CXO

Should a freelance developer sacrifice freedom for a regular paycheck?

A freelance Web developer has an offer to become a full-time employee--but should she take it? Career guru Molly Joss offers some advice.


Q. I'm a freelance Web designer with a couple of years' experience. I can also do some programming for the behind-the-scenes stuff for Web sites. Recently, the owner of one of the Web design and programming firms I do work for asked me if I would become an employee. He said he likes my work, and he’s trying to grow his staff. And since I often meet with clients and prospective clients, he’d rather have me do that as an employee.

I’m not sure what to do. We haven’t talked about salary, so I am not sure if he could offer me enough. Plus, Web design firms seem to come and go—but on the other hand, it’s tough getting work on your own these days.

What should I do? Give up my freedom for a paycheck, or take the risk of losing the work if I tell him I want to keep the situation the way it is?

Evaluating the issues
A. You’ve got a tough choice ahead of you, so I'm going to give you some information to digest and some questions to answer before you make your final decision.

The lifespan of Web site design firms
First, find out as much as you can about how solvent and successful the firm is. As you noted, the lifespan of the average Web site design firm isn’t very long these days; it takes only a few months for the money to dry up and the doors to shut forever.

Employee treatment
You also need to find out how the boss treats the employees he already has. If he treats them fairly and pays them a good salary, that’s a definite plus. On the other hand, if he treats them like temporary workers and fires them the minute the cash flow slows down, that’s a red flag. Does he offer full or partial reimbursement for job-related training? If yes, that means he cares about his company and his staff, and he’s got money to invest in developing both.

Your job role
If the indicators are favorable, you can talk with him about what he would like you to do (to make sure it matches up with what you want to do) and about how he would like you to develop your job there. Ask whether he would put restrictions on you, such as not permitting you to take on work on the side or asking you to sign noncompete agreements if you leave the company. Don’t be afraid to ask, because this is the time to delve into unspoken assumptions on his part. You won’t be putting ideas into his head. Believe me, they are already there, and you need to find out what he’s thinking.

Get it in writing
If you do get to the point of seriously considering the job offer, here's one more suggestion: Ask for a written employment contract that specifies a reasonable length of employment of a year or more. Such an agreement should include a clause spelling out the conditions and terms of a severance agreement if he lets you go during the first year or so.

The long arm of the law
It's important to be aware that you may already be an employee of the company in the eyes of the federal government. For years, computer companies used independent contractors for key positions and thus avoided paying Social Security and benefits. Some companies also considered these folks disposable workers and would let them go without notice or severance.

Finally, a few years ago, the federal government decided to revamp its definition of an employee. The changes in the law affected all industries, but especially the IT world.

The legal definition is important for you to understand because your potential employer may be skirting the law and could be potentially liable for legal action and/or back taxes. If the employer is unaware of the law or is deliberately ignoring it, you don’t want to do business with him either as a contractor or as an employee.

You can read more about the difference between an employee and an independent contractor at the IRS site. If you have concerns or questions, you should check with a lawyer who specializes in employment law for information on how the guidelines affect you and your potential employer.

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