Re: Employee vs. SubContractor

There is another point of view to that as well. How comfortable are you
constantly
collecting what you bill? W2 means no billing, and you can concentrate on
the
projects or whatever at hand without worrying about finances.

And usually it also allows you to do some consulting 'on the side' if you
wish,
so your income is not limited strictly to W2 income, but the side income
isn't
going to take up a major portion of your attention.

Then there is the question of loyalty; if that is important to you, W2 is
the way to
go. It implies more loyalty on both sides (though of course, that is not
always true.)
Loyalty on the part of the employer because a W2 employee is a lot more
trouble
to setup and maintain than a consultant, and loyalty on the part of the
employee
because most, if not all, their financial income and benefits is dependent
upon
that job.

Personally, I am more comfortable as a W2 employee, basically because I like
that loyalty - and I am good enough that I can work only for companies who
basically feel the same way. The company I work for now encourages long term
comittment in every way they can. I like that.

Conversely, consulting is pretty much 'short term' stuff, even when a
contract lasts for years.

-Paul

----- Original Message -----
From: "James W. Kilgore" <eMail@James-W-Kilgore.com>
To: <consult400@midrange.com>
Sent: Sunday, April 07, 2002 7:57 AM
Subject: Re: [Consult400] Employee vs. SubContractor


> See below
>
> "Kenneth H. Werner" wrote:
> >
> <<snip>>
> >
> > The difference between employee and subcontractor is not a matter of
> > taxes, liability for work product, copyright owner or how much you are
> > supervised.
> >
>
> Ken,
>
> I respect your view on your relationship you have with your clients, er
> partners, but, IMHO, a business knows that in the final decision it boils
down
> to taxes, liability, copyright, work freedom and all of the costs and
gains,
> both financial and emotional, that come with that decision.
>
> Having said that, I believe that the first question that anyone facing
this
> decision must ask themselves is -if- they can live with the explicit
uncertainty
> in their income vs the self induced illusion of job security as the
original
> posters story indicates.
>
> It has been my observation that most, not all, W2 status workers do not do
well
> as contractors.  It's a different mind set.  Not everyone can make that
> transition.  Ask yourself how you felt about having your hours and pay cut
> because of a situation that your employer found themselves in.  Did you
view
> this as a problem in your life or as just another day at work which
resulted in
> freeing you up to pursue other opportunities?
>
> Since the employer has asked you to consider changing to contractor
status, I
> doubt that they would be willing to pay you your former full time pay plus
the
> benefits that you had received should you become a contractor.
>
> This means that you will need to obtain another (or more) contracts to
make up
> the difference.  It also could mean that your employer plans on stiffing
you
> because by law they -have- to pay a W2 employee, they can argue against
value
> received when it comes to paying a vendor.
>
> But anyway, sooner or later, projects wind down and you will be faced with
the
> continuing job seeking that contracting requires.  Some people do not like
> spending a life time of interviewing for jobs and prefer a W2 status so
they
> only have to do it every 3 - 5 years or so.
>
> BTW, as a contractor, I believe that if I have done my job right I am no
longer
> needed.  I may be wanted, but not needed.
>
> There are other personality traits that you have to ask yourself if you
> possess.  Such as, do you have the discipline to save money that you may
have to
> draw upon between contracts?
>
> Since, as a contractor, the client (or partner as Ken calls them) can not
> dictate your hours or place of work, are you self motivated enough to work
> without immediate supervision?
>
> As Ken indicated, the relationship you have with your employer does go
beyond
> legal status.  The legal status issues are easy to solve.  It has a finite
sets
> of rules.  The personal issues that you will face are not that cut and
dry.  And
> I believe they should be the first issues addressed.
>
> Good luck,
> J. Kilgore
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