🚀 go-pugleaf

In article <1.sde-h2s*d@gate.net>,
Stefan Jon Silverman  <sjs@sjsinc.com> wrote:
>rmac@well.sf.ca.us (Robert J. McIlree) writes:
> 
>> Stefan Jon Silverman  <sjs@sjsinc.com> wrote:
> 
>        I have in the past modified the NACCB template on the limiting of
>non-compete clauses to the smallest definable entity within a client
>organization (i.e., the project or department level), on intellectual
>property issues when I bring my own tools / code into a client organization,
>and on contracting independently with groups I come into contact with during
>my tenure at the client's site. I have found most NACCB brokers will not
>change the language on payment terms; they state quite catagorically that
>their attorney's will not let them modify this clause because of repercussions
>with the IRS. In these cases, I either walk away or give them my SSN and
>tell them to deal with me as a W2-able employee.
> 

In such instances, I will always walk. You jeopordize your IC status if you 
take too many (how many I don't know) W2 gigs. My CPA informed me some years
back that even performing one W2 gig per year was enough to have the IRS
challenge your independent status.


>> 2. The 20 Common-law tests of employment are subjective, not objective. Not
>> qualifying under one of these tests doesn't automatically brand you as an
>> employee. Brokers who tell you otherwise are BS'ing you.
>>
> 
>        I agree in principal with the above, and can prove that I am in
>compliance with the first 19 to the satisfaction of most brokers (or at
>least the few who seem to care -- not many do). The NACCB interpretation
>of the "assumption of financial risk" question, however, seems to be that
>just being in business is not "in and of itself" enough of a risk if you
>are a computer IC and may expose the member brokerage to some form of
>IRS investigation. In most other fields, IC's are not subjected to the
>duress of having to carry the prime-contractors liabilities until they
>are satisfied by the client. The prime- / sub- contractor relationship
>(i.e., broker / IC) is independent of the prime-contractors relationship
>with the client. For case law, just look at the building construction
>trades (the plumbers, carpenters, electricians, etc. get paid whether
>or not the homeowner pays the general contractor). My bugaboo here is
>that computer IC's are being judged by a different standard by the
>brokers because from the IRS's point of view, we all make far too much
>money, hide income, and commit tax fraud (I can tell you many stories
>of the audits I've endured over the years).
> 

So sayeth the NACCB, not the IRS. The NACCB contract is simply exploiting
the payment risk issue to have you act as a bank to the broker. The risk
of exposing the broker to an audit simply based on payment terms is 
miniscule.  They're taking you for a ride. I'd stop dealing with them
entirely if they're that inflexible.


NACCB brokers do not have a lock on assignments. I always hear about a hot
req from at least 2, and usually 3-4 different brokers. If I hear about the
req from a bogus broker or one who won't negotiate, I'm unavilable. Chances
are I'll hear about the same req from a shop I trust and have done business
with previously. Cha-chinnng! Submit my resume ASAP!


> This is also why I no longer understand the marketing cost
>component of the brokerage fee, am I paying for client lunches out of
>my earnings? I thought that that portion of the spread was supposed to
>be used for things like up-keep of the database system, client identification,
>pro-active marketing of consultants into client organizations, and
>keeping the consultants happy 


The broker's gross billing are not your "earnings." You are a 
subcontractor to the broker, and the end client is not your client. 
Why, then, is it any
of your business what the broker does with his cut of the billing, as long
are you are paid what you agreed to work for, on time, and in full?


Brokers have overhead like any other business. Office rent, phones, 
insurance, etc. Those that think that a broker's cut is pure gravy are
deluding themselves.
 
>        I spent many years supporting clients that I had developed on my
>own and am still quite capable of doing so if needed. The problem is that
>the true cutting-edge work is going on in corporations that post requirements
>to the brokers and can't be identified any other way. If you want to do
>this type of work, and I do, you have no choice but to deal with the
>broker community.
> 

You can thank the purchasing departments of major corporations for that. 
They got tired of dealing with 5-10,000 of us one-or-two-man bands and
developed the "preferred vendor" list for consulting and contracting help.
So, even if the client manager wants you, and found you independently of
a broker, you still have to bill through a broker on that firm's list. It
stinks, I'll agree. But, when it's happened to me, I called every vendor
on the list (usually 10-30 firms), immediately weeded out the greedy and
contractually unrealistic firms (nice PC term. eh? :+)) and was still left
with at least 2-3 firms that would pass-through bill for 3-5% of the billing.
That is reasonable.




Bob McIlree
rmac@well.com