Friday, October 12, 2012

Weigh a Contract Offer Carefully

As business and industry are experiencing increased volume and sales levels, more companies need to add people to support the additional work. However, many companies are responding by hiring contract resources instead of adding employees to their payrolls. This can be an effective way for employers to manage to the ebb and flow of business demands while, in most cases, delivering cost savings.

If you’re considering a contract offer, what are some things you should consider before you accept?

Know the Terms of Your Contract 
First, know who is responsible for managing the contract and your compensation. For example, contract positions are often filled through contract or temp agencies, not the employer.

Make sure you understand the specifics of your contract:  
What is your compensation? Will you be paid hourly or a flat project fee? If hourly, will you be paid for overtime?  What is the length of your contract and is there an end date? Will you or the agency be responsible for paying for your federal and state income taxes?

Potential Impact on Other Income Sources
Taking a contract position may impact your current or potential income sources. For example, if you’re receiving unemployment benefits, be sure to research your state’s benefits eligibility guidelines and earnings caps. Similarly, if you are receiving severance pay from a previous employer, determine whether accepting a contract job precludes you from continuing to receive severance pay. For the answer, read any documentation details you received from your previous employer or contact the company’s HR department.

Additionally, if you are mainly interested in securing a full-time, on-staff position, accepting a contract position temporarily impacts your availability to accept a staff position. In addition, it precludes you from dedicating much time, if any, to a continued job search.

A contract job can be rewarding and may even lead to an on-staff position, but before you accept a contract, understand all the details of the contract and how they impact you.

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