I have the power...now what do I want?
April 12, 2006 8:25 AM Subscribe
What's the best way for me to structure going from being a full-time, on site employee to a half-time, offsite one?
Short version: I'm moving to New Zealand and various other places. I gave my notice to quit a few weeks ago, and my boss has approached me with the possibility of me working anywhere from full to part time remotely.
I don't really want to work more than 20-25 hours a week, as I want to have time to work on my own projects and pursue other interests. I've basically been told, "We can structure this however *you* want," whether that means signing on as an hourly consultant, as a part-time salaried employee (with benefits), as an hourly employee, etc., etc.--up to and including working full-time, salaried, benefited, remotely. They've offered to continue to pay for part of my health insurance costs (COBRA would be in the neighborhood of $350/mo), and to share the cost of a Windows laptop for business use.
What's the "best" way to structure this? No matter how I do this, I'm going to have to provide an accounting of my hours and work done, so consider that point irrelevant. I'm not very familiar with the tax implications of various statuses (aside from knowing that if I'm a consultant I'll have to pay those myself rather than having them withheld.)
What are your suggestions and recommendations? I'm in a great negotiating position here...what do I ask for?
Short version: I'm moving to New Zealand and various other places. I gave my notice to quit a few weeks ago, and my boss has approached me with the possibility of me working anywhere from full to part time remotely.
I don't really want to work more than 20-25 hours a week, as I want to have time to work on my own projects and pursue other interests. I've basically been told, "We can structure this however *you* want," whether that means signing on as an hourly consultant, as a part-time salaried employee (with benefits), as an hourly employee, etc., etc.--up to and including working full-time, salaried, benefited, remotely. They've offered to continue to pay for part of my health insurance costs (COBRA would be in the neighborhood of $350/mo), and to share the cost of a Windows laptop for business use.
What's the "best" way to structure this? No matter how I do this, I'm going to have to provide an accounting of my hours and work done, so consider that point irrelevant. I'm not very familiar with the tax implications of various statuses (aside from knowing that if I'm a consultant I'll have to pay those myself rather than having them withheld.)
What are your suggestions and recommendations? I'm in a great negotiating position here...what do I ask for?
I was in the same situation (gave notice to my employer that I was moving out of the state, who then offered me a telecommuting contract position).
It sounds like your employer is pretty flexible, which is a great position to be in. To protect everyone's interests, you need to draft up a contract that covers the details of your new working arrangement. I found a lot of sites that offer sample contracts on Google so if you do your research you'll be fine.
The most important thing to decide on is whether you want to be considered an employee (income reported on a 1099 form) or a contracted worker (income reported on a W-2 form) There are different pros/cons for each. For example, half the employee's taxes are paid by the employer, and you often have much better health insurance options. Employees also tend to have a more stable income, especially if they are salaried. A contractor gets paid a flat rate per hour and s/he must pay for self-employment taxes and overhead and other misc. expenses out of that. A contractor's annual taxes are much more complicated, but you have the option of taking deductions for many things you're already paying for anyway, like rent/mortgage, utilities, office supplies, vehicle expenses, some food/entertainment expenses, etc. If you are a contractor, however, it would be in your best interest to find another client or additional source of income, because come tax time the IRS *may* decide that you're really an employee anyway, and fine the bejeezus out of your employer (and maybe you?) for committing tax fraud. When I was self-employed, I had a great book by Paul and Sara Edwards called "Working from Home" which I highly recommend. They explain a lot of these issues.
Andrew is correct in that it'll be very important that you keep track of what you are doing. Work out a deal with your supervisor about how you will report your time. My supervisor wasn't interested in weekly reports, just that projects kept getting done and they could reach me via phone or email when they needed me.
From my personal experience, I think it's really important that you stay involved in the corporate culture as much as possible. It's easy for onsite workers to "forget" that teleworkers are there, and they can get neglected when dealing with equipment, social gatherings, even promotions. I had sensed the beginning of my company's eventual downfall before I left, but it came as a real surprise when I was laid off via the phone. If I had been more friendly with people there I would have had more warning.
Working from home was a great experience, but it's not for the undisciplined. If you can keep your performance up and stay committed, it's a great lifestyle. I, on the other hand, discovered that I needed the structure that going to an office every day created :-) Good luck!
posted by jennaba at 11:11 AM on April 12, 2006
It sounds like your employer is pretty flexible, which is a great position to be in. To protect everyone's interests, you need to draft up a contract that covers the details of your new working arrangement. I found a lot of sites that offer sample contracts on Google so if you do your research you'll be fine.
The most important thing to decide on is whether you want to be considered an employee (income reported on a 1099 form) or a contracted worker (income reported on a W-2 form) There are different pros/cons for each. For example, half the employee's taxes are paid by the employer, and you often have much better health insurance options. Employees also tend to have a more stable income, especially if they are salaried. A contractor gets paid a flat rate per hour and s/he must pay for self-employment taxes and overhead and other misc. expenses out of that. A contractor's annual taxes are much more complicated, but you have the option of taking deductions for many things you're already paying for anyway, like rent/mortgage, utilities, office supplies, vehicle expenses, some food/entertainment expenses, etc. If you are a contractor, however, it would be in your best interest to find another client or additional source of income, because come tax time the IRS *may* decide that you're really an employee anyway, and fine the bejeezus out of your employer (and maybe you?) for committing tax fraud. When I was self-employed, I had a great book by Paul and Sara Edwards called "Working from Home" which I highly recommend. They explain a lot of these issues.
Andrew is correct in that it'll be very important that you keep track of what you are doing. Work out a deal with your supervisor about how you will report your time. My supervisor wasn't interested in weekly reports, just that projects kept getting done and they could reach me via phone or email when they needed me.
From my personal experience, I think it's really important that you stay involved in the corporate culture as much as possible. It's easy for onsite workers to "forget" that teleworkers are there, and they can get neglected when dealing with equipment, social gatherings, even promotions. I had sensed the beginning of my company's eventual downfall before I left, but it came as a real surprise when I was laid off via the phone. If I had been more friendly with people there I would have had more warning.
Working from home was a great experience, but it's not for the undisciplined. If you can keep your performance up and stay committed, it's a great lifestyle. I, on the other hand, discovered that I needed the structure that going to an office every day created :-) Good luck!
posted by jennaba at 11:11 AM on April 12, 2006
I'd second the advice regarding formal documentation of what you're accomplishing. A daily, one-line summary is mandatory.
Further, you should schedule a few times a year to come into the office and meet with people face-to-face.
Off hand, things to consider are insurance, taxes, and cost of living.
* Unless you're living somewhere with socialized medicine I'd think that them covering your health care would be a win.
* In the (U.S) state of Nevada there are no state income taxes; I know people who've covered their home mortgage on the savings from moving to Las Vegas.
* If you can get a decent salary but live somewhere inexpensive that's got to be a win.
posted by deanj at 4:39 PM on April 12, 2006
Further, you should schedule a few times a year to come into the office and meet with people face-to-face.
Off hand, things to consider are insurance, taxes, and cost of living.
* Unless you're living somewhere with socialized medicine I'd think that them covering your health care would be a win.
* In the (U.S) state of Nevada there are no state income taxes; I know people who've covered their home mortgage on the savings from moving to Las Vegas.
* If you can get a decent salary but live somewhere inexpensive that's got to be a win.
posted by deanj at 4:39 PM on April 12, 2006
This thread is closed to new comments.
also - and this may not matter so much now with voip - who is going to pay for phone calls? when there are misunderstandings a phone call is much much better than email. and, for that matter, who is paying for internet access?
as far as your legal status - that is going to depend on where you are. i looked at working for companies in the uk while in chile and you need to be careful or you can end up paying tax in both countries. this may also interact/conflict with your visa requirements.
posted by andrew cooke at 8:51 AM on April 12, 2006