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I'm so impressed I want to pay you less

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Re: I'm so impressed I want to pay you less

#31

Post by nl »

OJ wrote: post #28
stoney wrote: post #13

Earlier quoted context omitted.

Assuming of course that you live in the US. In the UK it's relatively difficult to get rid of people - sacking is very difficult and likely to end up in court (you need a bulletproof reason for doing it) and the redundancy process is quite complex (with guaranteed payments if you've been there more than 2 years, etc). Looks like the blog article was written by an Australian - their level of job security falls somewhe…

Correct mate, I am an Australian. I would say that our job security level is closer to that of the USA than the UK, but I don't think it's exactly the same. On the whole I've seen way too many good people let go from permy positions while other plebs are retained. In same cases there doesn't appear to be any rhyme or reason to who gets culled and when. To me that's a real sign that the "important" differences between…

Actually, the Australian redundancy route is closer to the UK than to the US (we usually have 4 week notice period etc etc).

But Australia has such low unemployment at the moment that it doesn't really matter - forced redundancies are pretty uncommon at the moment.

I agree about the contractor thing regardless though - the difference in rates make permanent employment a pretty hard sell.

(I'm Australian if it matters)

Re: I'm so impressed I want to pay you less

#32

Post by nl »

smanek wrote: post #12
rorrr wrote: post #10

Earlier quoted context omitted.

Job security is a myth. You can get fired/laid off at any time, whether you're full time or not. In a few states they don't even need a reason to get rid of you (at-will employment). I have seen this happen at least twice in the last 5 years. Company runs out of money, a bunch of people get cut. I've seen pretty high level people cut for political reasons. Of course, officially they would never admit that, but they d…

Yeah, but an employee might get 'laid off' (and have to look for a new job) at most, say once every 3 years. It's possible it could be more often, but over the course of your career the average probably doesn't exceed once every 3 years (unless you're particularly poor). A contractor, on the other hand, has to look for new work every few months, at least. If I hate looking for new work, then being an employee might m…

The contracts I usually see are at least 6 months, and I've never, ever seen a case where it wasn't extended (not just for me, but for anyone I've worked with - including some "programmers" who simply couldn't program).

The few shorter contracts that are around pay have to pay extra to make it worthwhile - I've seen a few 3 month contracts that pay around 25% more.

Funny story: there is a large government department here that was famous for hiring people on 3 month contracts, but keeping the people there for years. It turned out that the reason for this was that the expense for a contractor for 3 months was around $50,000 (including agent fees and the 25% loading for a short term contract), and $50,000 was the limit for that the department managers could sign off on without going through a long, expensive procurement process.

Re: I'm so impressed I want to pay you less

#33

Post by nl »

sabat wrote: post #15
rorrr wrote: post #10

Earlier quoted context omitted.

Job security is a myth. You can get fired/laid off at any time, whether you're full time or not. In a few states they don't even need a reason to get rid of you (at-will employment). I have seen this happen at least twice in the last 5 years. Company runs out of money, a bunch of people get cut. I've seen pretty high level people cut for political reasons. Of course, officially they would never admit that, but they d…

Job security is a myth, sure. But that doesn't mean that contracting carries the same risk; the risk is greater. Meanwhile, as an FTE, you get vacation time, sick days, bonuses, and company purchasing perks. You get a much better insurance coverage than you can afford to get privately. * As a full time employee you might get a severance package, if the company doesn't feel like dealing with you, but it's completely o…

Note that the author is Australian, and health insurance works very differently.

We have a public system, but many people choose to buy private insurance as well. Depending on the level of private insurance you can pay anything from $2000-$10000/year (for one person).

It's very rare for a company to pay for a person's insurance, though.

Re: I'm so impressed I want to pay you less

#34

Post by nl »

wanderr wrote: post #26
rorrr wrote: post #23

Earlier quoted context omitted.

In my particular case I get paid around $90/hr ($135/hr for overtime, plus paid major holidays). Which comes to around $180K/yr. The full time position I was offered is $130K/yr. There's no way in the world vacation + health insurance is worth $50K. So if I take a month off, I lose $14.4K ($90 * 160 hours). A decent insurance PPO plan is $1100/month for me any my wife. So that's another $13.2K. So the total is $27.6K…

Plus another what, $13k, for self-employment taxes?

What's a self-employment tax?

The way it works here (Australia) is a contractor charges GST (basically a value-added tax) to the employer of 10%. The 10% is standard, so people don't usually include it in discussions of their rates (ie, if he is getting $90/hour, then the company is paying $99/hour).

After that you can handle the money how you like - if you are smart you can setup a company or trust so you only pay the company tax rate on most of your income. At worst you just pay yourself the income, and so you are taxed as though you have the $180K income.

Re: I'm so impressed I want to pay you less

#35

Post by OJ »

nl wrote: post #31
OJ wrote: post #28

Earlier quoted context omitted.

Correct mate, I am an Australian. I would say that our job security level is closer to that of the USA than the UK, but I don't think it's exactly the same. On the whole I've seen way too many good people let go from permy positions while other plebs are retained. In same cases there doesn't appear to be any rhyme or reason to who gets culled and when. To me that's a real sign that the "important" differences between…

Actually, the Australian redundancy route is closer to the UK than to the US (we usually have 4 week notice period etc etc). But Australia has such low unemployment at the moment that it doesn't really matter - forced redundancies are pretty uncommon at the moment. I agree about the contractor thing regardless though - the difference in rates make permanent employment a pretty hard sell. (I'm Australian if it matters…

Conditions aren't the important bit imho mate. The important bit is that you can still be got rid of fairly easily (unless you work in the public service, which seems almost impossible to be fired from). In that regard we are quite diff to the UK and more like the USA.

Forced redundancies are indeed uncommon at the moment, but I think that'll change. They weren't too uncommon just a few short years ago either.

Re: I'm so impressed I want to pay you less

#36

Post by OJ »

nl wrote: post #34
wanderr wrote: post #26

Earlier quoted context omitted.

Plus another what, $13k, for self-employment taxes?

What's a self-employment tax? The way it works here (Australia) is a contractor charges GST (basically a value-added tax) to the employer of 10%. The 10% is standard, so people don't usually include it in discussions of their rates (ie, if he is getting $90/hour, then the company is paying $99/hour). After that you can handle the money how you like - if you are smart you can setup a company or trust so you only pay t…

The company thing still comes with a caveat in that you have to prove that you're not just using it as an umbrella to reduce your tax. There are a set of tests that a company goes through at tax time, and they have to pass them in order to be considered a proper company (the 80/20 rule is one of those tests).

Re: I'm so impressed I want to pay you less

#38

Post by cubicle67 »

Slightly offtopic, but do you have in America casual employees?

In Australia, many non-professional jobs have award wages. These are the minimum rate you're allowed to pay someone in that position, eg a Pharmacy Assistant may earn a minimum (and I'm making these figures up) of $18.50/hr full time. I think this figure may vary by state, but I'm not sure. These rates are for full time employees; 37.5hrs/week, 10 sick days, 4 weeks holiday, 10 public holidays all of which you're paid for.

Anyway, there's also Casual employees who aren't paid for any of the above (no sick pay, holiday pay etc), and they usually only work [Disclaimer: I actually know very little about this, it being 10 years or more since I needed to know, and there's a high likelihood things have changed and the above info is all wrong]

Re: I'm so impressed I want to pay you less

#39

Post by jmeyers »

cubicle67 wrote: post #38

Slightly offtopic, but do you have in America casual employees? In Australia, many non-professional jobs have award wages. These are the minimum rate you're allowed to pay someone in that position, eg a Pharmacy Assistant may earn a minimum (and I'm making these figures up) of $18.50/hr full time. I think this figure may vary by state, but I'm not sure. These rates are for full time employees; 37.5hrs/week, 10 sick d…

Yes we do have casual employees, the term is "part time" in America. They generally work less than 20 hours a week, no benefits like time off or holidays, but they usually don't make more money than full time employees though.

Re: I'm so impressed I want to pay you less

#40

Post by rorrr »

wanderr wrote: post #26
rorrr wrote: post #23

Earlier quoted context omitted.

In my particular case I get paid around $90/hr ($135/hr for overtime, plus paid major holidays). Which comes to around $180K/yr. The full time position I was offered is $130K/yr. There's no way in the world vacation + health insurance is worth $50K. So if I take a month off, I lose $14.4K ($90 * 160 hours). A decent insurance PPO plan is $1100/month for me any my wife. So that's another $13.2K. So the total is $27.6K…

Plus another what, $13k, for self-employment taxes?

My current contract is W2-hourly. I'm pretty sure I get taxed just as a regular employee.
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