Are companies becoming afraid of using consultants? A Texas buddy of mine in the same business commented this very morning...
"All of those who have worked with me (me included) seem to be in exactly the same position! Absolutely no work. Even the recruiting companies have stopped calling and visiting! What's the problem with the industry? Even the level of frivolous inquiries is way down!"
The "frivolous" part cracked me up... I did receive such an inquiry in the past two weeks... fishing for a solution with no intent of paying. ...Jim Thompson
| James E.Thompson | mens |
| Analog Innovations | et |
Yup. I get these requests over and over again. Then if nobody can be found they often don't want to do it on a consulting base. "It's not customary" or whatever. Many projects have come to grief because of this (strange) perception. Smaller companies usually have no problems like that and things get accomplished.
In addition, San Diego as a location would require a very high salary for a locally employed top-notch analog engineer because the cost of living can be outrageous.
If they insist of an employee my advice to them would be to settle for a junior level EE if that's the only one they can find and pair him or her up with a remote consultant as a go-to person for the nasty stuff. About half my consulting relationships are like that and it works well.
The Federales have made many afraid of 1099-relationships. The keyword is "reclassification as employee", to squeeze out more tax Dollars. That is very damaging to the technological leadership position of our country but I do not expect politicians to understand such things.
A Texas buddy of
Can't confirm that for my field of board-level analog design. There is an accelerating trend of companies moving out of the country though and the ones with enough business sense amongst us know why. As for me, I am more concerned about what'll happen when the last hardcore analog guys throttle down. Recently I discovered the fun plus health benefit that mountain biking provides and that might move my throttling-down phase to a time a little earlier.
I never worry about that. Sometimes potential clients don't engage after the initial consultation and rather run with an idea I let out. You've got to let out some ideas. Eventually most of them will hit an "Oh s..t!" moment in the project and then they'll come back.
That's kind of my attitude. People can have a hard time believing I can help unless I actually do. So I'll go ahead and help out with some small part of the solution, then when they want more I'll say "oops -- this is all going into the marketing budget, I really need to get under contract now".
I figure at that point I'm like the little old ladies you find in supermarkets with plastic bags on their heads, handing out little bits of yummy on a stick, and pointing to the right spot in the freezer case.
It may be their only option unless they can pry someone out of another company (which can turn into a painfully expensive endeavor). Importing is another option but not really because the whole H1B visa contingent for the whole year gets snapped up within days after release.
In the aircraft industry that is quite normal. Suppliers and aircraft manufacturers work together very closely. This includes consultants like me. In the beginning I was a bit surprised how open they are to each other and that I almost immediately got to know who the end customer is. Kind of nice because then you can almost picture the actual aircraft with the newly designed product in there, you know where it's going.
Consultants pay their own way when it comes to social security, health care, disability and such. That's why their hourly rates are higher.
It's the old supply and demand. If there is demand and a limited supply of talent one can request fair payment and get fair payment. If there is an over-supply of labor then people have to either accept lower pay or train themselves towards something more desirable.
It is unfair to then place the burden on the payor. Just like it would be unfair to make a bank liable if an accountholder is dishonest about declaring interest income.
Regards, Joerg (likes being a consultant, always did)
it is still the taxpayer that is liable, but if the employers attempt save money by getting around labor laws means the tax man has to run around trying to collect taxes from a bunch of people that already spent it I can understand why they don't like the construction
there's nothing wrong with being a consultant and it makes sense for many things, but I can understand why there are rules in place
And I'm sure you bill an hourly pay substantially higher than if you were an employee, and you don't "consult" for the same place 9-5 every day
Sure, as it should be. The one who owes the taxes is liable. The one who owe the taxes is the person who receives the money.
but if the employers attempt
How does this get "around labor laws"? What labor laws?
The same is true if grandma Miller doesn't pay taxes for the interest on her deposits. What if the taxman cometh and she has already spent it all on a Cruise to Hawaii and her grandchildren?
Rules yes. Discrimination no.
Correct. As it should be. But even if someone were to consult for the same place for a longer time that does not entitle anyone to deny a consultant's status. Just like a doctor might do his surgeries in the same hospital for a long time but he is still a freelance doctor, not an employee. The only hospital chain I know where doctors are staff employees is from my health insurance plan, Kaiser Permanente (they run their own clinics).
uh, back when... the IRS both state and federal started looking into a lot of companies' "consultants" in california. Since they matched the rules, that the methods of carrying out the tasks were defined by the employer, they HAD to be at their office using the company supplied materials [in other words, hours defined], AND these consultants had NO OTHE CLIENTS! that they weren't consultants, they were surrogate employees. And WHAM! fines and back payroll taxes and on and on. As a result, for about 2-3 years nobody would hire a consultant!
Solution, have more than one client, get a Federal EIN, create a complete lab to do your own work when you want to work and that took the edge off the scrutiny.
But problem is still that having 'consultants' breeds unrest in the crew. jealousy at their free-er life style, and most of ll selling their time retail instead of wholesale.
Regarding paying taxes! Do your OWN withholding, put it into an account gain interest and pay. No problem with a tiny bit of responsibility. The problem I've seen was that too many 'consultants' still sold their time wholesale [less than the burdened fair market value], were lifing hand to mouth, so had no money left for taxes.