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Only a availability heuristic, but I closed 2 consulting contracts that were a _hard_ "no we don't hire contractors" by letting them know I don't live in Califo
by r3trohack3r 3y ago
Only a availability heuristic, but I closed 2 consulting contracts that were a _hard_ "no we don't hire contractors" by letting them know I don't live in California.
Conversation changed as soon as they realized I was under AZ law for contracting/consulting services.
I was charging $10k per week, and one contract was a total of 6 months. The total value of that contract was $240k (before my expenses and taxes). That pool of contracting work appears to be closed to CA contractors.
- mountainofdeath 3y agoCorrect me if I am wrong but the only material differences between contractor and employee status are 1. Who pay's the employer side income taxes. Contractors pay both sides. 2. Not eligible for benefits, you have to go to overpriced open market. 3. The contractor can deduct reasonable expenses they incur. 4. A contract will not necessarily be renewed whereas for an employee, the assumption is the job will be there in perpetuity.
- chasd00 3y agoI could be wrong but I think contractors show up as a different kind of expense on the balance sheet vs an employee. In same instances it's more favorable to hire contractors than employees.
- r3trohack3r 3y agoI can't speak definitively to this, I wasn't in their seat. By my understanding is that they were concerned about the liability of a consultant/contractor under CA law because you can retroactively be relabled as an employee at any point in the future causing the business to be liable for unpaid taxes and possibly benefits?
- gamblor956 3y agoArizona has a similar "right to control" test for IC vs employee that California does, so the legal differences are minimal. If you would be reclassified as an employee under CA law, you're 90% likely to be classified as an employee under AZ law as well.