Laid off by Big Tech, then recruited for contract work – at the same place
seattletimes.com
seattletimes.com
Firing people to hire contractors instead is risky because you need a reason to fire people. The reason could be economical, but one could easily argue in court that if the company is hiring contractors instead, well, it was not the real reason.
The other reason could be personal. The employee is incompetent or toxic, for example, but if you get an offer as a contractor after, it sounds trivial to win a trial too.
I know the word is a bit a taboo, but I’m personally in a union, for scientists and engineers, and I would recommend people in USA to start considering thinking about perhaps potentially slowly improving their rights.
You can always fire people without cause, but you would owe them termination and severance pay which positively correlates with (among other things) duration of employment and specialization.
Also in the UK contractors are paid a lot more than full time staff!
low level staff maybe
the big earners in UK finance are employees
contractors don't get a bonus
I think 'contractors are paid more' generally (and in fairness somewhat necessarily) ignores that it's to compensate for other employee benefits. But it's ultimately a kind of pointness/trivial truth - 'the value of holiday and sick leave and job security and life assurance and pension contributions and [...] is non-zero!' - yes, of course it would be.
Contractors do get paid more but they don’t earn more at least not anymore after IR35 since they have a tax rate that is over 50% as they are also liable for the 15.5% employer national insurance contributions now.
Overall contractors are far cheaper in the UK even at day rates of over £1000 and replacing people that earn high 5 to low six figures.
They aren’t paid any bonus, there is no pension contribution there are no benefits and there is no liability for redundancy.
I have seen mid level jobs where the contractor is paid twice what the full time staff are, no bonus on either side.
Your point about long term incentives is very dependent on company. I wish I had a scheme like that!
Stock options are usually available at most large traded companies, bonus top ups are usually for directors+ or senior managers in FAANG or other large US companies that tend to have more grades than UK ones.
Then there are ofc various retention bonuses and allowances, but these tend to be pretty much just a pay increase without the social contributions liabilities to the employer.
The risk falls completely on the company these days. IR35 is a very nasty piece of legislation it’s difficult to even hire remote contractors outside of the UK with it without going through an established firm.
If HMRC catches you in violation of IR35 they can open the book and inspect any contracts over the past 10 years and retroactively penalize you. And by you I mean the “employer” in this case as in the company that hired you under contract.
No one is taking the risk today.
And in your scenario, wouldn't voluntary redundancy get really weird? 'Denied - because you're qualified for a job in a different department. So keep doing your current one or resign.'
Basically anything that hurts the top 0.1% is presented as bad for the economy. Which probably has a lot to do with how the economy is measured.
Its a real problem!
It's telling that America just gets richer and more powerful and Europe stagnates more and more.
Reap what you sow europoors. America shows you the power of the Protestant work ethic.
From the introduction:
> For many years, a key distinguishing feature of the Portuguese labour market has been its persistently high employment and relatively low unemployment, despite the high level of employment protection ... The crisis has now seemingly brought about an end to this striking feature of the Portuguese labour market: ... As a result, Portugal now [in 2017] has the third highest unemployment rate among OECD countries; ...
And the findings:
> The results show that the sharp outward shift in the Portuguese Beveridge curve was to a large extent driven by cyclical factors. However, it was compounded by some structural factors, namely, the relatively high level of employment protection together with the relatively high minimum wage ratio and the relatively generous unemployment benefit system.
I'm under the impression that even before the financial crisis, Portugal was considered one of the "poorer" European economies, which is what I was getting at. But I see now the comment I was responding to may have been concerned with Portugal's _recovery_ since 2008.
Specifically, the IRS can come after you for incorrectly/falsely classifying an employee as a contractor.
Not as much protection as west Europeans, maybe! But the other side of the coin is that it’s so much easier to get hired, or start a business in the US. https://www.dol.gov/agencies/whd/workers
And that's before we get into intentional understaffing and industry capture of the US Department of Labor.
https://www.vice.com/en/article/xgdejj/amazon-repeatedly-vio...
As an hourly, non-exempt employee, I had a legal right to overtime, paid breaks, and unpaid leave and other things. DOL signs were posted at the workplace, as is required, to inform workers about their rights. My employer (Best Buy) followed the law and I appreciated those legal protections, which the employer otherwise probably wouldn’t have given me. This is an anecdote, but is an example of a worker (me) having rights.
To be clear, that’s the specific argument I’m making. American workers have some rights, regardless of whether they’re perfect, or perfectly upheld. That’s obvious, isn’t it?
This however does not mean that unions are powerless.
I highly recommend Adam Conover’s interview with Jane McAlevey
Unions are the only protection but companies do everything to burst unions e.g Starbucks and Amazon.
It varies a lot, and can be confusing.
There’s an ongoing case about how venues like Madison Square Garden are using facial recognition to deny entry to employees of law firms suing them.
There are laws in place to protect theater critics. Those laws stem from an idea that it’s unlawful to prevent someone from earning a living/practicing their profession.
Many of those older laws are on the books.
There are strict anti blacklisting laws in many states.
This actually happened a lot after the ACA/Obamacare law went in effect a decade ago. Many employers were faced with the mandate to provide insurance for full-time employees and decided to fire/downsize those roles and hire independent contractors in their place (which did not need to have healthcare provided by the employer).
IMHO, if a company lays off an employee, and then wants them back as a contractor/consultant, the tasteful offer is that the money doubles, not halves.
because they can
the game has changed
They might take their final crumbles before it all goes to 0
Granted, "extinction level event" is a bit of a stretch (at least on a collective basis, though individually it can be a very different story), but perhaps we could manifest a French Revolution type of thing with some coordination.
See also “Nobody wants to work”
2. Why would they double this person’s pay? This person no longer has a job and needs one!
I'd see this more at a company like Twitter than Microsoft, but trying to refill a role, especially with the same people after once firing them is often a sign that they fucked up and let go people that were critically needed.
That's the kind of conditions where the person comes back as a contractor, but paid significantly more.
This also happens a lot in small companies with stupid managers.
Because he's contracting now. Contractors typically don't take jobs for salary level pay, let alone _less_ that salary level pay. The main reason we charge more is to cover costs for insurance, and all the other things a company would normally pay for — but it's also because we don't _need_ the job, _they_ need the job filled.
That's why hiring contractors is usually more expensive per hour than hiring full time staff.
Instead of naming your staffing company like a nondescript CIA front, why not call it "Dearth of Talent"?
No one would ever forget it.
Maybe it can be a cold-call icebreaker, too.
I’m not saying that.
Contract work virtually always pays much more than full-time on an hourly basis, since now you've got to cover your own health care, social security, and so forth. And then on top of that you're charging more because there's no security.
The whole exchange you make for full-time employment is to be paid less than short-term contracts, in exchange for greater stability.
There's what you're talking about, W-2 contractors who work through a staffing agency which provides temporary work for lower-skill positions. They are often paid less than full-time but this is usually because they have less skill/experience. An equivalent full-time job often doesn't even exist at the company.
And then there are independent contractors (aka consultants) who legally function as their own company, and who do higher-skill contract work. They are paid much more than full-time.
I quit my $60k CTO job and they paid me $140k to stick around as a contractor. Most
$300k is CEO of a large company salary in Sweden. The prime minister earns around $200k.
if benefits like insurance are unrelated to your job, and there are strong unemployment benefits, contracting would be 1000 times better.
If you're a contractor for now, fine. You still get to maintain and build new connections to try to get back into an FTE role later on, hopefully at the end of the day this being a minor speedbump in your career.
I can appreciate the thinking. I might actually choose that path if it happens to me.
But if you were laid off, it means the company didn't value you a lot. OK, maybe they didn't value you much because of their current needs--which may have changed since you were hired. But making a bet on staying in the company's orbit just in case they have a change of heart doesn't seem like an especially wise one in general even if it was a "no hard feelings, it's just business" breakup.
There are boomerangs where someone went to a startup for a few years and that sort of makes sense but that's different from being laid off.
when they phased out the pension plan you could still qualify if your original start date was before some arbitrary date, so there was some confusing stuff where new people were not eligible but some people were still getting into it.
Some folks I know are citizens and still trying to stay in the company orbit.
My company offers RSU's as a standard part of performance based comp after a certain level - and having talked to recruiters that is the thing which makes it hard to compete with. Huge tech companies just have higher TC than lesser tech companies as a result. I gather this is generally the case at FAANG companies.
This gives your earning power per time a raise, and lets you take on multiple contract roles if you desire.
Don’t forget to live life with more time.
Boeing phased out their pension eligibility back in the mid 00’s as I recall.
I have a pension. It's guaranteed because it's a state government job and state governments in the USA are constitutionally forbidden from abrogating contracts (the Contract Clause, yeah, sure, there are exceptions, but this is unlikely to be one of them).
To fund it they spend 23% of my salary (some taken out of my salary, some additionally funded by them).
However if government pensions did go belly up you’d see the use of QE, which will cause inflation, at which point they are still giving you the promised thousands a month but they aren’t enough to live on, and fuck everyone else over at the same time.
From what I see - it's some recruiting agencies trying to cast wide nets to hire people for contracting jobs. By some random chance, fired people are getting offers for companies where they were worked previously.
It'd be different if people were targeted to offer job in the exact same team where they were laid off from, but I haven't seen this in article.
Personal anecdote: I was getting emails from Amazon recruiters while working at amazon.
.. it's almost as if auctioning off our collective talent to the highest bidder to build their machines of dominance and then getting kicked out of that bubble back into the world that now isn't allowed to hold their own opinions was a bad idea after all ..
The one surprise from the article is that the gross pay is the same. Typically, contractor is more but you lose benefits like paid days off so it's a wash. But same? Maybe that's because supply is up and demand down?
When the role is "a body for the shop when the workload is high enough", the contractor is the least valued class in the team, paid less with less benefits, and first to cut when load or funding drops.
The part about first-to-cut is true though. Because it's the easiest for the employer.
I think I know them, they are /producing/ low-quality /results/, but I woulnd't go THAT far.
I've also seen layoffs where only full time employees get hit, while the contractors, just don't get hit. Just this month, I've just seen a 20% cut in FTEs , followed by the remaining employees having to spend a lot of time interviewing contractors to replace them. And the contractors are not going to be on-call, so support rotations shrink.
So yes, there are places where the long term contractor is the least desirable position available, but it's really hard to generalize.
I was a contractor once and while I sat at a tiny desk in a hallway and wasn’t invited to the ice cream parties I know I was paid better than all the FTE as they tried recruiting me but their offers were far less that my hourly rate.
Working through your own company is a much better arrangement, but harder to get setup. You'll have more control over rates and have the opportunity to get more work.
This all depends on having a relationship with someone with some kind of budgetary control and relationship with procurement. If procurement can get a better deal working directly with your company then it's normally possible to work something out. This is a good reason to build relationships with the "highly political" people that technical-types normally eschew.
We've got people who own, or are, established independent businesses whose customers are other businesses. In white collar work these roles are generally called "consultants". In blue collar work they are often "contractors" or "sub-contractors".
We've got temp agencies who provide temporary or permatemp employees to other companies, where the temporary employee may or may not have any guarantee of long-term employment by the temp agency, but are almost guaranteed to have stretches of time in which they aren't compensated, even if they do. These roles are "temps" or "permatemps", but often get called "contractors", though the real "contractor" is the temp agency. The jobs described in the article fall in this bin.
We've got people who directly fill roles for spec pay. I guess these days these roles are called "gig work".
I think the word "contractor" should be reserved for talking about non-employee labor, or business-to-business labor, in general. Even then there are edge cases (like catering) that I'm not sure belong here, or belong in the non-contract business-to-customer category. The more specific terms should be used for the particular type of job (Consultant/Sub-contractor, temp/permatemp, gig worker).
Though I guess if you work in the US there’s not much difference in the first place because firing even permanent employees seems really easy.
What opportunities were you referring to? Becoming an Uber driver?
https://thenewstack.io/we-interviewed-a-coder-someone-else-s...
> Lawrence Dearth, the president of staffing company Insight Global, said the average recruiter is simply hoping to make contact with a talented individual. After the initial contact, they’ll ship the worker’s resume out to 10 to 15 different companies.
That narrative died months ago.
At this point the odds of a recession are much higher than a 'soft-landing'.
Furlough
I guarantee that the consulting firm is getting a lot more for your time, than they are paying you.
This is becoming a lot more common, these days.
In many cases, doing this, is a good way to enter as an FTE, because the employer does a "try before you buy." I have a couple of friends that landed great FTE jobs, this way.
However, that is only if you are going to a new company, that doesn't know you.
There's no law that says they are entitled to benefits. I think that 1099s can apply to "always-there" employees (like Uber drivers).
I've heard stories about these contractor shops.
When they are stumping for the position, they bring in a few IIT/MIT/Oxford folks, then, once the ink is dry, they send over the low-achievers, and I suspect the law states that the company can't request specific folks, or that would make them "possible employees." They need to deal with whomever the contract shop sends over.
That said, my advice would be to weigh whether or not the portfolio boost is worth dealing with any toxicity you may or may not experience. I suppose it's possible (not trying to assume, just that I don't know) that s/he doesn't know how toxic you felt the place was.
Many such staffing agencies firms, esp with those fewer than 100 staff, are known to be 'benami companies' and pay handsome kickbacks to the client's mgmt based on headcount hired (and hence the revenue generated) through them. Often these are routed through hawala method, and final payments made in foreign (or their respective native) countries , so would be hard to track