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Workers lose jobs everyday and may not be interested in going back to work for someone else. What are your options? Contract work or “freelancing” may be the answer for you. You can find work in your area of specialty and be your own boss.
However, before you get business cards printed, you should know that contract work may require more time and “work” than you first imagined. And, there are some costs you have to consider, like income taxes.
Contractor, Freelancer or Consultant
Basically, in each one you’re hired by a company, business or individual to do a specific task or project. Typically you’ll sign a contract or an agreement that describes the project or task you need to do and how much you’ll be paid. There are different names you’ll hear, but essentially they’re all the same thing:
- Contractor or independent contractor. This type of work usually involves elements of a business or tasks that are critical to the business’s operations. Computer specialists, engineers, and salespersons are good examples of a “contractor.” However, security guards, maintenance or janitorial personnel, and grounds keepers may be “contractors,” too
- Freelancer or freelance worker. Most contract workers who are writers, editors, journalists, graphic artists, web site planners or designers, and photographers are as “freelancers” in today’s market
- Consultants are, by definition, experts in their filed who give advice to the businesses that hire them. Consultants are common in the computer and information technology (IT) fields. They’re also persons with executive or upper-management experience who’re hired to help guide a business or company to success through things like marketing and business planning
Don’t get caught up in a name. These names are sometimes used interchangeably and there’s a lot of cross-over. For example, many lawyers call them themselves freelance or contract lawyers. So, if you’re a graphic artist, there’s no law that says your business card can’t say “independent contractor” if you want it to.
Contract Issues to Consider
This can be tricky. Most of the time, your job is controlled by the contract, including how much you’ll be paid. If, after starting a project, you realize that it’s more work than anticipated, you may not be able to negotiate a bigger paycheck. Or, if you’re asking price for the work is too high, you may not get the contract at all. So, you need to think carefully about the price you’ll charge for any contract work.
Also, it may cost you if you break or “breach” the contract by not completing the work on time or quitting before the project is finished. For example, say you stop working on the project and the company has to hire another person to finish it.
The company may sue you for the difference between the price you were supposed to be paid and the price the new worker was paid. It’s also common for a contract to have a “liquidated damages” clause, which usually is a specific sum of money you agree to pay if you breach the contract.
Finally, you need to be sure about who owns the work you do as a freelancer. Unless the contract says otherwise, the company that hired you owns anything you create for it. For example, if you’re hired to create a website or computer program, you usually can’t use or “sell” that material for another contract.