What does it mean when u are "working under contract"?

Question

I have a job offer and it says I will be temporary and working under a contract for two years. Then after that they "may" offer me a more permanent position. What does this mean??

It is not with an employment agency. It is with the actual company I will be working for. A bank yo be exact...

Answer 1

It's an employer's way of hiring staff to meet current needs only. At the end of your contract, you are renewed or released. When employees are hired outright, they may have more rights and protections within a company.

Unions sometimes call the contract method "exploding contracts" because they disappear in a puff of smoke at the end of their term and the employer is not liable for certain benefits and protections you would have if you're a "permanent" employee. They also, do not have to show "just cause" for letting you go. This saves them a lot of administrative hassle.

Organizations that rely on grant money will often be in a situation where they know that their current funding runs out on a certain date and so does their ability to retain staff beyond that time.

You need to know why the company is only offering you a contract position. What is their situation? If it's legit, then at least you get your foot in the door and some experience for your resume.

Answer 2

Working Under Contract

Answer 3

If you got your job, say through Volt or Manpower you are actually the employee of those technical employment agencies. Your paycheck will be from the agency not the actual company you are working at.

As a contract employee you are not eligible for the company's benefits or 401k plan, or its medical benefits. However the agency that placed you there may have some of the same benefits as the company you are assigned to. Be sure to ask about the agency's benefits.

You were assigned to the company for a specific project which is expected to last two years. Or the agency that placed you there may find you another long term project to work on.

Many engineers and others in the technical fields work from one long term project to another for many years. It's a way of life for these engineering types.

I have heard that some companies direct hire contract employees. Microsoft did this in the late eighties and early nineties with their "perma-temps" and got sued for back pay and benefits. Depending on your local state employment laws, you may have more rights as a direct hire contractor.
Contact a labor law attorney if this is a direct hire contract.

Answer 4

If your application has "Working Under Pressure," then there is a big possibility that the job you're applying for is the kind that will put you under pressure. All people get stressed when under pressure, the employers know that. What's important is that you keep your cool and maintain a good attitude throughout the "tribulation." So, if you're the type of person who can work under pressure and diffuse stress easily with a smile, then say "Not easily stressed" in your application.

Answer 5

It means they're offering you a 2-year contract, but after that nothing is certain. They may offer you a new contract, or they may not. I suppose it depends on how business goes and how satisfied they are with your work.

Answer 6

working under contract is like a cell phone wit a contract phone deal.
you half to work for a certain period of time(say, 2 years) then after the two years you can quit the job whenever you want.. this is because you make a CONTRACT and sign agreenig to work for them fo a certaiin period of time. when the contract expiers(sort of) you can do waaht ever youwant to do with the job.(keep working or quit) hope i answeered well, nice question.

Answer 7

They should pay you more than a regular employee.
You may not get insurance.
May not get vacation.
May not get sick days.
May have to pay your income tax.
Have an attorney check this contract.
Perhaps it is a good deal.
Perhaps it is a way for the company not to give you as much.

Answer 8

It means you are not an employee of the company, you will paid a lump sum of which you are responsible for your taxes, pension, workers comp etc..
Really you would be considered your own boss as long as you do the work necessary anything above and beyond is not your responsiblity aswell as the hours you put in is up to you!

Answer 9

Well, clearly it means you will sign a contract with them, and the contract will contain what you have to do for the company and what the company will do for you.. so read it very carefully

Answer 10

The liabilities of working under contract

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Finding a job or an employee for a job you offer, is one thing. Finding the right job or employee can be a challenge. The Spring 2002 issue of HPSO Risk Advisor provided tips on what you should be aware of while you are either looking for the right job or if you are seeking someone to fill a position. Here you can learn what it means to work under a contract.

A number of healthcare professionals work as independent contractors. Rather than working for an employer to earn a living, these healthcare professionals are in business for themselves, working for their own clients.

Although there are a number of benefits to working under contract-for example, you can earn a higher pay rate than employees doing the same work, pay less taxes, and be your own boss-there are also risks, including legal ones. Becoming familiar with the legal risks of working under contract, and knowing how to minimize them, will help you, as an independent contractor, to thrive in your practice.

Beware of malpractice liability
Those who earn their livelihoods from their own businesses are solely responsible for their own actions. If a patient is harmed while under your care, your client's malpractice insurance will not cover you. For this reason, it's important for self-employed healthcare providers to carry their own liability insurance to cover all of the services they provide for their various clients. If you are under contract with a healthcare entity, be sure to provide a copy of the face sheet on your liability coverage.

Also, when you go to work at a new facility-whether as an independent contractor or an employee-insist that you receive an orientation before seeing patients. Don't be shy about asking questions about the facility's policies and procedures.

If you don't feel comfortable performing a certain activity because you lack the skill or knowledge, tell your client about your concerns and do not perform the task until you have received sufficient training.

Protect your worker's status
Healthcare professionals who work under contract must also ensure that their clients classify them as independent contractors, not as employees. If you are classified as an employee, you are entitled to certain legal rights and benefits, including workers' compensation, unemployment insurance, and labor law protections. As an independent contractor, you are not entitled to receive these rights and benefits from your clients.

Moreover, how an independent contractor is treated with respect to taxes is different from that of employees. For that reason, government agencies, including the Internal Revenue Service, can audit healthcare facilities in order to determine if their employees are classified correctly.

The IRS, for example, generally uses a 20-factor test to determine whether a worker is an employee or an independent contractor. Some of the factors that are reviewed include whether you can be fired by your client, whether you pay your own business and travel expenses, whether you can work for more than one client at one time, whether you set your own working hours, and whether you receive instructions from your client. The IRS may not consider all of the 20 factors, nor will it give each factor the same amount of weight when determining an employee's legal status.

The test is generally used to see if your client directs and controls the way you work, including when, where, and how the job is completed. If the IRS or another government agency determines that you do work under these conditions, you could be considered an employee, not an independent contractor.

If a government agency determines that your client should have classified you as an employee rather than an independent contractor, the consequences can be severe. The client will likely have to pay a number of fees and penalties to make up for the taxes and other expenses owed to the government that would have been paid if you were initially classified as an employee.

It's unlikely that any fees or penalties will be imposed on you in this case, but your livelihood could be put in jeopardy. Your client may cancel your contract to avoid paying the extra expenses to treat you as an employee, or hire you as an employee, paying you less compensation to make up for the extra employee expenses.

Although there can be a fine line between being an employee and an independent contractor, one way to help ensure that you are not classified as an employee by a government agency is to get all of your contract agreements in writing. The agreement itself isn't enough to demonstrate that you are an independent contractor, but it can help show that both you and your client intended to have a client-independent contractor relationship, as opposed to an employer-employee relationship.

You are also more likely to be considered an independent contractor if you set your own hours and market and provide healthcare services to a variety of clients-not just one facility, for example. Also try to get paid for each job that you perform rather than by the hour, week, or month. Be aware, too, that such provisions for compensation should be included in your written contract.

As a rule of thumb, to maintain your status as an independent contractor, act as if you are self-employed, not as an employee of a facility.

An important step in reducing the legal risks of working under contract is to recognize what they are. Once you do that, you can take steps to ensure a thriving livelihood through your own business.

Resources:

Broomfield, Larri J. Health Care Update, Winter/Spring 1996: Employee or Independent Contractor. www.rbvdnr.com/Articles/Health/employee.htm (15 Dec. 2001).

Nolo: Law for all. "Independent Contractors FAQ." http://www.nolo.com/lawcenter/faqs/index.cfm/catID/EC0EEB1C-16EA-4F81-833ED5890B19383A (14 Dec. 2001)