Contract Employee, Without the Contract
March 7, 2013 1:32 AM Subscribe
I'm a newbie web developer and I've been working my first real coding job for about a month. Help me make sure I am covering my ass and getting compensated fairly.
tldr; Should I be paid for every hour worked, even though I'm learning and require more hours to get the job done than a normal dev? And, how weird it is that I never actually signed agreement about my rate and the work required? Looking for perspective on norms in the biz.
Position: jr. backend dev
location: a web dev firm
How long: about a month.
Experience: Some coding in college (graduated in the past year), but it was not the focus of my degree. Though I have demonstrated aptitude, my web dev knowledge is really basic. I've never really built anything.
I got the job through a friend that works there. I was looking for work for months before this gig, so I was really happy to get it. With the combination of my desperation for work with my lack of experience, and I'm wondering if I've sold myself short a little.
Rate: My hourly rate is in the $30-$40 range. I think that's fair.
The Project: So far I've been doing maintenance work for an existing project/client that requires a fair amount of regular upkeep, about 6-10 hours per week for the Sr. Dev I took over from. I'm new and I'm learning a lot, so I take longer than he would. No matter how long I actually take to do the work, we've still been billing the client about the amount of time it would take the Sr. Dev to do it (and maybe a little more). This is so we stay within what was quoted to the client. Then, I get paid for the exact number of hours we billed them for, not the number of hours I actually worked.
My Question: Should the firm be paying me my rate for every hour I've worked? Even if my competency is lower than what a normal dev's would be? Even if my friend is basically helping me out and finally giving me an opportunity to start my career?
My interpretation of the situation is: There's kind of an understanding that I'm inexperienced, they're going to give me projects that help me grow essentially groom me into a dev, but that I'm going to have to write off a lot of my learning hours as unbillable. My reasoning is that it's not ideal, but it's better than an unpaid internship / open-source project / startup, which I think a lot of people with my experience start out in.
Contract I never signed a contract with my rate and everything on it. (I know, I know). I thought this was weird. After the initial interview, I negotiated the rate. Then a couple days later when started work, I said to my lead, "Shouldn't I have to sign anything?" He went and talked to the PM for a moment and then came back and was like, "No, you're good." I didn't want to look like a fool/ass, so I let it go.
---Conclusion---I'm about to be start on a new project, and I think I'll soon have an opportunity to renegotiate the pay/hours worked issue, and the contract issue, without implying "I don't trust you people at all." It's going to be my first build from the ground-up, and it's going to take a ton of "extra" hours for me to wrap my head around everything. I need to know what's reasonable of me to ask. If I sign a contract, what needs to be on there?
tldr; Should I be paid for every hour worked, even though I'm learning and require more hours to get the job done than a normal dev? And, how weird it is that I never actually signed agreement about my rate and the work required? Looking for perspective on norms in the biz.
Position: jr. backend dev
location: a web dev firm
How long: about a month.
Experience: Some coding in college (graduated in the past year), but it was not the focus of my degree. Though I have demonstrated aptitude, my web dev knowledge is really basic. I've never really built anything.
I got the job through a friend that works there. I was looking for work for months before this gig, so I was really happy to get it. With the combination of my desperation for work with my lack of experience, and I'm wondering if I've sold myself short a little.
Rate: My hourly rate is in the $30-$40 range. I think that's fair.
The Project: So far I've been doing maintenance work for an existing project/client that requires a fair amount of regular upkeep, about 6-10 hours per week for the Sr. Dev I took over from. I'm new and I'm learning a lot, so I take longer than he would. No matter how long I actually take to do the work, we've still been billing the client about the amount of time it would take the Sr. Dev to do it (and maybe a little more). This is so we stay within what was quoted to the client. Then, I get paid for the exact number of hours we billed them for, not the number of hours I actually worked.
My Question: Should the firm be paying me my rate for every hour I've worked? Even if my competency is lower than what a normal dev's would be? Even if my friend is basically helping me out and finally giving me an opportunity to start my career?
My interpretation of the situation is: There's kind of an understanding that I'm inexperienced, they're going to give me projects that help me grow essentially groom me into a dev, but that I'm going to have to write off a lot of my learning hours as unbillable. My reasoning is that it's not ideal, but it's better than an unpaid internship / open-source project / startup, which I think a lot of people with my experience start out in.
Contract I never signed a contract with my rate and everything on it. (I know, I know). I thought this was weird. After the initial interview, I negotiated the rate. Then a couple days later when started work, I said to my lead, "Shouldn't I have to sign anything?" He went and talked to the PM for a moment and then came back and was like, "No, you're good." I didn't want to look like a fool/ass, so I let it go.
---Conclusion---I'm about to be start on a new project, and I think I'll soon have an opportunity to renegotiate the pay/hours worked issue, and the contract issue, without implying "I don't trust you people at all." It's going to be my first build from the ground-up, and it's going to take a ton of "extra" hours for me to wrap my head around everything. I need to know what's reasonable of me to ask. If I sign a contract, what needs to be on there?
Response by poster: I believe senior devs are getting paid a much higher rate (or equivalent rate based on salary).
posted by victory_laser at 2:06 AM on March 7, 2013
posted by victory_laser at 2:06 AM on March 7, 2013
As a junior you should be closely supervised, and you should be given tasks with limited scope and a clear way to implement them. That's why juniors are paid a lower rate, they are less productive and take more time to do less.
If you are having to self supervise, and determine your own scope, then that's a. inefficient for your employer, and b. you should be being compensated for that.
You should probably have a contract, but verbal agreements can serve as contracts in australia. I don't know about what country you're from.
posted by singingfish at 2:21 AM on March 7, 2013
If you are having to self supervise, and determine your own scope, then that's a. inefficient for your employer, and b. you should be being compensated for that.
You should probably have a contract, but verbal agreements can serve as contracts in australia. I don't know about what country you're from.
posted by singingfish at 2:21 AM on March 7, 2013
Sorry, I misread - if you're getting paid for the hours they would have billed the senior dev but at your lower rate then yeah, you may be getting stiffed. Sn Devs should make more than juniors even for the same number of hours though because experience makes them better coders (or should!) not just faster. FWIW though, my first web dev job I was paid for all my hours but I was only making about $10 an hour. My next job paid about $20 an hour with 6 months experience. I didn't make $30 an hour until I had over a year of full time experience and that was a very, very good wage (salaried positions though so I didn't have the extra expenses of being freelance).
Have you checked your expectations against what other junior web devs are making in your area?
posted by missmagenta at 2:25 AM on March 7, 2013
Have you checked your expectations against what other junior web devs are making in your area?
posted by missmagenta at 2:25 AM on March 7, 2013
Do you think you should earn more than the senior dev for the same amount of work just because it took you longer?
Not the point. Contract or non-contract temps earn more because they don't get bennies and you can let them go without any buy-outs, pay-outs, COBRA, etc, not even so much as a thank you. This provides great flexibility to companies and they should be willing to pay a premium to those poor souls who accept this risk-filled way of earning a living.
I don't work with software, but I am a contractor/consultant, and generally I have a non-contract rate which is rather significantly higher than what I would ask for under a guaranteed contract.
If you are working temp without a contract your rates should be at the top end of the scale.
posted by three blind mice at 2:56 AM on March 7, 2013
Not the point. Contract or non-contract temps earn more because they don't get bennies and you can let them go without any buy-outs, pay-outs, COBRA, etc, not even so much as a thank you. This provides great flexibility to companies and they should be willing to pay a premium to those poor souls who accept this risk-filled way of earning a living.
I don't work with software, but I am a contractor/consultant, and generally I have a non-contract rate which is rather significantly higher than what I would ask for under a guaranteed contract.
If you are working temp without a contract your rates should be at the top end of the scale.
posted by three blind mice at 2:56 AM on March 7, 2013
This reminds me of when I was 20 and desperate and took a job as an apprentice mechanic without negotiating pay. At the end of the first week the garage owner gave me $200 in cash for what had been around 50 hours' work. I did not return on Monday.
It's not clear whether you're an employee or an independent contractor. If you are a contractor then the company you're working for is your client, and you should be asking them to sign something that says what they're getting, what they will pay you for it, and when.
Rate: My hourly rate is in the $30-$40 range. I think that's fair.
The rate at which your client bills their client for your services doesn't matter. *Your* rate is the rate at which you get paid for the time you actually work.
It sounds like this company is taking advantage of the fact that you don't know how to be an independent contractor. It's up to you, not them, to establish some professional boundaries. But you can't assert yourself unless you have other options. If you are going to be an independent contractor then you need more than one customer, or you're just asking to be walked all over.
posted by jon1270 at 4:25 AM on March 7, 2013 [3 favorites]
It's not clear whether you're an employee or an independent contractor. If you are a contractor then the company you're working for is your client, and you should be asking them to sign something that says what they're getting, what they will pay you for it, and when.
Rate: My hourly rate is in the $30-$40 range. I think that's fair.
The rate at which your client bills their client for your services doesn't matter. *Your* rate is the rate at which you get paid for the time you actually work.
It sounds like this company is taking advantage of the fact that you don't know how to be an independent contractor. It's up to you, not them, to establish some professional boundaries. But you can't assert yourself unless you have other options. If you are going to be an independent contractor then you need more than one customer, or you're just asking to be walked all over.
posted by jon1270 at 4:25 AM on March 7, 2013 [3 favorites]
You'll probably agree to a day rate eventually. Billing hourly is a pain in the arse for you and them. I hate counting hours. Go for 300-400 or something. Oh, assuming you're there on a full timish basis
posted by mattoxic at 5:00 AM on March 7, 2013
posted by mattoxic at 5:00 AM on March 7, 2013
jon1270 has it. I made the same mistake with my first contract job. Did they give you a W9 or W4 to fill out?
If it's a W9 you are not a "Contract Employee". You are not an employee at all. You are an independent contractor. In the US this means something very specific to the IRS, and you need to read up about estimated quarterly taxes and SS.
If they gave you a W4, you have standard working hours, or benefits, you are an employee. If you negotiated a wage, you are likely a non-exempt employee and should be compensated for all hours worked.
If they didn't give you either a W9 or W4, you are working off the books.
If they did give you a W9, and ESPECIALLY if you're working off the books, for the next job you've got coming up you should write something very simple, in normal-human speak, saying "Dear So and So, I'm very happy to have the opportunity to work for Dev-Corp at the rate of $35/hr as a contractor. Thank you for entering into this agreement with me and for your signature below."
Then you log your time and invoice them. The hours you log are up to you. Make no mistake, they are making money off of you, don't have any compunctions about how inefficient you are.
Keep copies of this contract, all invoices, all pay-stubs. Filing your taxes as a W9 employee sucks. Filing it as an off the books worker is hell and puts you at a huge risk of being audited.
There are more detailed, state specific employment laws, and I'm not any kind of lawyer or accountant. Just a formerly naive contract worker myself.
posted by fontophilic at 6:39 AM on March 7, 2013
If it's a W9 you are not a "Contract Employee". You are not an employee at all. You are an independent contractor. In the US this means something very specific to the IRS, and you need to read up about estimated quarterly taxes and SS.
If they gave you a W4, you have standard working hours, or benefits, you are an employee. If you negotiated a wage, you are likely a non-exempt employee and should be compensated for all hours worked.
If they didn't give you either a W9 or W4, you are working off the books.
If they did give you a W9, and ESPECIALLY if you're working off the books, for the next job you've got coming up you should write something very simple, in normal-human speak, saying "Dear So and So, I'm very happy to have the opportunity to work for Dev-Corp at the rate of $35/hr as a contractor. Thank you for entering into this agreement with me and for your signature below."
Then you log your time and invoice them. The hours you log are up to you. Make no mistake, they are making money off of you, don't have any compunctions about how inefficient you are.
Keep copies of this contract, all invoices, all pay-stubs. Filing your taxes as a W9 employee sucks. Filing it as an off the books worker is hell and puts you at a huge risk of being audited.
There are more detailed, state specific employment laws, and I'm not any kind of lawyer or accountant. Just a formerly naive contract worker myself.
posted by fontophilic at 6:39 AM on March 7, 2013
You should get paid for every hour worked but your hourly rate should reflect your slowness.
This is partially why more experienced people can charge higher hourly rates - they're more efficient with their time and don't have to spend as much time learning the basics on the job. (Instead, they get to spend their time learning more complicated stuff on the job! The learning on the job bit never really ends. This is a good thing.)
Contracts are good. Contracts let you do stuff like put in extra cost to them if they pay you late (or more politically, a high rate plus a bonus to them if they pay you 'early').
Do keep in mind that your costs and taxes and risk are higher as an independent contractor than as a salaried employee, so you need to charge more per hour than you'd get if you were salaried.
posted by 168 at 9:45 AM on March 7, 2013
This is partially why more experienced people can charge higher hourly rates - they're more efficient with their time and don't have to spend as much time learning the basics on the job. (Instead, they get to spend their time learning more complicated stuff on the job! The learning on the job bit never really ends. This is a good thing.)
Contracts are good. Contracts let you do stuff like put in extra cost to them if they pay you late (or more politically, a high rate plus a bonus to them if they pay you 'early').
Do keep in mind that your costs and taxes and risk are higher as an independent contractor than as a salaried employee, so you need to charge more per hour than you'd get if you were salaried.
posted by 168 at 9:45 AM on March 7, 2013
Nolo has a book and other resources on independent contract work, like this post here about written agreements.
I'm in a very different field but I am still grappling with the repercussions of taking contract work without any signed agreements. If I were you, I would only move forward without a signed agreement if money were absolutely immaterial to me (vs. gaining experience and references). In any case I think there are red flags about an organization that doesn't bother to get this done before you start work. If they are unscrupulous you won't be able to count on them for much of a reference anyway.
posted by ziggly at 10:04 AM on March 7, 2013
I'm in a very different field but I am still grappling with the repercussions of taking contract work without any signed agreements. If I were you, I would only move forward without a signed agreement if money were absolutely immaterial to me (vs. gaining experience and references). In any case I think there are red flags about an organization that doesn't bother to get this done before you start work. If they are unscrupulous you won't be able to count on them for much of a reference anyway.
posted by ziggly at 10:04 AM on March 7, 2013
It sounds to me like you're lucky to have this opportunity given your qualifications. I would focus on delivering high quality work and learning everything that you can. Others are giving you advice as though you are an independent contractor, but you are more like an independent contractor in training at this point and your actual market value is quite likely to be less than your current compensation, even if you are not 'technically' being paid for all of the hours that you are working.
If I were your manager and you wanted to formalize the hours that you were working, I would just say, "Ok, but your hours are only worth $25 an hour to the company, if we're going to really nail things down", or whatever it would be so that it worked out to the same value proposition.
Effectively you are demanding a raise. The way forward is to find your market value by seeking another client; then you can demonstrate that you are actually worth the rate you demand-or at least that someone else thinks so.
posted by Kwine at 11:14 AM on March 7, 2013
If I were your manager and you wanted to formalize the hours that you were working, I would just say, "Ok, but your hours are only worth $25 an hour to the company, if we're going to really nail things down", or whatever it would be so that it worked out to the same value proposition.
Effectively you are demanding a raise. The way forward is to find your market value by seeking another client; then you can demonstrate that you are actually worth the rate you demand-or at least that someone else thinks so.
posted by Kwine at 11:14 AM on March 7, 2013
A fair hourly rate is whatever people are willing to pay you. What your client turns around and sells your work for, or how much they pay other people to do similar work has nothing to do with you or your hourly rate. It is a simple matter of supply and demand, and nothing more.
You say it is your first contract in a month or so. That suggests you have more supply (time available) than there is demand. So lower your rate until you start feeling reliably over-booked. Then gradually raise your rates until demand slows down and you reach whatever amount of steady work load you're comfortable carrying. Whether that means 10 hours a week, 40 hours a week, or 80 hours a week is entirely up to you.
Whatever number that is -- when your supply of time available to do work balances nicely with the demands of the people who are willing to pay you to do it -- that is the number that is a fair hourly rate for your time.
posted by spilon at 12:45 PM on March 7, 2013
You say it is your first contract in a month or so. That suggests you have more supply (time available) than there is demand. So lower your rate until you start feeling reliably over-booked. Then gradually raise your rates until demand slows down and you reach whatever amount of steady work load you're comfortable carrying. Whether that means 10 hours a week, 40 hours a week, or 80 hours a week is entirely up to you.
Whatever number that is -- when your supply of time available to do work balances nicely with the demands of the people who are willing to pay you to do it -- that is the number that is a fair hourly rate for your time.
posted by spilon at 12:45 PM on March 7, 2013
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It sounds like you're getting very fairly compensated for the work if you're earning the same as the senior developer would have for the same work. Do you think you should earn more than the senior dev for the same amount of work just because it took you longer?
posted by missmagenta at 1:45 AM on March 7, 2013