.

According to the suit, the blog “appeared to be a personal account of [Carol’s] experiences with menopause, written in the first person and featuring [Carol’s] name and photo.” There was no disclosure on the site that Carol was being paid to promote Amberen on the blog.

The FTC claims that Lunada “failed to disclose, or disclose adequately, that certain of the consumer endorsers…had paid relationships with Lunada or were compensated in connection with their endorsement” and that the relationship would be “material to consumers in deciding whether to purchase Amberen.”

What Does This Mean for Affiliate Marketing?

Although Affiliate Marketing is not directly implicated in this case because Carol was paid a flat rate rather than on a performance basis, there are definitely some interesting things we can pull out of this case.

Note: These are all my opinions! Although I am a lawyer, none of them should be used as legal advice. They are merely my observations based on my studies of the law and my knowledge of blogging and affiliate marketing.

  • Merchant is once again held liable. In this case, even though the blogger is mentioned throughout the case and plays a part in the majority of the “deceptive practices,” the company producing and marketing the company is the one being sued by the FTC. I have not seen anything to indicate that Carol is being sued.
  • The blogger’s name is now associated with deceptive practices. Even though the blogger was not named in the suit, her name and her company are now showing up in search results related to FTC lawsuits. As bloggers, all we have are our reputations. Once you are associated with something like this, it’s almost impossible to make it disappear online.
  • Disclosure standards reiterated. The court specifically referred to “failed to disclose” and “material relationship.” These are the words that we are consistently seeing in the Guidelines from the FTC and any similar suits. They should be the basis of your own disclosure standards whether you are a merchant, an OPM, or a blogger.
  • Material to consumers. In this case, the FTC believes that Carol’s personal style of blogging (and perhaps her status as a nurse?) were enough to convince people to buy the Amberen. This is important when it comes to determining when something would be considered an endorsement that would convince someone to make a purchase based on your recommendation.
  • Agencies are likely liable. Lunada acted as both the distributor AND the marketing company in this case. In our lingo, that means they were both the merchant and the affiliate manager. They started the relationship with Carol. They gave her content ideas and reviewed the posts on her site. It’s the obligation of the merchant (or their agent) to monitor the content AND the disclosure for compliance.

Resources: For more information about the case, you can read the FTC release that summarizes it or the full complaint including exhibits. Although the blog is no longer online, you can see it using the Wayback Machine. Read more of my analysis of the .com Disclosures and how they apply to affiliates.

Have you as a blogger, merchant, or OPM taken steps to make sure that you are complying with the FTC Guidelines? Or are you weighing the risks and deciding that it is not likely you would be sued anyway?

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Quick Check to See If Your Site is Mobile Friendly

Is My Site Mobile Friendly

Everyone is talking this week about Google’s threat to change their algorithms to start penalizing sites that are not mobile friendly. I started getting emails to my Webmaster account several months ago about the need to update my sites. Some sites we were already working on but others we were a long way from touching.

If you want to know if your site is mobile friendly, Google will be happy to tell you. Just go to their Mobile-Friendly Test page and put in your site. You will get the response above “Awesome! This page is mobile-friendly.” if you have done a good job. If you haven’t, you will get the response below that details what your problems are and some ideas of how to fix them.

Not Mobile Friendly

 

Interestingly, you can actually look on a page by page basis rather than just your entire domain. For example, my site Sunshine Rewards was re-designed to be responsive, but we have not paid to upgrade our Vbulletin forum. So our forum shows up as “Not mobile-friendly” when I run the test on it, even though the rest of the site is fine. It will be interesting to see if Google is really going to change on a page by page basis or rather will penalize the entire domain. (We’re working on it!!)

So what if you have a bunch of old blogs and don’t have the time or money to upgrade them all quickly? One suggestion is to install the WP-Touch plugin. It will make your pages instantly mobile-friendly. I installed in across 3 different blogs in less than 10 minutes. It is not a perfect solution, but it does solve the problem for now until I have time to completely upgrade my themes (I’m switching from Thesis to Genesis).

Once you install WP-Touch or upgrade your theme or whatever and have run it through the Google check to make sure that Google thinks it is okay, it’s a good idea to test some interactions as well. There are some really great Chrome Extensions you can use to bring up your site the way that it would behave on various phones and tables. I like both Mobile/RWD Tester and Responsive Web Design Tester. I am sure that there are a lot of other similar ones.

Are your sites all ready for the big algorithm update? What have you done to upgrade them or what (if anything) are you planning on doing? 

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Need a Mailing List? Aweber Free Trial

Aweber Free Trial

I’ve been using Aweber for my mailing lists across many of my sites for a number of years. I have an internal list processor that I use for Sunshine Rewards (combined with Mandrill for delivery), but I use Aweber for everything else. I know a lot of affiliates and bloggers go back and forth on which newsletter companies to use, but here are some of the reasons that I keep my list on Aweber.

Customer Service

I won’t lie and say that I haven’t had any problems at all with my newsletters. When I have had problems, Aweber has given me MULTIPLE ways to contact them. I’ve talked to them via email, on Twitter, and even on the phone when I was really having problems. When I am paying for a monthly service, I want to be able to get in touch with someone to get my problems resolved! So far, they have helped me resolve every problem that I have had.

Affiliate Marketing

Aweber is a pretty integral part of the affiliate marketing community. Their terms (unlike some other newsletter providers) do not exclude affiliate marketers. In fact, they exhibit and speak at Affiliate Summit, have their own internal affiliate program, and even allowed me to moderate a panel on affiliate marketing at their first conference last year (ASCEND Summit). When affiliate marketing is your business, it’s good to have partners that understand as much about it as you do.

Reputation

I’m not alone in my love of Aweber. I see so many of my friends using them and when I ask other people what they use, Aweber is one of the top 2 or 3 that always get mentioned. The ones who do NOT use Aweber usually say it is because their list was not double opt-in. But Aweber has done away with the requirement that imported lists be double opt-in. So I bet even more people will now be switching.

Tools

I’m not incredibly high tech, but I have some high tech demands for my sites. I need WordPress integration, widgets, light boxes, blog broadcasts, and more. In fact, I even found a way to turn my deal posts in my VBulletin forum into an RSS feed that is now a Daily Deal email on Sunshine Rewards. Talk about repurposing content! (You can see how I did that in my post Combine Tools to Streamline Work and Reach Customers.) I also like the archive pages for my newsletters and the ability for them to be shared easily.

Price

When I started out, my lists were VERY small. It was nice to be able to pay a small monthly fee when I wasn’t making much off of my lists. As my lists have grown, I have not moved up very much in my monthly fee but I have been able to really expand to offer multiple lists for different sites. I can control my costs by deleting out unsubscribes, undeliverables, and people who just aren’t interacting with the emails (especially for my niche sites where I use contests to generate signups).

And what is the very best price? Free!! Because that is how much their trial is now. You can sign up for free and get in there and really get your hands dirty seeing what it can do for you. You actually get an entire month free (which is longer than a lot of free trials these days). Or you can take an even bigger discount by getting a whole quarter for only $32.67 (versus $49).

So what are you waiting for? Jump in there and grab your free trial and see if Aweber is the email marketing solution for you.

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