Question about pay as a contractor

Sherrie218·Mar 01·3 replies

Hi - I was laid off in 2020 and decided to pursue a part time opportunity with someone I met through networking so I can balance the needs of my kids during the Pandemic. When it came time for the hiring manager to actually hire me, it took a long time to figure out how to pay me. I don't have a consulting business with a Tax ID number, so they could not pay me as a consultant. They put me in touch with a contracting agency. So, now I'm officially working for the agency, I think. The agency is getting paid (I assume a lot) just to pay me. They did no work to find me and I do not think they are offering me anything special.Can anyone explain to me why the company I'm working for can't just pay me the hourly rate with no benefits? Since the hiring manager found me herself, what are the benefits they are getting from the agency? The company is relatively large (over 1000 employees) and is VC funded. Are there legal reasons? Is it related to benefits?I'm trying to understand why they brought this third party in, and I'm a little nervous about any negative impact it may have on me since I will be working for them instead of for the hiring manager. Thank you!

smichalczuk·Mar 01·1 reply

Hi @Sherrie218, did you offer to set up your own LLC / can you still offer to do that?

Sherrie218·Mar 01

Hi - I did not offer to do that. They already engaged with the contract firm, so I think it's too late.

Vanita88·Mar 01

This is common with tech companies. I work for a large well known tech company and all contractors are set up with a third party contracting firm. I think it’s there way to show that they hire more fulltime people to begin with versus contractors when that’s not exactly true.Anyways, going through a contracting company isn’t bad. At my company, they are treated exactly the same as FTE except they don’t get PTO. Otherwise, taxes, insurance, sick days, and 401k are provided by the contracting company but they are all different. Definitely fight for those if they don’t offer it.