Author Topic: Allergic to W2 employers?  (Read 1778 times)

hwstar

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Allergic to W2 employers?
« on: May 07, 2015, 12:02:34 PM »

Over the years, I think I've become allergic to engineering employers. I held an electrical engineering job for over 25 years, and was laid off in November of 2014. I have plenty of cash and investments, plus rental income, I could FIRE if I wanted to, but I still feel a duty to contribute to society, so I'm still looking for work, and thinking about starting a consulting business. For the last 10 years of my career I became more educated about American employment law, and it has started to nauseate me. The things I don't like are:

1. Employment at will: America is the exception. The rest of the developed world uses the doctrine of "Just Cause"
2. Pre-dispute arbitration. Employers make you sign away your rights to sue in court and use an arbitrator that they select.
3. Non-compete clauses. (Not a problem in California, where I live, but if I decide to move, it could be a big issue.

These 3 things make me wary of ever becoming a W2 employee again. The problem is, no employers will give up these things to an individual. If I were to become a 1099 consultant,
the only things I've seen are non-disclosure agreements, but there may also be pre-dispute arbitration contracts as well. Are there any 1099 consultants on this board which can share
the types of contracts that they were persuaded to sign?

fartface

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Re: Allergic to W2 employers?
« Reply #1 on: May 07, 2015, 12:48:17 PM »
Plus you'll be paying 15.3% self-employment taxes for each 1099.

I'd increase my consulting fees to make up for that!

Mother Fussbudget

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Re: Allergic to W2 employers?
« Reply #2 on: May 07, 2015, 12:56:45 PM »
Search engine query:  "contracting opportunities electrical engineer <city-name>". 
Searching Seattle, I found several links - one to LinkedIn (title: "Contract Engineer Jobs in Seattle, WA") showing several contract electrical engineer opportunities - including Senior EE jobs. 

I'm a management consulting / contract worker.  I work contracts that start as 3 or 6mth contracts -in my current gig for 2 years. I work for a W2 firm similar to Deloitte that gets a 'bill rate' from the companies they contract me to, and I get a 'take-home-rate' something less than that.  (in this regard, I'm a 'Tech Whore' - with the company as my 'Pimp' - and I LOVE it!)  They provide medical/dental/vision/life insurance, a 401K plan, etc.   I know people set themselves up as independent contractors, but I prefer to avoid the headaches of billing, receivables, the independents have to deal with.

I would recommend looking for positions in companies that have some new technical, or technology area you want to learn more about - i.e. cellular / wireless communications, tv/digital broadcast, etc. 

protostache

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Re: Allergic to W2 employers?
« Reply #3 on: May 07, 2015, 04:46:17 PM »

Over the years, I think I've become allergic to engineering employers. I held an electrical engineering job for over 25 years, and was laid off in November of 2014. I have plenty of cash and investments, plus rental income, I could FIRE if I wanted to, but I still feel a duty to contribute to society, so I'm still looking for work, and thinking about starting a consulting business. For the last 10 years of my career I became more educated about American employment law, and it has started to nauseate me. The things I don't like are:

1. Employment at will: America is the exception. The rest of the developed world uses the doctrine of "Just Cause"
2. Pre-dispute arbitration. Employers make you sign away your rights to sue in court and use an arbitrator that they select.
3. Non-compete clauses. (Not a problem in California, where I live, but if I decide to move, it could be a big issue.

These 3 things make me wary of ever becoming a W2 employee again. The problem is, no employers will give up these things to an individual. If I were to become a 1099 consultant,
the only things I've seen are non-disclosure agreements, but there may also be pre-dispute arbitration contracts as well. Are there any 1099 consultants on this board which can share
the types of contracts that they were persuaded to sign?

Software developer here. I've been doing 1099 consulting for about a year now and have always tried to push my own paper, but sometimes the client really wants to use theirs. I don't care, as long as the terms are ok. My standard contract has these components:

  • Term of the agreement
  • Services (What we're actually agreeing to, services to be rendered)
  • How much the client will pay me, and on what terms (usually NET10 but sometimes better)
  • A statement saying I pay my own taxes
  • A statement that I will bill for related expenses
  • An IP assignment clause (they get all IP after I get paid)
  • A two-way non-disclosure agreement
  • A two-way indemnification agreement
  • Warranty disclaimer
  • A clause specifically stating that I'm an independent contractor and not an employee.
  • Venue selection, attorneys fees, entire agreement, force majeure, etc etc. Standard contract boilerplate.

It's a lot of stuff but I feel like it's pretty well balanced between me and the client, and I haven't really had any pushback except when someone is trying to screw me. I have signed two contracts with a non-competes, but I was subcontracting and they were explicitly limited to not competing for their business with their clients.

fOne thing that has helped considerably is setting up a little business front. That way they're not negotiating with you, instead they're negotiating with a real business. This also helps at tax time, at least as far as organizing money and expenses.