New Engineer: Need advice-contract/FT circumstances 6

[HuckleberryFinn]

All,

First, Thanks for reading/commenting on my post, I do appreciate the advice.

Second, the Problem Statement: I am a newly minted engineer, fresh out of school(I graduated with my Bachelors in May of 09' and Master's in August of 10'). I have been working with my current firm as a "contract" employee since Late September (I put contract in quotation marks because no actual formal contract exists). So I've been with my employer for 3 1/2 months and when I initially came on I was told that they did not need a "full" engineer at the moment but did need something in between an engineer and a drafter and could possibly need a full engineer depending on the workload in the next two to three months.

My firm is a smaller firm with a staff of approximately 12 people. We have a significant (or what I believe to be significant) backlog of projects well into 2011 (I think enough to keep us busy until July/August).

I started out doing mostly Revit modeling and correcting red-marks from the PE's. In short order, I have progressed to detailing / connection design and project engineer level responsibilities on two projects (Framing modeling/optimization with RAM, FEA of selected systems (canopies, built up members, etc.) as well as Standard calculations - Loads, Drifts, Member design etc.) While I still correct red-marks as needed from the PE's and pull off of what I'm working on to help other team members with drafting if they have a deadline approaching, I feel that I am fairly justified to call myself a full-time EIT at this point.

The problem that I'm facing is that I'm not, in fact, full-time. I'm being currently being compensated at $19/hr [before taxes] with no benefits [this is my "contract" rate, so I'll be paying estimated taxes four times a year based on this rate]. I'm not very happy with this rate, as I basically cover my bills, put aside taxes, put a little into retirement and have nothing left to live life with.

I'd prefer to stay with my current firm but am unsure how to bring this problem up or find resolution? How would you approach this scenario? I've never done any negotiation or anything like this before so I have no real idea of what to ask for or what would be reasonable. I'd appreciate any advice you folks can offer.

Many Thanks All,

 

[JedClampett]

I'd start by saying you have very little to lose. They have you working for peanuts without benefits. You could go work at a Starbucks (nothing wrong with that) and end up bringing home more money.
Start looking for a job. Once you have some nibbles, tell the company you're working for (if you really like it there) that they need to make some committment to you. Full time, with vacation, insurance, etc. I'm not that familiar with the compensation for new hires these days, but $30/hour sounds good. Don't forget, you have experience now.
But don't make any demands until you at least have some interest from other firms. The only thing worse than $19/hour is $0/hour.
One other thing. Don't accept an job offer and then go to the company with you requests. It's bad form. Once you formally accept a job offer, you need to follow through.

 

[Ron]

Agree with JC....your contract rate is less than a salary rate for a new engineer. Generally when you are a "contract" engineer, your rate is substantially more than a typical salary rate on an hourly basis, since you have no benefits and you are picking up all taxes.

Start looking for a job. They'll probably make you an offer when you decide to leave....as you walk out the door ask then why you weren't worth that amount yesterday!

 

[MikeHalloran]

1. Get another job.
2. Leave.
IN THAT ORDER.

DO NOT ACCEPT A COUNTEROFFER.





Mike Halloran
Pembroke Pines, FL, USA

 

[pmadson]

Have you discussed your concerns with your boss? I would ask for a meeting and tell him/her that you would like to be a salaried employee of the firm. If you've done excellent work up to now and have had a positive helpful attitude, they should see you as someone worth investing in as long as they have the work to justify it. Once you've had the conversation, then you'll know where you stand and you can make decisions from there.

If one of my employees was unhappy with his situation or compensation, I would much rather they talk to me before doing anything else.

I don't know what new structurals make these days. Can you find out from your peers, or maybe your school?



Pete Madson

http://www.npcg.net

 

[OHIOMatt]

This is a little off the direct topic, but I question how a recently graduated engineer can be considered a contract employee.

For your own knowledge, I suggest reading the .pdf in this link (assuming you are in the US)

http://www.irs.gov/pub/irs-pdf/p15a.pdf

I am not saying that you are or are not an independant contractor, but you should have all knowledge when making decisions about your future.

 

[mudcatwilly]

New civils in Northern CA start at around $55k per year (or more) with full benefits and sometimes a company vehicle. That is without a PE. The job market stinks right now, so be careful that you don't take a new job only to get cut due to downsizing in a year. I would try to negotiate first. Get an offer from another employer, print out some comparable salaries that other companies are advertising, and take that to your employer. If they aren't willing to negotiate, then that is probably not a place that you would want to stay at long term anyway.

 

[glass99]

HuckleberryFinn: One metric that might be useful in your discussion is the multiplier between your salary and your chargable rate. Most firms are in the range of 2.5 to 3.5, which includes benefits. If they are charging you at $90/hr, they should be paying you approx $30/hr.

If you are going to be an engineer, you need to learn to negotiate!

 

[csd72]

glass99, it doesnt necesarily work that way for a new graduate as there is often a great deal of unproductive time in redoing things, learning e.t.c. that you cannot bill the client for.

I disagree with many of the above who say that you should automatically be looking for a new job. Personally I think anyone who has a job in todays market is lucky. My suggestion would be to get a reasonable level of experience at this place and that will put you in a much better bargaining position when the economy (and thus salaries) improve.

That said, I was on a similar pay arrangement (though more) and the IRS treated me as self employed. I got stung for double the usual social security as my employer was not paying it for me - definately check this is not the case or you are really being taken advantage of.

 

[controlsdude]

since you have not worked there for a year, most companies wont give you the time of day. YOur fresh out of school so try and hang in there.

I would try and negoiate again with them since they did not give you a fair shake to begin with on this contract position. Put out a honest anwswer about the rate they are giving you and the training period is over at 90 days. State that your contract wage was a training wage and now that you have the experience you would like to negoiate a better hourly rate since your paying taxes and have to provide your own benifits.

Otherwise, look for another job and chalk this one up for experience how not to get a living hourly rate.

 

[cvg]

unfortunately, you did get "a fair shake". The company made an offer of $19 per hour, no benefits and you accepted it. Now you realize you could make a lot more. You could try and negotiate a higher rate, but saying it was not fair is not going to help your case. You should focus on the value you offer your employer. Unless you signed a contract, there is no contract. A verbal contract "might" stand up in court, but again they needed to state up front what the conditions were to make it binding. Hope you kept a copy of everything you signed. Either way, unless it was agreed upon up front, they need to pay your social security taxes and with holding from your paycheck. A quick call to your local IRS office for a special audit might clear up that little problem.

 

[Yagonyonok]

One more thing to consider when you go to renegotiate with them is that you are now a known quantity. They have had 3 months to watch you work, get a feel for what you are capable of, and gain some confidence in your ability to be a profitable employee.

Hiring a new grad is a risk. You have very little data to use to determine whether they are a solid worker who can get it done, or whether they simply had smart friends who helped them limp through school.

Good luck with it, and be sure to let us know how it turns out.

Use of system voids warranty.

 

[duck0601]

$5 (U.S.) per hour is approximately $10K per year, thus $19 per hour is @ $38K per yr. Salaries, in general, are very location dependent. I am seeing salaries between $20 and $30 per hour for experienced (5-10 yrs) engineers in SE MI at this time.

 

[berkshire]

Huckleberry Finn
Did you read the IRS document provided by OHIOMatt ?

Unless you have a contract stating that you are not an employee, you may well be one.
If in fact that is the case your employer may well be breaking the law,he may not know that, but that does happen.
B.E.

 

[cry22]

Your boss is not stupid, he knows exactly what he is doing, he is probably doing this to a lot of people.

I would not approach your boss for discussion as pmadson suggests, because yur boss will promise you the moon and cool you off, then set the place for a new slave to come in and replace you. You are no longer a TEAM PLAYER (or slave player).

Your boss is a blood sucker.

Follow Mike Halloran's advice. That's the best advice you got form this thread.

 

[HuckleberryFinn]

Thanks for the advice everyone, I appreciate it. I have a meeting setup with my boss and two of the other partners this coming Friday to talk about it, I'll let you know how it goes.

OhioMatt/Berkshire, I did check out that document and I agree with you; I don't think I can be counted as a contract employee. Although depending on how the meeting goes this Friday will probably dictate how I decide to break this news to my boss. For now, I think I'll continue budgeting for paying both shares of federal/state/social.

In the spirit of prepare for the worse and hope for the best, I have started looking at other firms; I'm hoping that this won't be necessary and that we can work something out as I'd hate to have to leave this city (the majority of my family lives here, which is nice). Anyways, Thanks guys, I'll let you know sometime next weekend how it turns out.

-HF

 

[photoengineer]

I started out in a very similiar position: underpaid and little benefits. I graduated in 2003, and the job market was terrible, and there were few options.

Hang in there until you can get a new job. While you're underpaid, you are getting paid better than most other graduates in other majors, so that is a nice plus. You can pay the rent, student loans, and have a little spending money.

Seriously look for a new job. The big companies take forever to hire (it might be six months from the time you submit your resume until the time you accept your offer), so you might be there a while.

You are getting experience that will qualify you for a PE license someday. You'll need the PE or supervisors signature a few years from now, so don't burn any bridges when you leave.

Cedar Bluff Engineering

http://cedarbluffengineering.webs.com

 

[BJC]

There hae always been people who will take advantage of situations and people when they can. Your boss may be working you like a rented mule for $20/hour and charging the client $150. He drive home in his Mercedes you take the bus.
If circumstance are lining you up to be a contractor be a good one. Find some people who are and talk to them. Get on the forms at

http://www.roadtechs.com/

read and ask questions.
Plan- in your first contract job pick jobs where you can learn and proceed to get your PE. The PE will be hard but it can be done.
Roadtechs list "Shops: these can be big engineering and construction companies or small specialized.
They can also be some of the nation "personel firms". They have people working for them that were selling hamburgers last week -stay away form them.
The common term for people who run "Shops" is Pimp.
Good ones want you to succeed and make money because when you do they do. Find one you can work with, tell him/her your plan.
Your goal is to become a "Hired Gun". Some one with the experience and reputation that your abilities and value are unquestioned.
Someday when your present boss has a job really screwed up and needs help he'll put out the call for help. Your pimp and/or his HR people will put him in touch with you. Your answer might be something like "I am in Patgonia at the moment, I'll be flying back Sunday, I can be their Tuesday as 7:30. I want to wrk 10 hrs a day and my rate is $200/HR.

 

[TrippL]

In the position you are in (not full time employed) you should have constantly been looking for a full time job. I would think that your employer would expect this and not be surprised that you were looking.

I tend to agree that your employer is leading you along as long as he can for as little as possible. Sucks to be in this position because you should be able to go to your employer openly and freely to discuss having a more permanent position. however, in this market, your limited experience and ease of "replacability" (no offense)you don't have any leverage and could endanger your current employment by bringing this up with this type employer.

Before I talked to your employer, you should try your best to show your value to the company. Establish an "invaluability". Then talk to your employer. This will give you leverage and some better cards to bring to the table.

Or, find another job then leave. Working for good people is as valuable, if not more valuable, as money.

Good luck, and let us know how it worked out.