[ale] - [semi-OT] contract vs. permanent work

[Fulton Green]

In a nutshell, contract work has a higher rate of pay (and allows for
overtime compensation), but a lower degree of security. Some agencies will
let you choose your mode of employment ("fulltime", W-2 contract or 1099
contract).

If you choose fulltime, you're usually allowed the same benefits typical to
equivalent non-contract positions. With W-2 contract and 1099, though, your
hourly rate is higher, but you lose out on vacation and/or sick pay, and you
pay through the nose for their health plan (if the agency lets you in on
their plan at all). 401(k) availability varies greatly; simply ask the
agency what they'll allow you to do.

If it matters, fulltime agency employment usually offers a month or more of
"bench pay" when you're between projects. Both that and the W-2 contract
options should also automatically pay your unemployment insurance taxes for
when your project ends and there's no replacement work.

The 1099 option is advantageous if you're already incorporated, but some
agencies don't offer that option. With this option, however, you're
responsible for taking your taxes out of your paycheck (including those
that your employer would typically pay for you outside of the paycheck).

The thing to do is to weigh how secure you are financially and juxtapose
that against the available options your agency gives you.

On Mon, Oct 28, 2002 at 10:45:12AM -0500, Jason Vinson wrote:
> This morning I received an email about possible contract work, and I
> wanted to see what you folks thought about the pros and cons of contract
> work versus permanent.  Most people I have talked to seems to think it's
> all dependent upon the benefits/retirement plans.

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