Rider Contracts

[Christian]

I stumbled across this in one of the latest articles on velonews, an interview with David Lappartient, president of the French cycling federation:

“It costs 30-40% more for a team at the same level than it does abroad,” (Lappartient) explained, “because payroll taxes are heavy. We are one of the last countries where the riders are actually employees of their teams, in other countries they are self-employed.”

Read more: http://www.velonation.com/News/ID/6...e-World-says-FFC-President.aspx#ixzz16iWgoJea

What exactly does that mean, how does that work?

I know some riders earn a lot on the side by doing commercials and such, but I was under the impression that teams such as Sky, Katusha or Luxembourg Project attract riders by offering them a lot of money ... so if they're not the employers, who is?

Does anyone know which teams/countries Lappartient is referring too, and which ones actually are the employers of the riders?

 

[ingsve]

I asked a similar question with regards to taxes a while ago and the way I understand it is that on most teams the riders are selfemployed and then their services are hired by the teams they ride for. This means that the teams are not left with paying social fees etc that various countries have on any type of employment.

 

[Zinoviev Letter]

What exactly does that mean, how does that work?

It seems that he's saying that riders are technically contractors rather than employees on a lot of non-French teams. That's a fairly common practice in some industries.

 

[brianf7]

From what I was told by several top pros some time ago is that riders setup their own private company with limited liabilitys . they employ a manager who dose all the talking for them as do movie stars.
They pay tax on prifit of the company and claim everything they spend on cycling on their tax.

 

[Anonymous]

Common system and makes it a lot easier. Means the riders are responsible for their own taxes based on where they live (bear in mind most riders have additional sources of income as well, sponsorship, race appearance money etc etc). Far easier than the team employing them all and having to pay contributions on riders from multiple nations. Same in a lot of sports and industries.

 

[fatandfast]

I stumbled across this in one of the latest articles on velonews, an interview with David Lappartient, president of the French cycling federation:



What exactly does that mean, how does that work?

I know some riders earn a lot on the side by doing commercials and such, but I was under the impression that teams such as Sky, Katusha or Luxembourg Project attract riders by offering them a lot of money ... so if they're not the employers, who is?

Does anyone know which teams/countries Lappartient is referring too, and which ones actually are the employers of the riders?

in the US you get a 1099 form that shows how much income you have recieved from the person/team/company paying the contract. You have to pay social security and disabilty no matter what, but if you live outside the US for 350 days you don't have to pay income tax. In France a comapny/team has to give you an employment agreement and pay your health tax,retirement tax,church tax,school tax,income tax,vacation tax and if it is not paid they come after the company/team. In the US it's just the form that says the employee/contractor is responsible for paying all taxes.

 

[Christian]

It seems that he's saying that riders are technically contractors rather than employees on a lot of non-French teams. That's a fairly common practice in some industries.

That's really interesting, I never thought of it that way! If this is such common practice as Lappartient suggests, then I don't think managers should act all offended when their riders are bought out of their contracts ... they're "just" contracters, after all!

 

[El Pistolero]

Reminds me of something that happened in Belgium recently. A company wanted to give their workers the status of laborers instead of employers, so they had to pay them less.

I guess that could have something to do with it.

 

[Christian]

Reminds me of something that happened in Belgium recently. A company wanted to give their workers the status of laborers instead of employers, so they had to pay them less.

I guess that could have something to do with it.

I don't know, I had the impression that, with the arrival of teams such as Katusha, Sky and Luxembourg Procect, salaries were generally increasing in recent years. I also think riders such as Contador and Cancellara, who are simply off the chart might have something to do with it.

Of course I have no way of knowing, it's just the impression I got

 

[ergmonkey]

I don't know, I had the impression that, with the arrival of teams such as Katusha, Sky and Luxembourg Procect, salaries were generally increasing in recent years.

I think you misunderstood the point. It's not that "salaries" to riders are being decreased by treating them as contractors; it's that it costs less for the team to pay the same rider salary.

The difference is analogous to paying for something out of pre-tax income as opposed to paying after taxes. For instance, at a 30% tax rate, you would have to earn 100 before taxes if you wanted to then give out 70 after taxes. With no taxes, on the other hand, you would simply have to earn 70 in order to pay out 70. Thus, the second method is cheaper.