Salary to Contractor???? 3

[Gymmeh]

So I got this new job offer starting off as and Autodesk Inventor design engineer and supposedly working into FEA and engineering as I learn. I really like the company, and really want to get into the field of work.

The problem is that they want to pay me $18/hr and hire me like a contractor for the first 3 months. Then depending on my performance I would get a pay increase between $23-25/hr and some health insurance contribution.

Of course this is a large step back from my salary and full benefits, but what I want to get into more CAE.

I asked the manager if they could at least mach my health plan and try to get closer to what I make now. Should you take manger pay cut when changing jobs because they will be “training” you for the first 3 months?

I guess the other question is, isn’t $23-$24/hr more reasonable for drafting as a contractor?

 

[jpankask]

I wouldn't do it. Our contract engineers make 5x to 10x that, in large part BECAUSE they don't get benefits. That guy is taking advantage of whoever will accept it, and not many will. He wants to "see how committed you are" without showing you any commitment...forget it.

 

[josephv]

Gymmeh, best wishes and good luck

 

[csd72]

Figure out what you are worth and dont settle for less.

 

[mshimko]

For Gymmeh:

I would use the points I mentioned above to negotiate a higher salary while not being hired as a permanent full time employee. This reduces his risk, but doesn't leave you hanging by yourself.

Heck, agree to meet him "half-way". A fair and reasonable burden for fringe and overhead is 80%-100%. Mention this and suggest a 50% increase. He will still be getting your services at "below market rates" with zero risk to him. If he won't budge, I'd avoid the place.

 

[ajack1]

I cannot speak about the USA but in the UK a three-month trial is normal and you have little rights above that of a contractor anyway.

You say you are in an area/ industry that is going through hard times but cannot afford to get out. I know this sounds hard but you need to do something about this and it will involve making a hard decision one way or another or just hang around and hope that things get better.

If you try looking at the situation as someone is prepared to train you and pay you, albeit a very poor wage, does it seem a better proposition?

If you look at this as an opportunity and work really hard for the next six months would you be in a position where you could become invaluable to the company or at least be able to apply for other jobs that posters claim pay 10X this amount?

Is it worth taking a short term hit for a long-term gain and if not how else could you change the situation you are in?

 

[cksh]

18/hour?! for an Inventor designer? And contract on top of it? I would tell them where to stick it

Generally contract should make more. I have used Inventor in the past and none of our permanent guys made less then 20/hour with full benefits. This is in S.E. Michigan. And it was a cheap company. Heck, my wife made 40k year with no degree or experience answering tech service calls 10 years ago. at the same time I was making about 37k w/full benefits doing basic drafting. Where are you moving?

It might be worth the chance simply because you can learn FEA. I would try to get everything in writing. As someone said follow your dream I would like to learn FEA. At least in the end you can take that training and go elsewhere if they don't follow through. And make sure that when they say pay increase that the 20/25 an hour is on top of your regular rate. I would get it in writing.

Make sure that wherever you are moving has other jobs in the area with similar industry.

 

[Gymmeh]

cksh, I have been looking to a larger urban area, I really don’t have any preference other then the place is in the north cuz I like snow.

I belive in flowing my dreams, but not digging myself a hole while doing it.

 

[MikeHalloran]

If you make enough money, you can fly to the snow when you want to play in it.

Mike Halloran
Pembroke Pines, FL, USA

 

[MedicineEng]

Maybe gymmeh is applying for a local position in Mexico...
Are you sure that it is in US?

 

[Gymmeh]

LOL, thanks Medicine, I needed a laugh

 

[GTstartup]

I don't know if this has been broached but hiring you as a contractor is probably going to be looked at unfavorably by the IRS. A company cannot designate an employee as a contractor just because it is convenient. If you are using the company's equipment, insurance, office, have fixed hours, in other words, treated like any other employee, then you are an employee not a contractor. This knowledge might be useful in your negotiations. Use it like you are doing them a favor by pointing it out. "I would love to contract for you but......"

As far as the hourly rate, It's ridiculously low as stated by others. You should be getting at least 1.5 times a regular employee hourly rate and paid for all hours worked.

 

[IRstuff]

The only thing that the IRS has ever really been able to do is when "temporary" contractors work for years on the job. Anything in the 3-month range is probably unassailable. Somewhere in the 6 to 12 month timeframe, the IRS starts getting interested in whether the company is trying to avoid paying payroll taxes and the like.


TTFN

FAQ731-376

 

[GTstartup]

OK IR but that's just a technicality. The fact is that they are most likely violating IRS guidelines. Because the IRS is too busy to check on short term contractors doesn't mean what they are proposing is legal.

The OP can still object to contractor status because he does not meet IRS guidelines.

Here is a form that the IRS uses to determine if a worker is an independant contractor.

Http://www.irs.gov/pub/irs-pdf/fss8.pdf

Although it does not give conclusions I think it can be seen from the type of questions that the OP is not a contractor. Hell, Just the hourly rate is enough for me to conclude he isn't a real independant contractor

Also, bear in mind, as a contractor he will get a 1099, have to pay his own taxes, SS (which is an additional 6.3% more than an employee, worker's comp etc.

I am not suggesting he uses this as his primary negotiation, just have in his back pocket so he can subtley throw it out there for consideration. Might tip the scales in his favor

 

[Gymmeh]

wow, this deal is starting to look really bad...

the problem is that when i go there and ask for almost twice what they originally offered they will probably tell me where the door is.

Before I go in for another interview should I email them with my concerns and what would be a more reasonable rate? Or is that asking for to much?

 

[GTstartup]

If you really want the job I would approach it like the $18 is "in your pocket" (Before income tax). Even this makes me cringe, but so be it.

In other words they make you whole for all the "extras" SS, Worker's comp, insurance etc. Then tell them since you are "contract" you are not on salary and want to get paid like a contractor, i.e. for every hour you work. Then if you are feeling really brave, tell them "of course overtime is time and one half or double time as is customary for contract work" then watch their faces, if they drop, quickly say "just kidding"

;-)

 

[IRstuff]

The IRS form, and the this page:

http://www.irs.gov/govt/fslg/article/0,,id=110344,00.html

relate to an INDEPENDENT contractor, which isn't necessarily the case here. So long as the company does not claim that you are a independent contractor, they're fine, although, they would then incur the same tax liabilities as if he were a normal employee.

That might be fun. Print out the IRS page from the link above and ask your new "employer" if your position is an "independent" contractor or not, and if they answer yes, show them the article, and ask them if that means they're going to pay your SS and unemployment taxes, and if they are going to do your Federal withholding.

TTFN

FAQ731-376

 

[Gymmeh]

nice... get them thinking!

I have come up with basically three proposals.

1) Hire me full time right off the bat with benefits at $18
with written guaranty of review and min raise upon positive review of $23.50/hr.

2) Signing bonus of $3000, to pay or COBRA, till they hire my full time. And $18/hr

3) Treat me like a contractor at ($35/hr) NO less then $32/hr


Obviously I want option 1 cuz it is less hassle for me.

 

[Gymmeh]

SO…I went in for the interview and turned down the offer because they would not match my job.

They called me the other day saying they want to revise the offer to match what I make now, job title, and match benefits, with salary review within 3 months for a raise.

I think I am going to take the job, even though it is technically “lateral” movement, making a complete industry change to move into a place with 4 engineers doing valve and gage design.

Thanks for your advice! If you still think I am really crazy… let me know in a hurry!

 

[vc66]

Good luck! And make sure you get that salary review in 3 months IN WRITING.

V

 

[Gymmeh]

VC, already done!