Re: FWD: Seeking assistance-contract rates

Subject: Re: FWD: Seeking assistance-contract rates
From: Kimberly <JKWilson -at- concentric -dot- net>
To: <TECHWR-L -at- lists -dot- raycomm -dot- com>
Date: Sat, 04 Mar 2000 16:19:12 -0500


At 02:42 PM 02/21/2000 +0000, you wrote:

Hello fellow techwrls

I have been offered a contract position through a nationwide recruiting
agency. My concerns are three fold -

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??
That is correct. This is the only way the agencies pay their overhead costs (office, equipment, advertising, payroll costs, etc.). I wouldn't worry too much about how much margin they are charging. That's between them and the client. Just negotiate for the rate you want to be paid. Most companies have a fixed price with the client and adjust your rate from their margin (increasing or decreasing their margin, that is). You'd be surprised how much they are willing to narrow their margin, sometimes.

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 contractors
should receive OT pay, at time and a half.

In some places there are state laws that govern this. In Georgia, for example, the state sets an hourly rate threshold. Rates below this are considered "hourly" jobs and receive 1.5 for overtime. Rates above the threshold are considered "salaried" positions that receive straight time for overtime. If the company pays you a real salary, for 40 hours regardless of how many actual hours you worked, then they don't even have to pay you straight overtime.

Just ask when you're negotiating and have the understanding clear and in writing. Also ask what the company's view of OT is...sometimes they'll tell you outright that they don't like overtime and would prefer that you not do it, or that it's ok for important projects, but get it approved in advanced. These are important questions to ask.

And, from my personal philosophy, I would avoid frequent overtime. First, if you do overtime all the time, it leads your employers to mistaken conclusions, such as: 1) that what it took you 60 hours to produce is a "normal" amount of 40 hours' work, then they'll expect that much work every week; 2) that you are slow and incapable of completing work within the schedule; 3) that you are a mercenary intent on milking the company; 4) that you are in over your head and won't ask for help; 5) that you can't manage your time or adjust priorities, etc. IME, it works better to go back to the boss and explain that you cannot complete the work in the allotted time and WHY, then ask them how they want to handle it (offer OT if you are willing). Don't forget to "swap" hours, too, if it helps. Sometimes I bust my ass and work three 12-hour days to finish a project by deadline, then work the remaining 4 hours in the week and take Friday off. I haven't worked overtime, but I got the project done on time.

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

Most contracts are standard but make sure you actually READ IT! Don't let the recruiter rush you. Expect to see some kind of penalty for doing an end-run around your agency (quitting the agency to work directly for the client, thus cutting the agency out of their rightful placement fee). However, be careful about any penalties the contract inflicts for leaving without giving sufficient notice or before the end of the contract. These are not very standard, and in many states they aren't even enforceable. (And, after all, they can fire you without notice, why shouldn't you be able to quit without notice? It's unprofessional and a bad practice, but they should not be able to inflict a monetary penalty on you for it.) Same goes for penalties for "stealing" other employees when you leave. These aren't usually enforceable.

BTW, if you don't like the terms of the contract, feel free to cross out and/or change the terms you object to. Contracts are negotiable, after all, but most recruiters balk at the idea of having to draw up a whole different contract from scratch. They often don't realize that the scratch-out method of contract modification is legal. Get them to initial the changed parts and sign the whole thing. Same goes for any other legal paperwork they ask you to fill out. Don't freak if they say they'll have to get it approved by a higher-up. Stand your ground if it means something to you (and if it doesn't, why are you making the fuss to begin with?). Always get a copy for yourself at the same time you sign it.

Atlanta GA

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