Section 1706 was originally sponsored by Sen. Daniel Patrick Moynihan of New York, who hoped that forcing highly paid software developers to become employees would limit their ability to take advantage of tax breaks for small businesses. Ironically, it was also Moynihan who, when a study determined the law was not bringing in the desired tax revenue, tried to have it repealed a year later. He failed, and it's still on the books today.

Employees typically do not  have to pay for their own health insurance, the way contractors do. Individual health plans generally offer worse coverage than group plans, and they can be incredibly selective about who they allow to join. Those who are accepted can expect their premiums to rise every year, often by double-digit percentages. Given these conditions, developers who have families to support or preexisting medical conditions are well advised to hang on to their salaried jobs for dear life rather than run the gauntlet of the dysfunctional American health insurance industry.

And if the prospect of being bankrupted by medical bills is not frightening enough, add the increasingly hostile legal climate surrounding the software development profession. In response to all-too-common reports of software bugs and security breaches, some organizations have begun lobbying for contractual language that makes software developers accountable for any defects in their code. For example, the SANS Institute has proposed a detailed contract that would require developers to certify that they had received appropriate training, observed any and all security procedures deemed necessary, and that their code was free of defects to the best of their knowledge, among other clauses.