Employment Vs Consulting in US

[Manish Hatwalne]

What are the advantages and disadvantages of employment position AND ontract consultant position in US. Do laws change for these w.r.t State. How is it in MN?

TIA,
- Manish

[Homer Phillips]

The short answer is it all depends on the client and the contracting company. The truth is it's usually the same wherever you go. Generally I think most people would be better off being a direct employee. Some people probably benefit from working on contract, but if you were one, you would know.

[Warren Dew]

I agree with Homer that it depends on the individual. A lot depends on the relative weights you place on job security versus independence.

[Manish Hatwalne]

Apparently, not much of independance in contract. As of now I am in India, so have absolutely no idea about US laws, these are my first attempts to figure out.

What sort of Job security does "employee" position offers in US? What about contract position, what are you enitled to? Would appreciate more information.

- Manish

[Homer Phillips]

Theoretically most job in US are covered under a concept known as at-will employment. This concept roughly is defined as when ever either side of an employer-employee relationship wants to terminate it they can. They can terminate it for any reason, moral or immoral.

IIRC this concept was first defined in the Tennessee state supreme court. Over the years the legislature has passed laws narrowing what can be allowed under at-will. For example, age discrimination for people over 40 is now illegal.

To get around the laws enacted by congress employers have taken to hiring employees through a third party, contracting companies. These contracting companies are shell companies. They don't have any assets and therefore are not worth suing for their illegal/immoral activities.

In order to be competitive or as profitable as possible the contracting companies generally take to cheating their employees to the best of their abilities. The end employer use the contracting relationship for all sorts of sordid actions, too.

BTW it's not consulting. If you've never worked in the US as a contractor, tell them you don't have enough experience contracting and therfore you can't take one of their screw jobs.
[ December 22, 2004: Message edited by: Homer Phillips ]

[soniya saxena]

On H1B, u almost always start off as a contractor.

Contractor - Client kicks u out - u still have an employer which is ur contracting company - hence u r still in legal status thou u wont be paid till u find the next client

Full time employee - Company kicks u out - u r on ur own - u lose legal status - u need to find a new H1 sponsor within 10 days - laws around this are not too clear - most people take more than 10 days to find an H1 sponsor

Earlier, contractors could command unbelievable salaries. Under the current economy, the percentage of such highly earning contractors is low.

My opinion is that in the current economy, it is really tough to take control of ur career in the US. Irrespective of a full time employee or a contractor; everything depends on how long the company survives. And in most cases, u realize that things r bad only on the day of the layoff.

If the economy if good, I guess contracting is abt minting money, and full time employment is about stability and growth.

Originally posted by Manish Hatwalne:
Apparently, not much of independance in contract. As of now I am in India, so have absolutely no idea about US laws, these are my first attempts to figure out.

What sort of Job security does "employee" position offers in US? What about contract position, what are you enitled to? Would appreciate more information.

- Manish

[Jay Shin]

Originally posted by soniya saxena:
On H1B, u almost always start off as a contractor.

Contractor - Client kicks u out - u still have an employer which is ur contracting company - hence u r still in legal status thou u wont be paid till u find the next client

Absolutely wrong.

In this case, the H-1B worker is technically on "bench". Benching is strictly prohibited under the H-1B laws.

So, contraty to what you said, the H-1B worker becomes in "illegal" status.

The contracting company is the H-1B worker's employer (i.e., H-1B sponsor).

It is a statutory violation of the required wage obligation for an employer to place the H-1B worker in nonproductive status based on factors such as lack of work, and fail to continue to pay the wage level stated on the LCA (Labor Condition Application) and in the H-1B petition.

In my opinion, H-1B workers are not meant to be working as contractor/consultant in the U.S.

Based on my rough estimate, almost 100% of all H-1B contractors/consultants here in the U.S are illegal workers.

[Prema Chakravarthy]

Hi Jay,
I am a citizen of US. I did a 1 year gig 3 years ago to get into e-commerce once. I was working for a contractor and I was on "bench" for 3 months after which I quit and found a better job. I was paid fully during those three months, I got an annual review, a rise and a bonus during that time. If the contractors paid these H1B visa holder while they are on bench, why would it be illegal?

I am trying to educate myself...

[Jay Ashar]

Originally posted by Prema Chakravarthy:
Hi Jay,
I am a citizen of US. I did a 1 year gig 3 years ago to get into e-commerce once. I was working for a contractor and I was on "bench" for 3 months after which I quit and found a better job. I was paid fully during those three months, I got an annual review, a rise and a bonus during that time. If the contractors paid these H1B visa holder while they are on bench, why would it be illegal?

I am trying to educate myself...

If they are paid their full salary on bench it would not be illegal, but if they arent paid anything then it is illegal. Most of the H1Bs I know do not get paid once they are on bench and that is illegal, since they are not getting paid they should be leaving the country in specified time period instead of working on gas stations and 7-11.

[Jay Shin]

why would it be illegal?

I am trying to educate myself...

I was responding to Soniya Saxena's false statement which said the H-1B worker on bench (with no pay) is in leagal status.

The employer must continuously pay for the minimum number of hours specified in the H-1B petition.

Currently, there are as many illegal H-1B contractors as illegal aliens working at Dunkin' Donuts.

[Homer Phillips]

why would it be illegal?
I am trying to educate myself...

Foreign nationals are not supposed to be competing with the domestic labor force. H1-Bs are supposed to fill positions where no domestic employee is capable of fulfilling the position. When you have an H1-B on the bench looking for a new position that's what is happening.

Pretty quick the employers want the best they can get at the price they are willing to pay. As the supply of labor goes up the price they are willing to pay goes down. H1-Bs are supposed to be deported so that the citizens of the employing country have a competitive advantage in the labor market.

Some people believe that educating yourself and keeping up with technology is an occupation that should pay a living wage.

[Frank Silbermann]

Originally posted by Homer Phillips: Some people believe that educating yourself and keeping up with technology is an occupation that should pay a living wage.

Maybe this is the revenge of the jocks and popular kids over the nerds. Business executives believe that no one should earn a good income unless that person is managing lots of people, playing politics, selling, or otherwise displaying lots of personality.
[ December 27, 2004: Message edited by: Frank Silbermann ]

[Damian FRACH]

I do not know, but J2EE architects in UK are earning more than low level managers ....

[Prema Chakravarthy]

Damian,
The difference is- there is usually only one atchitect in the company but several managers.

Our architect was let go of last year because the new project that he was hired to do was done and he is too expensive. All the manager types are still around though...

[Damian FRACH]

Yes Prema, I know. Therefore I want to be a technical architect.

Only way how a technical guy can win a battle against managers.

I am curious, who is doing an architecture of your SW solutions in your company.

Managers .... ??? .... ))

[Prema Chakravarthy]

Damian,
No one really, we are more of an operations company, not a product-oriented. So, we are just maintaining the existing J2EE system for now. It is likely that someone from within the company will be elevated if there is a need to architect something in the future. All engineers are experienced (8 years or more experience). So, there is no lack of expertise.