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Would you let DH do this?

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atm123

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A couple of weeks ago DH seemed like he didn't want to take a contract position, but this week he is all about it. He wants to take this position, because it pays 30k more than the other offers he has gotten. Thing is, we would have to get our own medical/dental/vision, retirement, and life insurance (Is there anything that I am missing there that we would have to pay?) He also would not have any paid days off, but he did take out 2 weeks of unpaid vacation from the salary to figure out his total pay. He says the position is stable and probably would not have any problems finding another job if needed.

DH has never done contract work and I am very leery of the unknown. DH has always had the goal to get paid over $100k by the time he is 30 and this would help him surpass his goal by quite a bit. Are the numbers just getting to his head or is it worth it to take this position? Has anyone ever done contract work or has your SO done contract work? What are the perks/drawbacks?
 
Will he be the independent contractor?
 
As an independent contractor, he has to pay self employment tax (SS and medicare as employer and employee), you may want to factor that as part of the package.
 
He'll be employed by a contracting company.
 
How does he know it's a stable position? Is there a chance they'll hire him on perm?
 
Living w/o medical insurance would make me very very nervous. Buying insurance on your own cost a small mint. I would really think about it before I would jump into an unsure territory.
 
Gal at work, her DH did contract work for a few years when his company merged with another. He made great money, but there were times when there was no work for him. No work means no pay. They loved the fact he could come and go as he pleased, but there was that pesky "nothing to do' every now and then. Nothing to do means no pay. They were covered by her insurance through our work so that helped a great deal. He now works full time as an employee for that company and does contract work on the side for another.
 
It is stable because DH has talked to different recruiters about this company/job (even those who were trying to get him to work somewhere else). Basically they can only hire people on once a year, but have a huge contractor budget. What DH does apparently is in great demand. Obama mentioned that is was in his State of the Union address :dunce: Since DH has been looking for less than a month, has been rather selective, and has gotten 2 job offers without a face-to-face, I don't think it would be hard for him to get another job fairly quickly if he was laid off. I guess I am just more worried about a contractor vs. a direct hire with the company. The extra money seems to good to be true...
 
Fuzzysox said:
Living w/o medical insurance would make me very very nervous. Buying insurance on your own cost a small mint. I would really think about it before I would jump into an unsure territory.
Click to expand...

Not only is private insurance EXTREMELY expensive, you also don't get anywhere near the same level of coverage that most group plans offer. And, if you have to dispute anything, the insurance co. will be less likely to listen to you, since you don't have the buying power of a group behind you. Also, consider if everyone in your family will even be able to get private insurance - many companies will reject individuals outright for any number of pre-existing conditions, previous surgeries, etc.
 
no i would urge him to not do so. seeing as he is the head of the household, i would let my husband do what ever he deemed "headworthy" but i would try to help he see the reasoning i have behind the feeling i had about him not making this choice. any loving husband should sincerely take the opinions of his wife into consideration when making such an important decision.
 
I love being an independant contractor, but that is because my DH is fully employed with benefits and a pension and pays into SS.

Depending on the type of work and if he has OOP expenses he might not have to pay self-employment tax, BUT he also wont have the dollars in SS either (does it really matter by the time he can get it, who knows)

Is he talking about doing this for good? look hard it all the benefits from a regular job, including unemployment if he looses the job before making a decision. My income is less than 10K and I tradiationally have a loss after travel and expenses since I do in-home services and it does end up lowering our AGI most years, but again I have my DH to fall back on.

I think you are in school, right? how long before you finish? are you goint to look for full time work? If you can get insurance and benefits it might work out for you all. Also, how is everyone's health?
 
Is he working now? If not, I say take the job. He can still be looking for a FT/permanent position elsewhere, or he can express his interest to this company that his goal is for them to hire him eventually.

If he is working...then I'm not so sure. Quite a bit of the "extra" $30k will go towards insurance and the self employment taxes. When DH was self employed his health insurance ran about $1,000/mo. Last year DH had $12k of his salary go towards insurance, so no difference. :faint: That being said, you could get a health insurance plan that covers "catastrophies" only and pay basic medical expenses out of pocket. Since many doctors offices and hospitals offer better rates for the uninsured, this may not be a bad idea. Of course if you, DH or any of your kids have pre-existing conditions or are sickly or accident prone this probably wouldn't be a good idea.

I'm trying to think if my DH had this offer, would I encourage him to take it? Probably not. BUT I only say that because his current employers have been very good to him & I believe in loyalty to your employer when they treat you well. If my DH was actively looking for a job, and was in a field that was in high demand, I'd tell him to go for it & we'd make it work. Right off the bat I'd use the extra income to pay down any debts & start saving for that rainy day when the contract is up, just in case the next time he's looking for a job it isn't so easy.

If you guys do this, check out MetLife for life insurance. DH has a $250,000 policy for $25/mo. He's 48 & quit smoking 4 days before the test, so it's not like he's a 25 year old, buff, exercise fanatic (**** it!) ;) That's a fraction of what he was paying for a $100,000 policy elsewhere.
 
mrs.melton08 said:
I love being an independant contractor, but that is because my DH is fully employed with benefits and a pension and pays into SS.

Depending on the type of work and if he has OOP expenses he might not have to pay self-employment tax, BUT he also wont have the dollars in SS either (does it really matter by the time he can get it, who knows)

Is he talking about doing this for good? look hard it all the benefits from a regular job, including unemployment if he looses the job before making a decision. My income is less than 10K and I tradiationally have a loss after travel and expenses since I do in-home services and it does end up lowering our AGI most years, but again I have my DH to fall back on.

I think you are in school, right? how long before you finish? are you goint to look for full time work? If you can get insurance and benefits it might work out for you all. Also, how is everyone's health?
Click to expand...

DH wouldn't be an independent contractor, just a contractor. I don't know if that makes sense. He gets paid by the contracting company and not the company he is actually working for. So I am pretty sure that SS and unemployment would be figured into it. He told me that he is going to talk to a CPA before he would accept the job.

I am in school and only have one more class, but I am not planning to work. Everyone's health is fine.
 
Our contracting experience was not a good one. We didn't have to pay for insurance because I was employed and had better benefits than him anyway. But, we heard nothing but positives about the place and DH was told he's be "hired on" for sure. He had worked there just shy of a year. One week in October he went in for a his review. The boss had nothing but positives to say and told DH his plans for DH in the future. The next week he was told they couldn't keep him on after his contract expired due to a technicality one there side. Their rules didn't allow them to keep a contractor longer than 1 year without going to a "statement of work," but they couldn't write a statement of work for one individual from a contracting company...had to be multiple individuals and DH was the only one from the company he was working for. So, my thoughts are, there are no stable contract positions.
 
Have you and your husband figured out what the exact costs would be? You should investigate prices of insurance, etc. Then you will know what his take home pay would really be like; then you could really judge whether this is such a great job or not. Good luck and hope all goes well.
 
A good comprehensive family health insurance plan can run 20k a year or more. Health plans can no longer exclude children with preexisting conditions, but they can rxclude adults.

If they will pay his payroll taxes, they also have to cover his unemployment and workmens comp.

Run the numbers. If they work, it may be worth it, but for me, 30k higher with no benefits is not enough.

Contract workers are also much more disposable.

Has he considered negotiating directly with the employer for the job? Just sidestep the contracting service?
 
PS - Nothing is stable in this economy. No field. No employment type. It is a buyer's market. That is why many employers are contracting employees in this way.

There are pros & cons of contract work, W2 employee work, and being self-employed. Depending on the field, it may be normal for his position to be contracted instead of direct-hire. But employers use contract employees because it is beneficial to the employer, not the employee. There is a reason they are doing it this way. You may never know why, but it is of some benefit to the company, not the employee.

Does he have a written offer? If so, it should spell out how they will pay him (W2? 1099? huge difference to your bottom line), etc. Then you need to price out all those other things you consider to be benefits to see how much they will cost to duplicate and compare the two. You need to really search inside yourselves to admit whether you are disciplined enough to obtain & pay for life insurance, health insurance, save the $ to pay for the 2 vacation weeks, contribute to retirement accounts, etc. In these ways being an employee is easier because those things come off the check and it is seamless, easier not to mess up or reprioritize.

It's totally possible he could have better compensation as a direct hire when both paycheck and benefits are considered, even if the yearly salary is somewhat lower. Isn't always safe to get stars in the eyes over "the number" because the "number" is not always the "number" when everything else is considered.
 
I was just told by United Healthcare that they no longer cover the cost of a cholesterol screening for women, only for men!! Isn't heart disease the leading cause of death in women? My point is that, not only is health insurance going to cost more each year, but the coverage is now less. More out of pocket expense for all. Thank you Mr. President! BTW, the Obamacare is what my insurance worker called it and continued referring to it that way during all my questioning regarding why so many things that used to be covered or no longer being covered.
 
You can get your cholesterol screened at Meijer, Walgreens, or CVS for free, in case you needed it.

Crdnl also if your husband is in a job that leaves him at risk of being sued (dunno what the job is), you also need to price liability insurance and / or E&O insurance. If he is sued the employer will not cover his liability exposure.
 
When I used to work in the corporate world (I left when dd#1 was born over 14 years ago so it may be different now) one of the things I would do is calculate the fringe benefit rate. The real cost of the labor was not only the salary but the benefits that the employer provides that you mentioned. It was approximately 50%. So an employee making $100K was actually earning $150k when you factor in the benefits they were receiving. Your dh needs to look at what he would be earning as a contractor and see what the comparable salary would be at a corporation less the benefits. Make sense?
 
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