> Subject: [Consult400] Employee vs. SubContractor
> from Al Macintyre

> I have been asked the question - do I want to work as an employee or
as a
> sub
> contractor?  My answer has been that I have no idea, what are the
> differences?

A lot of past discussions regarding the difference between a contractor
and an employee have really been a wrestling match regarding tax laws
and benefits.  In the early days (in the US), many contractors were paid
through accounts payable and their wages were reported on a 1099.  The
contractors were responsible for all tax liabilities but often neglected
to follow through on their obligations, particularly in the area of
Social Security payroll taxes.  After the federal government went after
the employers for the unpaid payroll taxes it became less and less
common for companies to deal with anyone other than an incorporated
business.  So if you wish to work on a contract basis, you should expect
to either incorporate your own business and do your own quarterly
filings with the government or have a contracting company do the
billing, taxes, etc. and take a percentage of your billing.  I know a
number of people who have gone through the incorporation and did not
find it too onerous.  But someone does have to keep the books, file the
reports, and keep the government happy.  You need to decide if this is
what you want to do.  It really has more to do with keeping the
government happy than anything else.

The second big discussion had to do with the status of an employee
versus a long-term contractor.  This is pretty messy stuff and has to do
with some of the issues you referenced in your posting.  How much
direction does the contractor provide to their work?  How long have they
been there?  Some companies have tried to lower their head-count and
avoid paying benefits by hiring contractors, even though the work
performed was typical stuff that was normally performed by full-time
employees.  Microsoft lost a suit in the recent past and had to pay
retroactive benefits to a group of contractors who fell into this
category.  This would probably not be much of a factor in a single
contract with a small-to-midsized company.  If you and the company are
happy with the arrangement, then it should not be an issue.

Another issue is whether you wish to work on projects or provide
part-time general support.  Many contractors are hired to bring specific
skills to individual projects.  Or you may just show up twenty-hours a
week and provide general IS support as needed.

I'm not an expert in this area, but I have found the job sites to be a
good resource.  Many of them provide resources and information for
people who are facing the same decision as you.  Below are some URLs of
some sites, there are many.  I have no affiliation with any of them,
other than as an occasional user.  You may need to register to get to
some parts of the sites.


> I am told that Client Access to connect to some company's 400 is
> so
> that the place I working for would pay IBM license based on number of
> users
> (sessions?) connecting ... i.e. "free" to the end user, but somehow I
> to
> figure out how to get this to my PC & learn what the impact is going
to be
> on
> my PC resources.

Client Access is licensed by concurrent connection to the AS/400.  You
may install it wherever you wish on any number of personal computers
without violating IBM's licensing requirements.  Any potential client
could make their installation CD available to you without fear of
repercussions.  If you wanted to work remotely you could install it on
your home computer and just verify that your customer had the
appropriate licenses for you to connect.

Good Luck,
Andy Nolen-Parkhouse

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