Advice on Contracting

Self | 12 May 2005 | <self>

[Lexinom]

I would like some advice on my rights as a contractor.

I have been doing contract work based on a verbal contract for the last year for a small company. At the present time, we are completing a project. They have paid me for overtime according to my rate, but have not provided any vacation time. The CEO says they have given me vacation on the basis that one week I was not able to work due to connectivity issues (everyone else was gone) - nonethess I was asked to work, ready to work each day either remotely or on site, and was not able to due to their own network issues. Given the work demanded of me over the last year, I am quite burned out and could really use a break. Instead, I get an earful.

Presently I am on the health plan with a child on the way in the next couple of weeks. This is the main reason for staying. I am not easily replacable - the company is small, and the type of work is not something anybody could jump in and do. Therefore I am not too worried about termination (they would in effect be terminating themselves as the work would not get done for many months it would take to train). Still, if the unprofessional conduct reaches the point where I must leave on my own, could I get Cobra or some other plan that would kick in right away? Baby is due early June.

I would appreciate if you have a similar story to share, and of course any advice...

[politicket]

Still, if the unprofessional conduct reaches the point where I must leave on my own

I've been a self-employed computer consultant since 1995 and I will give you my advice, even though you may not want to hear it (please do not take this as an attack on you, I am just speaking matter-of-factly).

First, a "verbal" contract means very little. Yes, you could probably get a lawyer that might be able to "infer" a contract based on your length of employment. However, the will be no inferral of vacation or sick days. You REALLY need to get a written contract, and have it reviewed by a lawyer (pretty inexpensive).

Second, you are a CONTRACTOR and not an EMPLOYEE. Therefore, you must forget about paid vacation, paid sick leave, Martin Luther King holiday, etc. The employer owes you absolutely none of this. This is why you hopefully charge a little higher in order to take your own vacation each year and be able to afford it (since you won't be getting paid during that time).

Third, you made the statement: "I am not easily replacable - the company is small, and the type of work is not something anybody could jump in and do. Therefore I am not too worried about termination (they would in effect be terminating themselves as the work would not get done for many months it would take to train)."

You are by no means irreplaceable. Please understand that. I'm sure that you provide a great service and do great work, but that same job could be getting done (on a quality basis) next week given the appropriate amount of money spent by your employer.

Fifth, you made the comment: "Still, if the unprofessional conduct reaches the point where I must leave on my own..."

Absolutely nothing in your post corresponds to "unprofessional" conduct by your employer. It sounds like they are treating you as a CONTRACTOR.

In summation: you really need a written contract and you must stop thinking of yourself as an employee of the company. You're not.

I hope that you consider this post in the light that it was written. This is not meant to demean you since MANY contractors go through the exact same thing once they have been with a company for a while (i.e.: thinking that they should be invited to the office Christmas party).

[Dinsdale]

Dude I've been there.

You have got them by the short and curlys.

Raise your billing rates, then raise them again. Repeat untill they claim your taking food from their children. Then repeat again.

They have chosen to (buy their business methods) to deal you four aces. You are a fool if you don't extract every dime from them. I do mean every dime, think of it as a race between them going bankrupt and them getting a clue. It's an immoral act to let a sucker keep his money. By definition he is a sucker therefor was 'lucky to get together with his money in the first place'. Also by definition no one is more deserving of the money then you (aside from me of course). Therefor it is an immoral act to let a sucker keep his money, someone less deserving will get it.

On second thought they have delt you three aces, you need to find the forth ace yourself (that is another offer).

[politicket]

Sorry for the typos in my post above....my computer programming is actually better than that...I'm series! ;-)

Point #4 was unimportant anyways...

[Lexinom]

Thanks for the advice. I've bookmarked this and will refer back to it. It is much appreciated.

I am sorry to have left the impression I expect paid vacation. No, I don't expect to be paid for hours I don't work. Burnout is simply a reality common to our industry, as you are probably well aware.

[Lexinom]

Wow. This is exactly what a buddy of mine says. He is also an ex-contractor for this firm - one of the few that doesn't hate them.

Working on that fourth ace ;-)

[politicket]

Raise your billing rates, then raise them again. Repeat untill they claim your taking food from their children. Then repeat again.

If you take Dinsdale's advice then you will have LOTS of time to spend with your new baby at home, and good luck on referrals for a new contract.

If you knew how many contracts I have been able to take over because a contractor thought they had a company by the "short and curlys" then you would be amazed. That's how I have made part of my living. Remember, NOBODY is irreplaceable.

[Dinsdale]

I've got to jump in and disagree with one point you made.

Given poor enough methods there is no way a person can be replaced in a week. Even in good environments new people are net negative for a period depending on the project complexity.

If he's up to his nose in the project and the company depends on the system for core business he can leave the CEO thinking the word extortion 10 years from now when his name is mentioned. I've done the very thing. It feels good to deal out some justice once in a while.

[Lexinom]

I'll raise them a little bit, as my rate is a little low for my experience level anyways, and I deserve a raise after over a year. Besides I'm not enjoying being there, being burned out and all. I could get more at Micro$oft.

[LibFreeOrDie]

I've been an independent contractor (technical writing and course development) for over 10 years, and have to agree with Politicket.

(Also, in your duplicate thread, you mention that you took pity on the company. Don't let emotions ever get in the way of your best interests. You can't save a mismanaged company all by yourself.)

IRS guidelines on determing independent contractor vs. employee, with links to additional info, including detailed IRS training manual:

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

[politicket]

I'm glad that you took my comments in the context that they were meant.

I work an 80-hour week in my personal company taking care of my clients (fortunately a large number of those hours are from my home office).

Computer burnout can be intense, especially when the wife gets jealous that you spend more time with the computer than with her. I would recommend sitting down with your wife and setting up a budget and goals. The goals should be for 1 Year, 5 Years, and 20 Years. This will help to establish a vision and put you back in control of your career.

Also, if you don't absolutely love to program then you might need to reassess what career to would love to do.

Lastly, be thankful to God. It sounds like your current client helped you avoid the massive layoffs that a great number of people in our industry experienced. I know many folks that were out of work for well over a year - some two years.

[Lexinom]

I have heard so many stories of the CEO yelling and cussing people out. My time just about came on Wednesday, but I averted it by remaining cool. Still, I saw the ugly wolf snarling under the lambskin, and it used foul language.

Programming is my main skill, and I've been at it since age 9. The only other thing I could do would be to invent a new computer, but that's for the future... All I need right now is a break and I'll be fine...

Yes you are right about thankfulness. Ironically, this company contacted me just a week after I had been laid off from another position. I had worked with them before, and heard from them out of the blue. I was one of the few remaining unburned bridges (see above comments about the CEO's temper). The Lord does only good.

Thanks for your forthright and kind words.

[Dinsdale]

It is a dance. If your not core business you have to limit your expectations.

However recognizing when you truly have them by the short and curlys is an important skill.

Noone is irreplaceable. But your replacment cost could be MUCH higher then your current billing rate. It could be shutting down their business for a period. If that is the case you should extort.

If this is your first contract position or you NEED the ref. Don't do it. My advice was based on the assumption that you have a reputation established and don't much care about the final outcome for a company as poorly managed as the one you discribe (which begs the question why have you stayed as long as you have?).

Remember you will get most of your future contracts through contacts with other technical people. The people you want to impress are the others in the trenches as they will scatter to the four courners of the world. Do a good job, don't make the jobs of others harder then needed. Managers often don't understand what you do, much less if you do it well.

[politicket]

Given poor enough methods there is no way a person can be replaced in a week. Even in good environments new people are net negative for a period depending on the project complexity.

Not to argue, but I my company specializes in cases exactly like this. I can go into a company, especially a small one like this, and have their entire business process mapped in three days. I can have a full infrastructure analysis done one week later.

Any written code can be worked through and corrected (by a fast-response team if necessary).

Again, programmers need to stop thinking that they are irreplaceable.

[politicket]

Given poor enough methods there is no way a person can be replaced in a week. Even in good environments new people are net negative for a period depending on the project complexity.

Please let me know your current client. I have a business proposition for them... ;-)

[politicket]

I have heard so many stories of the CEO yelling and cussing people out. My time just about came on Wednesday, but I averted it by remaining cool.

You handled it well. My best advice to you is to stay OUT of office politics, lest you be swept in by the undercurrents and drowned. Stay above the fray...

If you have been with the company for a year then it is probably a good time to discuss a small increase in your rate with them.

[Dinsdale]

Working for clients with such poor methods was a thing of my twentys.

Today I think life is too short for full time work, and see the rates my bosses saw as extortion then as so so.

I've gotten financially positioned to be able to say no. It prevents me from doing crazy things like working (many) 80 hour weeks. Seriously I bet you could say no to some of the crazy hours but could'nt say why beyond the money you never have time to spend (at some point money just becomes a way of keeping score IMHO). Please take this all as friendly commentary etc. Tell me to shut up if you need 500K/year for a sick kid or something.

My pattern seems to be about a 50% duty cycle with about 50 hour weeks if clusters of months (I find my quality drops drastically if I don't get enough sleep). I do remember being hungry, but I also remember working my a&* off when I could'nt find sensible ways to spend the money I already had.

I'll post my client list right after you post yours. And yes I'm gratefull for so many things.

[politicket]

I've gotten financially positioned to be able to say no. It prevents me from doing crazy things like working (many) 80 hour weeks.

I could cut my hours down by taking on a few more quality sub-contractors.

30 hours of my week are not paid per se. They are being used to expand my business from being only service-based to one which is also product-based.

I'm beginning to move away from the "dollars per hour worked" scenario into the "dollars per product sold". That way my efforts can be multiplied many times over.

I'm also fortunate that almost all of my hours are home-based, so I am able to enjoy my family and get work done at the same time.

[Lexinom]

I'll probably end up sticking it out. CEO notwithstanding, I have good relationships with everyone else on the team and do have a concern for their welfare.

But then Micro$oft could be tempting...

[PistolPaknMama]

This sounds like a fine line between "contractor" and "employee." The IRS has several questions you can answer to determine the status of a worker. I'd say you are an employee, not a contractor and the only reason they call you a contractor is so they don't have to carry workers comp insurance on you and pay half your social security.

As a contractor you probably should not be eligible to participate in their employer health care program either. For you to have signed up for that, somebody had to state you are an employee. Since they've already represented you as an employee, if you leave I'd feel sure they wouldn't come clean with their insurance company and say they lied the last three years just to keep you from getting COBRA. That's the only way you would become ineligible.

Won't go into the written contract issue since some other folks covered that on this thread already. But if you continue doing contract work in the future make sure you HAVE a contract that covers what-ifs and allows you a life!

Good luck!! :-)

[politicket]

But then Micro$oft could be tempting...

Then you will be REALLY burned out. They work you to death over there if you are an employee.

Remembers back when Windows 2000 came to market? Microsoft ran a promotion for three weeks where they gave away free copies of Windows 2000 Professional to lucky winners each week.

Microsoft initially subcontracted the work of setting up that promotion to a company in Utah (U.S. Web). That company took the work but had NO IDEA how to make it happen since they had to use their own web and database servers and make it look seamless to folks surfing Microsoft's site and clicking on the promotion.

This company turned around and subcontracted the work to another company in Colorado Springs, CO by the name of Saligent Software. They grabbed the contract, but also had NO IDEA how to make it happen. Now time was running short.

Saligent Software contacted my company and I agreed to do the work. I had to order high-end servers, software, high-speed rack space, etc., and set up the entire infrastructure in Denver to seamlessly integrate with Microsoft's web page. All of the web content had to flow through the various levels at Microsoft to make sure that that it met their specs.

Then I had to program all of the ASP and database software to capture all of the data so that the marketing folks at Microsoft could run all of their business analysis on it.

This system was up and running in 3 weeks, from the initial hardware order to a finished product hooked into Microsoft's network. The promotion ran flawlessly and my servers got hammered. Microsoft generates a TON of web traffic.

I also had to write the code that picked the winners each week and e-blasted the losers to thank them for entering. When everything was done I gave Microsoft's Marketing department a copy of the SQL Server database and they didn't have a clue what to do with it. I had to move everything over to an Access database so that they knew how to use it.