Re: FWD: Seeking assistance-contract rates

Subject: Re: FWD: Seeking assistance-contract rates
From: "Jeanne A. E. DeVoto" <jaed -at- jaedworks -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 21 Feb 2000 13:09:10 -0800

At 6:42 AM -0800 2/21/2000, anonfwd -at- raycomm -dot- com wrote:
>1 - I understand that agencies may charge clients anywhere from 25% to
>100% of the rate they offer consultants. In other words...the agency pays the
>consultant $45 per hour, but they collect $75 to $90 per hour from the
>client. Is this correct??

It depends. Are you working for the contract agency, on their site, using
their equipment, as part of a team working on a solution for the client? If
so, this markup is not unreasonable.

Or are you working at the client's site (or yours), under client
management? If so, the high end of that markup is too high. For the agency
to take 25-35% of the total is reasonable; 50% is absurdly high. (Which is
not to say it doesn't happen. It's fairly frequent, though some client
companies have policies against it for the agencies they use.)

Other things that may change what's considered "reasonable" include the
level of benefits provided by the agency. Most contract agencies provide
minimal or no benefits. If yours provides paid vacation, paid-for health
insurance, or other benefits out of their markup, a higher amount may be

>2 - This would be an hourly rate contract, at 40 hours per week. Is the
>agency obligated to pay time and a half for overtime? Or just straight
>rate regardless of the total number of hours per week?? BTW...Peter Kent
>discusses this topic in this book and seems to be of the opinion that
>should receive OT pay, at time and a half.

Whether the agency is legally obligated to pay a differential for overtime
depends on your state laws. Some require it, some do not, and some require
it only if the hourly wage is below a certain level. Check your local laws.

Many agencies pay time and a half whether they're legally required to or
not, and my impression is that it's usual to do so but not universal. This
should be spelled out in the contract you sign with the agency.

>3 - The recruiter mentioned I would need to sign a contract....any
>insights or web sites to recommend on what to watch out for when signing a

As with any contract, read it carefully and make sure you understand it
before signing. Don't let yourself be rushed or harried into signing
something you're not sure about.

Agency contracts typically include information about payment and
timesheets, a nondisclosure agreeement, an intellectual-property agreement,
and a noncompete agreement.

Watch the noncompete agreement carefully for reasonableness. The agency
understandably does not want you taking advantage of the contacts they've
made to find yourself a permanent job or another contract at the company
without the client paying the agency their cut. But some agencies will give
you a contract that, for example, locks you out of all jobs at a Fortune
500 company for the next two years, even if you have your own contacts in
the company that are unrelated to the agency. (I tend to solve this one by
specifying the division or group they've gotten me a contract at, rather
than the entire corporation, if this is the situation and the company is a
large one.) These agreements are unenforceable in some states, so again,
check your local laws. I personally don't like to sign something I'm not
willing to abide by, but if a contract provision is legally unenforceable,
it probably doesn't make a practical difference whether you sign it or
strike it out.

Check the nondisclosure agreement and make sure it covers only information
you learn in the course of your employment, that's not made public by the
company. I once knew someone who was fired for mentioning, on a BBS, a new
product that the company CEO had discussed extensively and on the record in
a newspaper interview the previous week. Since then, I'm never careless
about reading an NDA. Similarly, the NDA should not cover stuff you already
know or learn from a non-work-related source. It should bind you only to
keep confidential the non-public information you learn at work.

The intellectual-property agreement outlines what creations of yours -
writing, software, etc. - belong to the company. This should not include
creations you make on your own time, with your own equipment, and not using
any company knowledge. Once more, IP agreements that try to snatch rights
for everything you create while working for the company are often
unenforceable under state law, so check first.

jeanne a. e. devoto ~ jaed -at- jaedworks -dot- com

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