Should I Take a W-2 Project???
This post is in response to a question posed by the AICN (Alliance of IEEE Consultant’s Networks.)
A company posted a “consulting position” on the Consultant’s Finder that sounded a lot like an employee (W-2) search. This prompted a discussion by members is this was appropriate for the site, and whether a consultant should even accept a W-2 project.
The general consensus was it was OK, but several of us had caveats. Here is my response:
Agree re posting. Looks like a W-2 situation, but if that is acceptable to respondents, fine. But has been pointed out, everything is negotiable.
Had that happen early in my consulting career, when a client responded to my quote (through a contracting firm) with a W-2. That was when the IRS first had their shorts in a knot about technical consultants. The contracting firm changed that to a 1099 project after I provided proof that I had multiple clients, web site, etc.
No problems, and it was all friendly. But I was willing to walk if we could not reach an agreement.
As a result, we adopted firm policies of NOT accepting W-2s, non-compete terms, or guarantees. In 35 years we never lost business, but sometimes it took a brief explanation. As independent consultants, we are free to run our businesses as we see fit.
My two cents… to each their own…
Daryl
Full Disclosure — I am a long time member of both the IEEE and the AICN, and can recommend both for technical consultants.
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All excellent points.
I would add as an independent contractor/consultant, I am not an “employee”. I don’t know about your location, in Colorado law the independent contractor “is free from control and direction in the performance of services, both under contract and in fact”.
During downturns in business, I’ve known companies to lay people off and then immediately hire them back as long term contractors. To the extent that some co-workers had no idea what was going on. The company behavior in this respect is sometimes questionable, those people were sometimes treated as if they were a full time employee. Especially true for a few first-line managers who attempt to “crack the whip” on their contractors.
All the best, Doug
Thanks, Doug. It is my understanding that companies recategorizing employees as contractors is one reason the IRS got involved in the first place. Like you, I have always been adamant about not being an employee of anyone except my own firm (a subchapter-S corp.)
Some companies use contracting firms who hire their own employees, but even then I insist on being treated as an independent contractor/consultant and not an employee of the contracting firm. Keeps it clean that way. All the best to you as well!