So, my employment situation is a little complex right now. I'm working as a contractor at a small subsidiary of a much larger company. The parent company does all of its contracting through Contract Agency A, but Contract Agency A sometimes does contracts through sub-contractors: in my case, Contract Agency B. And, for tax reasons, I am actually sub-contracted to Agency B through my own company. So, the chain looks like this:
Company Where I Work » Parent « Agency A « Agency B « My Company « me *
I fill out a time card with Agency A, who bills my employer and then pays Agency B who pays my company, who then pays me as my accountant dictates. Very exiting.
So, as part of my trying to convert from contract to full-time, I have to go through a standard background check - they check past employment, references, residences, credit scores, etc.. And for current employment on the background check form, I listed "Agency B", since they're the people who got me the job and they're the company everyone in the chain considers my actual employer. We just worked out this sub-contract thing to boost my hourly take-home pay, since I already had (note past tense) benefits through my wife and could handle the taxes on my own.
The company doing the background check is having trouble verifying this, though. See, I'm not actually an employee of Agency B, so I don't show up in their employment records. In their eyes, I'm actually an employee of my own company. But, the background check agency doesn't want to hear that I employ myself; they want something a little more concrete.
But wait, I asked the background check people, why do you need me to prove that I work for any of these agencies? Shouldn't the fact that I've been sitting in this cubicle, at this company, for 12 months prove to this same company that I'm employed here (regardless of how the billing and sub-contracting flows) ? What are you trying to prove? Shouldn't the fact that, aside from the accounting, I already work here, be enough to prove that I am currently in this position? Shouldn't the fact that the Company and the Parent both agree that I work here be proof enough? No, it is not.
So, I've been on the phone with Agency B, trying to get them to email me the 1099 to prove that I'm sub'd through them so I can prove to the background check people that I'm doing the job that everybody already knows I'm doing.
* - Finally, a legitimate use for "raquo" » and "laquo" « !
I had a similar setup with Nokia. Nokia outsource all their contracting to a separate company, and my contract was with an employment agency who can’t deal directly with Nokia, they have to go through this other agency. I also set up my own limited company with myself and my wife as shareholders. So my situation was:
Nokia <- Agency A <- Agency B <- My Company <- Me
I would invoice Agency B, who would invoice Agency A, who would invoice Nokia and I'd get paid. As both agencies were taking a cut I'd estimate the bill that Nokia received was probably a good 20% more than I'd invoiced. Kerching! My actual written contract was with Agency A, so I guess I wasn't technically employed by Nokia. There is a corporate tax dodge going on here I'm sure of it.
Sounds like someone is making some cash out of your situation too.
However, the company checking my employment history (see other post) was at least astute enough to contact Nokia directly to verify I worked there – as far as I know neither agency was involved.
So now I am winding up my limited company, which is costing me £400 in accountancy fees. The process can take months and I can't touch the money I had leftover until I get my final tax bill – but I had to close my business account as part of the wind-up process and transfer the money my personal bank account (you can't keep this money in any account that pays interest until that final, dreaded tax bill.) It's a lot more hassle closing a company than creating one. :)
When I was in California last month I realised that contracting in the US is quite different to the UK (my brother-in-law has contractors working for him.) As far as I could tell, US contractors aren't paid a great deal and use the contract to get a foot in the door and to earn a permanent role. In the UK, IT contractors tend to be highly paid and switch contracts every 6 or 12 months, only taking a permanent role if they have a really, really good offer or the market looks like it might slump and finding work could be tricky. The pay reflects that you have no benefits and fewer employment rights. No pension, no healthcare, no sick pay, no holiday pay, no life insurance and can be 'let go' with little or no warning. I even had a different coloured door card and a 'special' email address, just to hammer home that I WAS A FILTHY CONTRACTOR.
Sounds like someone is making some cash out of your situation too.
i assume so and that’s fine: my hourly rate is nothing to complain about.
So now I am winding up my limited company
i’m thinking about doing that. aside from the contracting thing, my company’s income in almost zero, these days. once the contract income stops, its lifetime will be measured by how long it takes me to pick the rest of the cash out of its account. shouldn’t take long…
As far as I could tell, US contractors aren’t paid a great deal and use the contract to get a foot in the door and to earn a permanent role.
could be the area. all of my contracts have paid rates comparable to what i’ve made at permanent positions. benefits are usually a bit leaner, but that’s rarely an issue since i usually decline them anyway – we would just use my wife’s insurance. the insecurity is an issue, but frankly there’s so little security at ‘permanent’ jobs these days, it’s just a matter of perception.
No pension, no healthcare,
is that like, supplemental, healthcare? i thought you guys had the horrible commie govt-sponsored health care ?
I even had a different coloured door card and a ‘special’ email address, just to hammer home that I WAS A FILTHY CONTRACTOR.
yep. i have the special key card, too. and i don’t get the cheap lunch at the company cafeterias, and can’t use the gym or the clinic, etc..
A lot of UK companies offer private health coverage which is mainly used for minor procedures that the NHS would make you wait for. I’ve used this cover once, 10 years ago, when I was getting a numb hand every so often (it was a nerve in my elbow and switching to an office chair without arm rests fixed it.) The NHS would of made me wait months to get it looked at, whereas the joy of expensive private cover meant I saw a consultant within a week. I have my wife and kids covered so it’s a peace of mind thing, and I wouldn’t bother if it was just me. It’s a benefit so I pay tax on it obviously. On the one hand it means people with cover don’t clog up the NHS with their tennis elbows, whereas on the other hand the consultants you see are probably working for the NHS and are doing a bit of extra highly-paid work on the side, thus depriving a more deserving NHS client of their very expensive time!
So, yeh, minor-operation queue-jumping for the middle-classes. I’ve been thinking about getting the snip but I bet that isn’t covered. ha ha.
Fucked up. But on the bright side, didja know, if you install United States – International keyboard layout, no need to type » and « — «»«»«»«»«»«»«»«»«»«»«»«» is as easy as alt+[ alt+]
Wouldn’t YOUR company be your current employer?
I’m going to get coffee after which I will no doubt realize this is a stupid question.
technically, yes. but that isn’t good enough for them.