Slightly Off KIlter

My spouse, Rich, has been a freelance computer programmer, consultant, and small-scale entrepreneur since 1975; that is, for nearly all of his professional life. I, on the other hand, when offered a 6-month “trial” contract for my first job out of grad school (in late 1984), pushed back hard for full time employee (FTE) status from the outset. I wanted the stability of a regular paycheck. I wanted the health and vacation benefits. I wanted a real job.

When we bought our house in 1988, it was my FTE status that made getting the loan very easy. On the other hand, it was Rich’s previous contracts that supplied the down payment.

By 1995 I was weary of being a “full time employee”. I was tired of re-orgs, bad management, poorly designed projects, and company politics. I wanted to try contracting, but by that time Rich was in the middle of an entrepreneurial period, trying his hand at being a small publisher. The household wasn’t making a lot of money and we needed the stability and reliability of my constant (if not much fun) fulltime paycheck. So, I switched jobs and tried again, and again, and again, seeking happiness in full time “permanent” employment.

By mid-2000 I was fed up. Rich had mostly let go of the publishing business and had a contract programming gig again. The market was good; the time seemed right. I found myself a contract in San Francisco and bid goodbye to my years as an FTE. I enjoyed the first 3 months (which was extended to 6 months). When asked if I would convert to FTE, I said no, and was actually sorry to see the contract end (it couldn’t be renewed twice). I found a couple of small, remote-work programming projects, then hooked up with a “long term” contract (the pay wasn’t as high as I would have liked, but it was 100% from my home office and I was onl;y required to work 3 days a week; more if I wanted). Things seemed to be going well.

Then the dot bomb went off.

My “long term” contract dropped to 15 hours per week, then to “we have to let you go”. I managed to get one more 10-week contract in summer 2002. [Hint: Never accept a job simply because you need one and you think “Oh, I could do that”. Every day, I wished I could quit, but of course, couldn’t allow myself to do so. The day the manager said, out of the blue, “This project isn’t moving fast enough; we’re going to terminate the contract” I wanted to jump up out of my chair and shake his hand… but I didn’t :)]

I’ve been unemployed since mid-September, 2002; luckily for me, I qualified for unemployment insurance.
I’ve been looking for work for over a year now.

My ideal job would be as an independent programmer, self-employed, working fulltime from my home office for several clients. That’s the ideal. It’s not quite unattainable, but it’s pretty hard to get in today’s job market.

Instead, I’m more likely to have a choice between a “W2 contract” and “Full time employment”. In either case, I will be expected to be onsite 5 (or, if I’m very lucky, 4) days per week, working for a manager on a project of the manager choosing. In either case, I’ll commute to the site, sit in a cubicle, do the work, and get a paycheck.

So, I’ve been rethinking whether it matters to me to be a contractor or FTE next time around. Three years ago, it mattered a lot. I did not want to be a “fulltime permanent” employee of any company. Now, three years later, I’m not so sure. Of the contracts I had, when I was onsite everyone treated me like an employee (with both the good and the bad aspects thereof). I sat in a cubicle. I went to meetings. I was expected to be onsite.

Certainly, there are differences between being a contractor and a “fulltime employee”, the concept of “benefits” being the primary thing I can think of. Medical benefits are more likely for FTE (until you change jobs, of course, or get “laid off”). 401Ks, commuter rebates, vacation time and paid sick days are for FTE only; FTEs get 1/2 of their Social Security taxes paid by the company.(I can understand why the State of California doesn’t perceive much distinction between contractors and employees… other than benefits and taxes there are so few distinctions made; how difficult can it be to view those few distinctions as a way to cheat the State? or the “employee”?)

Another big difference is the duration of the job. Contracts are expected to be shorter in duration than FTE (although some contracts run for a year or two, many run 3 to 6 months). Especially if the pay is low or the job not very interesting, it may be “better” (i.e. easier and more flexible in the long run) to accept a contract with less-than-desirable characteristics than to accept FTE with similar faults. It’s not “the done thing” to leave an FTE job in less than a year. But what if the pay is equitable and the job is interesting?

In terms of the job, in many ways the only noticeable differences I have seen between contract vs. FTE were who signed my paychecks, and the way I treated the job. The way the management and co-workers treated me was identical.

Then I realized that I had been treating the job the same way for several years.

When I work, as a programmer or a writer, the people I write code or documentation for are my clients. They need me; I work for them. I make recommendations (consulting); my clients (managers, co-workers, people in other groups) make decisions based upon my recommendations. My job is to do the best work I can, make the best recommendations I can, support the project as well as I can. My clients’ job is to use (or reject) my work, accept (or ignore) my recommendations, support (or cancel) the project.

It doesn’t matter who signs my paycheck. It doesn’t really matter whether I get “company benefits” or pay for my own health insurance. (OK, it matters monetarily but not regarding how I feel about the job). Whether I am “allowed” to work from home has been pretty much unrelated to my status (FTE vs contractor) — neither seems very interested in letting me work from home most of the time. My relationship to my co-workers is basically the same. The more I think about it, the more I realize that Contract vs FTE doesn’t really differ in many ways that matter most to me.

I’ll still keep my eye on the ideal – I really want to be independent, working from home for multiple clients. I want to work on projects of my own. I don’t want to feel “owned” by a company. But in the real world, I need an income, and that income is most likely to come from either a W2 contract or FTE. In that case, I’ll keep my options open and consider either choice as equal. If the work looks interesting, and the pay scale is similar, the payment method and “benefits” don’t really matter.

Three years ago, I needed to be a contractor; three years later, the distinction between W2 contractor and fulltime employee has begun to blur.
What matters most to me is my relationship to the job.