What an I negotiate for in my new job?

October 9, 2012 2:56 PM

I was told the job was salaried, they offered to me but as a freelancer. Can I use this as a negotiating strategy?

I want this job and told them I'm down, but the final details have yet to be sorted out. Is there anything I can negotiate for considering I'll be working 40 hours full time in office but without benefits and as a 1099 freelancer?

I'd need a smartphone for the job and I'm not eligible for an upgrade. Should I ask them to pay for me breaking my contract (about $122) or to pay for the new smartphone ($99)? Or is it within reason to pay for me to consult with/hire a cheap accountant to withhold and file quarterly earnings so I don't get screwed at the end of the year?

How can I use this to my advantage?

posted by You Guys Like 2 Party? to Work & Money (24 answers total)

That's always kind of sketchy: if you're working full time, at their facilities, and under their direction, you're really not a 1099 contractor.
posted by Oktober at 3:02 PM on October 9, 2012 [16 favorites]

They need to be paying you A LOT MORE. Like, double. Also, they may be violating federal law.
posted by KathrynT at 3:03 PM on October 9, 2012 [12 favorites]

Your negotiation stance should be that whatever your salary was going to be as a salaried employee, it should be 50 to 60 percent higher as a contractor, with actual overtime whenever you work over 40 hours a week.
posted by jsturgill at 3:03 PM on October 9, 2012 [4 favorites]

Response by poster: That's always kind of sketchy: if you're working full time, at their facilities, and under their direction, you're really not a 1099 contractor.

Yeah, I know, I know, I've done it before, it's in an industry where this happens occasionally. I don't love it but it's a hell of a lot better than what I have now.
posted by You Guys Like 2 Party? at 3:04 PM on October 9, 2012 [1 favorite]

Response by poster: Your negotiation stance should be that whatever your salary was going to be as a salaried employee, it should be 50 to 60 percent higher as a contractor, with actual overtime whenever you work over 40 hours a week.

It's a small company (11-13) people, I'm not sure how feasible 50 to 60 percent is. But can you tell me how I would justify asking for something like this? I don't think I have the words. What do I say?
posted by You Guys Like 2 Party? at 3:06 PM on October 9, 2012 [1 favorite]

Best answer: You have to pay the employer portion of the Social Security tax yourself as a 1099 employee - there is 7.5% right there. Then factor in all the benefits you are not getting such as insurance, vacation, etc. plus the hassle factor of making quarterly estimated tax payments and 50% is being generous - to the company. There is also the risk factor that contractors always get cut first, you probably won't be eligible for unemployment if and when you are laid off, although that may vary by state. I would start the negotiating at double and settle at 50% only if you desperately want the gig. Any less and you stand a chance of actually making less in long run than you would as an employee.
posted by COD at 3:10 PM on October 9, 2012 [19 favorites]

As a contractor you pay more taxes, have more legal responsibilities, fewer legal protections, no benefits, and cost the company a lot less than a salaried employee. 50% more than the equivalent salaried wage is simply making you whole. It is not asking for more compensation, it's asking for the same amount.

If they actually started out with negotiations as though you would be salaried, and then switched the terms up on you, they are actively, aggressively, knowingly trying to take advantage of you.
posted by jsturgill at 3:15 PM on October 9, 2012 [26 favorites]

yes, this is sketchy if you are working on-site, with their equipment, as a 1099—unless you are working as a contractor. i contract at a company, go into the office every day and use their equipment but i am W2 through my agency (therefore am an employee of my agency and not an employee of the company for whom i do work), so you need to figure out what exactly is the deal.

but if you can't walk away from this job then they have you over a barrel and you are not in a position to negotiate.
posted by violetk at 3:22 PM on October 9, 2012

I would start the negotiating at double and settle at 50% only if you desperately want the gig.

This, times a million.

It would be very foolish to take this job for anything close to the same wage as a full-time employee. It is extremely expensive to be a contractor. You will be making half of what you think. This is super shady, and you should walk away if you do not get a serious, serious bump in money.
posted by wrok at 3:57 PM on October 9, 2012

It's partially a matter of where you work, and how you work. It's also a matter of control. As a contractor, you are not afforded the same protections as an employee. Hence, the employer cannot technically tell you "how" to do your job, as you are only responsible for your output.

Contractor or Employee? [irs.gov]

Further, as you can experience financial loss as a contractor, and incur additional costs (taxes, indemnity insurance, etc.) you need to be asked to pay more.

50-60% is a starting point. Depending on the duration of the contract, you need to charge a lot more than as an employee.
posted by nickrussell at 4:21 PM on October 9, 2012

What benefits and equipment do the other employees receive to use besides phones? They will probably be willing to foot your phone and some other expenses unless this position is very standardized. I'd also ask for some mileage and yes, if you are not already set up to contract get them to help as part of on-boarding. You will also be able to push for an amount higher than what they're paying but less than the total cost of an employee. If you want the kinds of amounts in the other answers be prepared to walk away from this, because they probably won't pay.
posted by michaelh at 4:30 PM on October 9, 2012 [1 favorite]

Response by poster: I can't walk away. I already quit my other job. I'm dumb. I know. I was making minimum wage before this.
posted by You Guys Like 2 Party? at 4:34 PM on October 9, 2012

Best answer: I don't think I have the words. What do I say?

"My rate is $X/hr" where $X is twice the rate you would expect for a full time, salaried position.
posted by deanc at 4:38 PM on October 9, 2012 [1 favorite]

Best answer: "My rate is $X/hr" where $X is twice the rate you would expect for a full time, salaried position.

And if you feel awkward about this because you've already had the salary discussion earlier in the process, then you say "Oh, I'm so sorry, there must have been a miscommunication! My 1099 rate is $X."
posted by KathrynT at 4:53 PM on October 9, 2012 [6 favorites]

Response by poster: I already accepted the job... Aren't I negotiating from a position of weakness? What if they tell me to fuck off?
posted by You Guys Like 2 Party? at 5:04 PM on October 9, 2012

You accepted the job as a contractor or a salaried employee?

Worst case - you take it for a few months, build your resume and leave. If the didn't commit to you as an employee then you don't owe them much in the way of loyalty.
posted by 26.2 at 5:11 PM on October 9, 2012

They're trying to take advantage of you, and it's illegal. I've had colleagues (whom I consider to be legitimate freelancers, doing the same kind of work in the same conditions I do as a freelancer) get classified as "employees" of their clients during audits. These were people who working random days every once in a while for a lot of different clients, bringing some of their own tools, and going to different locations on different jobs with different responsibilities. Basically the opposite of showing up for one job on one project with one employer at their office.

So yeah asking for double the amount of money is what I would do, because they're trying to give you the same amount as a salary person but off-put all the costs (taxes, medical insurance, administration, and even your phone, etc.) onto you.

It sounds like you are kind of in a corner and don't have much leverage now, but what I would have done when they brought up freelancing is, "That's a different job than I thought I was applying for, so let's start this discussion over" and then doubled whatever the salary was before.
posted by bradbane at 5:13 PM on October 9, 2012

Best answer: I'm dumb. I know. I was making minimum wage before this.

Hey, let me lighten your burden a little bit. Some of the answers here feel kind of intimidating to me and I've been working with contractors for a very long time. If this is your first foray into negotiating your own deal, there is nothing wrong with taking it easy and asking for just a bit more than you need or want so that you have some room to haggle with.

Having a business phone on it's own line should be no problem. Asking for a bit more pay to compensate for health/dental should be no problem. I wouldn't over shoot too much though because if this was originally a salaried position that was downgraded to contract, their goal was to eliminate those extra costs.

I think you're on the right track. Go in and ask for some stuff, and be prepared to not get everything that you want. That is not to say though, that you haven't done a good job getting this position in the first place. Good Job!
posted by snsranch at 5:14 PM on October 9, 2012 [1 favorite]

The other side of this is that there are forms you can file if you've been misclassified, and the government can go after them for the taxes they should have been paying, the benefits you were due, etc. But this is of course only useful once you have a new new job, because this company is going to completely take advantage of you and squeeze you for every last penny.
posted by jeather at 5:17 PM on October 9, 2012

Response by poster: Sooooooooooo... After I called them earlier and told them simply that being a contractor means I'd be making less money than we agreed about... they just called me back and offered me a job as a full time employee. I didn't ask for 50% more because honestly... I'm a young guy and this is more or less an entry-level position, but for real, Metafilter, you helped me out so much. Thank you guys. It's all good. We won.
posted by You Guys Like 2 Party? at 5:25 PM on October 9, 2012 [45 favorites]

That is awesome! Good job advocating for yourself!
posted by KathrynT at 5:53 PM on October 9, 2012 [2 favorites]

Fabulous! It's always great when the story has a happy ending.
posted by alms at 6:13 PM on October 9, 2012 [1 favorite]

Best answer: Yay! Upthread, you said things like "I am dumb." You are not; you are merely inexperienced.
posted by ocherdraco at 6:20 PM on October 9, 2012 [5 favorites]

Response by poster: Thank you guys again. This means so much to me.
posted by You Guys Like 2 Party? at 12:47 PM on October 10, 2012 [3 favorites]