[CI News: Whew. I have to say the contract I'm on has taken the macho out of me. It's tough to find enough extra work hours to keep stuff happening with CI. As you might have seen on the home page, there is a design contest going on to build a page for the url ITIndependents.com. That’s because we're starting to see other states pick up on the idea of a localized website for independents. Whether or not we actually reach the finish line with any design entries remains to be seen, but I think some folks out there are working on designs. If we have more than one entry, you'll be getting an email and a chance to vote on your favorite. The deadline for designs is Sunday March 18, 2001.]

LIFE ON CONTRACT (PART 1)

I'm on a 3-month contract. It's a W2, on-site contract. That’s not particularly my favorite kind, but my bank account isn't complaining. The experience of being on-site again after a full year of telecommute work begs for commentary so that's the subject of this newsletter.

I have to be careful here. I don't want to bite the hand that feeds me (my agent). But I do need to report those issues that concern the independent. Lets see how it goes. I’ll just try to tell it like it is.

Getting the Contract

To set the stage, a fair chunk of the income I earned over the last year and a half came from two contracts. The contracts resulted from a response to my (highly polished) resume posted on Dice.com. Both jobs were 3 to 6 month telecommute contracts - the best kind you can possibly have in my opinion.

My current contract came about because a local talent agent saw my resume on one of the large job boards (again, I think it was Dice), and noted that I worked nearby. He called me up, we had lunch, he learned my idiosyncrasies, and when a suitable position came along he called. The job is a W2-contract, on-site, and is supposed to be of 3-month duration. I almost didn’t take it as I had plenty of “potential” work in the hopper. But as many of you know, a job in the hand is worth two in the bush.

The Paper Work

Whenever you go through an Agency, there is a bunch of paperwork to fill out. The most important paper you sign in a W2-contract situation is the employment contract with the agency. It’s usually around three pages and it’s worth taking plenty of time to read through before signing.

I’ll touch on a few contract clauses that are worth highlighting:

(1) Non-compete period. In other words, how long before you can directly call the company you are working for and ask to be hired by them. No big deal here. Personally I think anything longer than 180 days is too long and I always attempt to negotiate to this length of time.

(2) Compensation. That’s where they tell you how much per hour they are going to pay you. Ideally you will try to find out the “spread” or percentage the agency is getting for your talent. In essence, this is what you are paying them as a marketing fee for placing you and for any benefits the agency is providing.

I did not attempt to get the spread information on this contract. I’ve discussed this issue on CI before and I’m not going to argue it now - but I’m bustin’ to make this issue an entire newsletter.

(3) Confidentiality. In short, this is where they tell you not to disclose to others, confidential information you’ve learned at the client’s place. Fair enough. Next, you may encounter the only fully capitalized paragraph in the entire contract:

YOU FURTHER AGREE NOT TO DISCUSS THE COMPENSATION STATED IN THIS AGREEMENT, OR THE COMPENSATION PAID TO YOU BY <the agency> PURSUANT TO ANY PRIOR EMPLOYMENT AGREEMENT, IN ANY MANNER, WITH THE CLIENT, THE CLIENT’S EMPLOYEES, OR ANY CONTRACT EMPLOYEE OF THE CLIENT.

Well, you don’t capitalize a clause in a contract unless you want it to be noticed. If you read CI newsletters 3 and 4 you know the trouble this stuff caused on my first contract. There probably would be no Colorado Independents website if not for events caused by issues surrounding rates.

What exactly is the problem? It depends on your perspective, and the subtlety’s go on forever. The tip of the iceberg:

a) contractor-to-contractor (same agency): If you know what your associate contractor is making on the job, and it’s more than you, then you are mad at yourself for not negotiating a better rate, mad at your associate for making more than you, mad at the agency for making so much money off you, and so on.

b) contractor-to-contractor (different agencies): If you find out the other talent, from another agency, is making more for the same position you are mad at your agency for underbidding the job or taking too large a spread, and mad at yourself for not using the other agency. Your agency is mad at you because now you’ll eventually leave them and go to the other higher-paying agency.

c) client-to-agency: If the client finds out how little you make relative to how much they are paying the agency they may think – whoa – I can find my own talent and save a bundle if I pay the low contractor rate directly. If the employees of the client find out the contractors are making more than them they are mad at the employer for paying so little, mad at the contractors for making so much, and mad at themselves for not becoming an independent.

d) agency-to-agency: If another agency finds out what the competitor agency’s contractors are making on a particular job it gives them competitive advantage as they can then more closely underbid and place more of their own contractors. Of course, they’d have to know the spread too.

Can’t we all just get along? I doubt it. In the context of agency-provided work you are better off keeping your mouth shut about your pay rate.

A truth is that, between the percentage split and wage confidentiality clauses, I still get steamed. I know there are a lot of agents and contractors out there who do not agree with me that this should be an issue. I also know there are a lot of contractors who have the same issues as I do. So – SOMETHING is going on.

In the meantime I’m keeping my mouth shut about my hourly rate, while working to better understand, influence, and perhaps transcend that which ticks me off.

For our final contract item before we break until the next newsletter:

(4) Ownership of Work Product. The clause says that you will disclose and assign full rights to all inventions, improvements, or discoveries you make to the client. I’m ok with that except for one area: routines (code libraries) I’ve spent years developing, that I bring to the clients site to assist the development effort. I always make sure to get an initialed addendum to this clause that simply states that I retain copyright to code I bring to the client site. This is simply to prevent a client from selling my clever code routines as stand-alone routines for profit.

Next time I visit LIFE ON CONTRACT, I’ll discuss the contract working environment – the good, the bad, and the ugly.

Regards,

Clint Lewis
CI Editor
719 442 0926
http://www.coloradoindependents.com
clint@32u.com

Photo by Todd Powell Photography
http://www.toddpowell.com