Being a Consultant or Freelancer

All positions are temporary. You may receive a W-2 form at year-end, or you may receive a 1099–but no work you do is permanent. However you are paid, make sure you are paid fairly. And make sure you are gaining experience that will help you get your next assignment–inside or outside your present company. Have a backup plan. What would you do if your current assignment or situation ends?

If you happen to be looking for full-time work on-payroll, you still may be offered consulting assignments. So you should learn how to negotiate them.

Today, more and more companies are bringing in workers on a contract, consulting, or freelance basis. Such workers usually get no benefits (health insurance, paid time off, training, memberships, company-paid contribution to Social Security, etc.). Other contract or temp workers are hired through an intermediary company that may or may not put the workers on payroll, and pay for their benefits.

Even very senior managers find themselves serving as full-time consultants. Some companies are actually doing this illegally. If you are working full-time for a company which decides your hours and the content of your work, you are not a consultant but an employee. This means that the company must put you on payroll and pay the extra costs associated with that.

At one very large company where I was consulting, there was a relatively low-level person who worked on computers, kept the same hours as everyone else on staff, but who was paid a flat $15 an hour as a “consultant”–no benefits, no insurance, no paid time off. Large companies are sometimes even more likely than smaller companies to get away with this because they have so many employees. A manager may hire “consultants” because the company has a “freeze on head-counts”–he or she is not allowed to put more people on payroll because that would count as a “head.” Yet the manager is allowed to hire consultants, temps, and freelancers.

The worker is stuck. The company has all of the power. If the worker wants to work, he or she is not going to complain about unfair treatment.

To counteract this trend, workers are sometimes opting to have “a job and a dream”–a job that pays them regular wages, and other work done on the side to build a future that may be more secure than working for one company. Some workers are able to grow what was once a sideline into a stable source of income. That work may include consulting or selling part-time, trying to build a business, and so on.

Regardless of how you are paid, develop your skills and your marketability to the point where you are less likely to be taken advantage of.


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