Oil & Gas Work (Contracts)

[WilsonFourTwo]

I find myself discussing a terrific position (office, senior level, matches my skill set) with one of the larger O&G Companies in town. The catch is that the job is based on a 1-year contract.

I'll be honest......I've never worked on contract before, and am a little put off by the idea. I suspect that the job could turn to permanent once business picks up, but who knows.

Does the CP Braintrust have any experience/advice with these scenarios? What type of rate premium is generally appropriate? Anything specific that should be negotiated beforehand? Is contract-to-permanent a likely scenario?

[Hockeyguy15]

One thing you should find out is benefits. I know our contract workers are not entitled to benefits here (holiday pay being the exception).

[Kybosh]

Definitely check out the benefits. Also be aware that most of the big O&G providers like to hire people based on the 1 yr contract to start. It seems to be the way things are done now as a trial period.

Contract work is fine but you really need to clarify the benefits up front. I signed a 1 yr contract once that said I got 4 weeks vacation after 1 year. I didn't renew for that second year so . . . yeah.

[WilsonFourTwo]

Originally Posted by Kybosh

Definitely check out the benefits. Also be aware that most of the big O&G providers like to hire people based on the 1 yr contract to start. It seems to be the way things are done now as a trial period.

That's really what seems to be happening here, as the position will be necessary in perpetuity. Frankly, I like the idea of a prolonged "Prove It" period.....provided I'm compensated for it.

Contract work is fine but you really need to clarify the benefits up front. I signed a 1 yr contract once that said I got 4 weeks vacation after 1 year. I didn't renew for that second year so . . . yeah.

That's the type of info-nugget I was looking for - THANKS!

[Shazam]

You might need to incorporate.

Need to get WCB. You might not be able to step foot into the building otherwise.

Going rate? I charge $125 if I like you. My co-worker bills out at $225. Anybody senior can get that.

[Tron_fdc]

Yeah, you should take into account everything you have to pay as a contractor (Income taxes, WCB, Benefits, etc).

All the contractors I know bill out almost double what their normal salary would be if they were hired as full time by someone.

[Slava]

Originally Posted by Hockeyguy15

One thing you should find out is benefits. I know our contract workers are not entitled to benefits here (holiday pay being the exception).

If you're already covered under a group benefits plan you should look to apply for your own coverage before you leave there. You should also look at setting up things like disability insurance before you go out on your own; that way your policy can be set based on your current income.

Feel free to ask specific questions if you have them.

[Bill Bumface]

Are we talking about independent contracting?

Some people will bring you on as a contract employee (you're an employee of a payroll company basically). Don't do this. It's the worst of both worlds.

Go as an independent contractor. Your tax rate, if you spend everything you make (worst case scenario) can drop below 25%, which is awesome.

You won't get paid if you're on vacation or sick. Not awesome. Especially if you end up laid up for a few months with something serious. Consider disability insurance on your mortgage if you have one.

Expect to pay $1K-$3K to an accountant per year. Remember you'll spend $300 just for showing up at the dentist.

For ongoing work that is likely to have you renewed repeatedly, get at least a 20% premium over what you'd work for as an employee at the same job. If it might be only for one year, I'd shoot for at least 70% over salary.

[TurnedTheCorner]

Most of the bigger companies will hire using temp or fixed-term contracts. Asses the company, inquire about benefits, and choose accordingly.

From your description, this sounds like an employee/employer relationship, not that you would be brought in as a contractor/consultant.

[WilsonFourTwo]

Guys - THANKS! I really appreciate the information. I had always dismissed the idea of being an independent contractor or even a contracted employee, so when the opportunity came up, I wasn't quite as prepared as I normally am.

This really, really helped.

[SeeGeeWhy]

Incorporate, get an accountant to advise on the above and help you pick a rate to charge. Get a bookkeeper or software that will help you track everything.

Are you engineering? You may need to register with APEGGA and also get professional liability insurance. Depending on the service you may need insurance of varying kinds anyways.

[IliketoPuck]

Definitely make sure you incorporate. It will allow you to write off lots of goodies come tax time. Home office space, leasing vehicles, electricity, phones, etc, etc, etc.

The one downside to consulting in my experience is that if I am not clocking hours, I'm not getting paid. That 3-5 weeks paid vacation a year is a nice little perk. Make sure your rate compensates you for the forgone wages, lack of job security, benefits etc.

If the rate is nice enough, I sense golden handcuffs in your future. Welcome to the dark side of consulting

[Shazam]

Never tell employees your rate. They'll pop a vein

[topfiverecords]

I don't think you can write things off if you're considered a contract employee. I believe if you work in the company's office, they provide computers, etc, and follow their working hours you are required to be a contract employee. In this instance it is the company that pays your tax, you don't have a choice to turn down work. Essentially you are an employee for a set time.

If you are an independant contractor, you should be working outside of their facility, on your own hours, paying your own tax. In this instance the company can not dictate whether you do work for other companies, and you have the ability to turn down work.

Really need to determine which scenario it is. I think there was a thread here somewhere about someone who was an independant contractor, but worked in the company's office and the debate about who should be paying the income tax.