Self-Employment for dummies

June 9, 2009 6:13 AM

(Self-employment-Filter) What should I know about / be aware of when contracting for a local university?

I know you're not my accountant, so I'll get that out of the way now.

I have been temping at a local university in my current position for close to 6 months as an assistant in an administrative capability. My boss is leaving at the end of the month, and I am effectively taking over her job, but there's a snag: due to the economy, there is a campus-wide hiring freeze. I've been temping in total for closer to 20 months, so at this point I would like to cut out the middleman. Even after paying the employer half of payroll tax, the difference in gross pay is substantial enough to make it worth my time.

I will be meeting with my boss's boss to discuss employment arrangements, and at that time, I would like to propose that the department pay me directly as a contractor, paying me the same rate (or maybe slightly more to reflect additional responsibilities) as they paid the temp agency. I'd like to be armed with some knowledge about self-employment though. I know the basics, like filing Form SE, and paying quarterly, but I'm looking more for the pitfalls to avoid, and maybe a link or two to something less opaque and confusing than the IRS site. Can you tell me what I should aware of? Can you pass along mistakes you (or others) have made, so I might avoid them?

Relevant details:
Massachusetts resident
Newly married (this will be the first year filing as married)
Wife makes similar salary
Insured through wife's job (no insurance worries, really)
No kids
Renting an apartment
The job will be the same, just removing the temp agency from the equation

posted by explosion to work & money (7 comments total)

Honestly, either their general counsel's office will draft a document, or you should consult an attorney for the contract. Also, depending on the rules in your state you would probably be well served to become an LLC (not hard or expensive) to protect yourself from any liability issues.

Tax stuff I'm not able to speak to.

Good luck!
posted by Ponderance at 6:25 AM on June 9

ALSO, check your contract from the temp agency, you may have a non-compete in there that you will be blatanly violating.
posted by Ponderance at 6:26 AM on June 9

Generally your temp agency would have a contract with their client (the university) specifying what would happen if they were to hire your (their temp) directly ... normally this would involve a cash payment to the agency, which would be significant.

If the university were to do this "on the sly" this would be a breach of contract, and not speak highly for the university's sense of ethics. It would also indicate that they would be more than happy to screw you at a later date.

also ... IAAL, IANYL, TINLA
posted by jannw at 6:29 AM on June 9

Yeah, your biggest hurdle is going to be the temp agency; they nearly always work pretty hard to prevent exactly what you're trying to do, either through non-competes written into their contract with you, hefty fees written into their contract with the employer, or both.

If you can get past that, you're in pretty good shape; the fact that you have real insurance simplifies things enormously.
posted by ook at 6:33 AM on June 9

If the University is a big customer, the agency will want to keep them happy. After 20 months, they may be able to hire you by paying a bonus to the agency. They may prefer to continue working with the agency. Keep in mind that you can ask for a raise from the agency.
posted by theora55 at 6:44 AM on June 9

The temp agencies have 3- or 6-month limits around here. I did this once before, but it was only for 3 weeks before I moved to another city, so I just reported the money as income at the end of the year and left it at that.

Since it will have been 6 months by the time they would "hire" me, this is something that I'd look into just to be sure, but I'm not really concerned about it.


If the university were to do this "on the sly" this would be a breach of contract, and not speak highly for the university's sense of ethics. It would also indicate that they would be more than happy to screw you at a later date.

I don't specifically want to name it, but by "local university" I mean "nationally/internationally known university." I'm in the Boston area, we have quite a few of them here.

Thanks for the answers so far!
posted by explosion at 6:46 AM on June 9

I gave some links about independent contracting here. Maybe they will help you.
posted by Houstonian at 7:18 AM on June 9 [1 favorite]