Direct hire v.s. contract

[NJBest]

Originally Posted by kevinm

Contract employees are reported as an "expense" and so the cost is tax deductible. Also, they don't have to play your unemployment insurance when they let you go.

Salary for a fulltime employee is deductible as well.

[rockerrockstar]

The problem with these contract jobs is most don't last past 6 months. Then you have to start looking for another job. Second no paid vacation and sometimes no paid holidays. You will see the directs getting all the great holidays and vacation days but you wont get them. One thing most contractors like is the Per Diem, unpaid time off they can take, and time and half for over time. Most contractors don't take time off even unpaid from what I have seen. I do though because I believe that you should have some time off now and then to enjoy life. But I normally don't get but a few days off. They normally lay me off in July or September so that I can't get any holiday pay if there is any.

I have noticed lately companies have been trying to offer really low wages for contractors. It is wrong. They sometimes offer less then what you would make as a full time employee. Hope enough people reject there offers and they have to offer more. I think part of the problem is them bringing in foreign engineers to work for less. I have got contract jobs in the past that paid real well and still do see some that pay decent. It all depends on the job and location and the company. Of course the market is in bad shape now but I think for Engineering it is not doing that bad. I have been getting a lot of agencies calling lately.

What you got to think about is not only the fact these contract jobs don't come with Benefits (most of the time) but they will most likely leave you unemployed for a while after the contract is done. So then you will need to have money to survive to the next job. So keep that in mind when thinking about your rate and if you want to be a contractor or direct. It is all a matter of how easily you think you can get your jobs. If you are one that can find another gig fast and not lose much money you may like contracting.

I think it sucks that it is so difficult to get a direct job some times because companies are on these hiring freezes and if anything only hire contractors. But I do agree sometimes they will try to hire the contractors direct.

Other things I like about contract jobs is being able to move around and try out different locations to live and places to work. Learning new things is always good to. I think it helps you build your resume. The only issue is if you get too many contract jobs then it may be a little hard to find a direct job latter. But I still think you can just contract around tell you find a company that want to hire you direct.

[pvande55]

If hired as independent contractor, be sure to deduct travel to the job site and any tools or materials used on the job. You are losing certain benefits, so take advantage of the tax benefits.

[313Weather]

Originally Posted by TheStupid

To an employer, what's the difference between direct hire and contract? I don't quite understand why so many companies are only hiring under contract.

They're both technically "contracts", just different contracts.

Usually though, when companies say they're hiring workers under contrct, that means they're looking to hire self-employed people, or 1099. That essentially means you work on your own time, you don't get any benefits and you must have all of your own taxes (employer and employee side).

However, direct-to-hire means that they're hiring you as a temporary worker now with a good chance that they'll hire you in permanently if your performance is good. They do make you sign a contract though to show that you are legally aware that the job may just only be temporary. And until being hired in permanently, you don't qualify for benefits.

[Roxette]

Hi,

I was wondering if it is legal for a company in California to hire contractors for another company (as W2 contractors) and never give them any written contract.
Kelly Engineering operates this way.

In other words it is never clear on paper when the contract ends.

Thanks

[MSchemist80]

1099 is illegal except under very few circumstances. The IRS will hammer the company if the employee files an ss-8 and in almost all cases the IRS rules the worker is an employee.


The worker is an employee if...

You or your representative tells the worker where, when, and how to work.
You train the worker.
The business performance depends on the worker.
The worker has a continuing relationship with the company.
The worker's services must be personally rendered by the him/her.
You set the worker's work hours.
The worker works on the employer's premises.
You are paid by the hour, weeks, or month.
You furnish tools and materials.
You can fire the worker without violating a contract.
The worker has a right to quit without incurring a liability.
The worker does not offer the worker's services to the public at large.
The worker has no opportunity for profit or loss as a result of the worker's service.
The worker has no significant investment in the business.
You require the worker to submit oral or written reports.
The worker is a corporate officer.

[MSchemist80]

Originally Posted by Roxette

Hi,

I was wondering if it is legal for a company in California to hire contractors for another company (as W2 contractors) and never give them any written contract.
Kelly Engineering operates this way.

In other words it is never clear on paper when the contract ends.

Thanks

There should be some contract with both you and Kelly and Kelly and the employer. As for ending date it is pretty much at will. My ending date was 2 years ago they just keep extending it with the staffing company so I have a job (albeit a lousy one) as long as they decide to continue funding the contract.