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Re: Transition from employee to consultant--any gotchas?

Subject: Re: Transition from employee to consultant--any gotchas?
From: Dick Margulis <margulisd -at- comcast -dot- net>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Wed, 25 Aug 2004 14:25:32 -0400




TechComm Dood wrote:



Get the duties, responsibilities, and the "understanding" of job
hunting in writing.

Yep. It's all in the draft agreement.
Severence does not prevent you from getting unemployment. Apply for
unemployment ASAP. Take it from me... I was laid off three times
within two years' time... You can certainly collect severence and
unemployment at the same time. However, if you are working for this
company, officially, as a contractor, as of today, well, then you
can't collect unemployment. ;-)

I'd rather be employed than collect unemployment. Apparently, though, the severance pushes back the start date (or extends the end date, depending how you look at it), of unemployment benefits. No biggie. Whatever it is it is.


2. They're selling me, for a dollar, the old equipment and software
licenses that were on loan to me at home so that I could telecommute.
That way I'll own my production tools, helping me satisfy the IRS
requirements for independent contractors. (The depreciated value is
zero, so they make a profit at a dollar.)


Sweet!

Yeah, got confirmation today that that part of the deal is a go.


5. They will pay me a fixed retainer, billed in advance, for up to a
certain number of hours of work per month and a (higher) hourly rate for
any additional hours needed to complete projects. Numbers are TBD, as we
haven't started negotiating yet.


That's a good approach.

Thanks. One wrinkle was that CFO/beancounter types don't like the word "retainer" (makes them think they're paying for services they aren't going to get). So my ex-boxx and I did a little rewording without changing the concept, prior to forwarding the draft to the CFO.

7. I'm retaining copyright of all works produced until the corresponding
invoice is paid in full, and I'm retaining a perpetual license to use
non-confidential works in my professional portfolio.


Definitely get their OK on the portfolio inclusions in writing.

Yeah, that's in the agreement, too.

I
don't think the copyright thing will fly though. If they don't pay,
don't hand it over to them. But, if you hand it over to them and never
see payment, the copyright thing won't fly, I'll wager.

As someone else pointed out, all I did was restate the principle of work-for-hire. Nothing radical or original there at all. Whether I can enforce it or not is another matter. This company, unless things turn around rapidly and radically, is not going to have anything left to sue for. Mostly I just have the paragraph in there to apply a little pressure when it's time to collect payment.



All the IRS cares about are your correctly-completed tax forms. Think
of severence as a taxable gift; getting severence doesn't mean you can
do other things.


One accountant told me that you can't get a w-2 and a 1099 from the same company in the same year. That accountant, even if he is wrong, still works for the company that laid me off. So that might be a fly in the ointment. I have an appointment with my own accountant tomorrow, though, and will ask him to look into that.


I know you guys aren't lawyers (at least most of you aren't), and at
some point I'll probably have to involve one. But if you have any
suggestions for improving this plan before I present it to a lawyer, I'd
like to hear them.


I've never had to use a lawyer.


I'm starting with the accountant. If he tells me to involve a lawyer, I'll do so. The big issue is having i's dotted and t's crossed so that I stand some chance of collecting payment.


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References:
Transition from employee to consultant--any gotchas?: From: Dick Margulis
Re: Transition from employee to consultant--any gotchas?: From: TechComm Dood

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