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Contract Engineers_Go Direct or Go Home

Contract Engineers_Go Direct or Go Home

Contract Engineers_Go Direct or Go Home

I did a search and I hope this is the right place to post as it is a trend.
I was told after 13 Years of contracting here that I need to go direct or go home.
The new definition of a contract engineer is a temporary employ of 1 year or less.
The word is that there was a suit by some Microsoft employees that has corporate scared.
Have anyone heard of this? Is it really going to happen this time? I remember they told us that 7 years ago and some rolled over but more then half of stayed contracting.
BTW this is in Aerospace in So Cal.

Thanks in advance  

I don't know anything but the people that do.

RE: Contract Engineers_Go Direct or Go Home

thread1088-244883: IRS cracking down on contract employees (warning, pub link)

Our HR got their knickers in a twist recently as well.

As far as I can tell, if the contractor is through a 'job shop' or employment agency I don't see why there is an issue since the 'job shop' is the employer and they are doing payroll taxes etc.

If on the other hand, you are a direct contractor, and get paid directly by "big aerospace inc" there may be an issue.

Might have been better over in "Overcoming Obstacles Getting My Work Done" but this'll probably work.


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RE: Contract Engineers_Go Direct or Go Home

There's a push for a similar policy in the Australian automotive industry as well, I'm not exactly sure who is behind it - sometimes it seems to be the union, sometimes it seems to be the employee, sometimes it seems to be the employer (we have the odd situation where you have to value your freedom highly to be a contractor, the pay +bennies is better as a permy, usually).  


Greg Locock

SIG:Please see FAQ731-376: Eng-Tips.com Forum Policies for tips on how to make the best use of Eng-Tips.

RE: Contract Engineers_Go Direct or Go Home

In Canada, the rule is more than one "significant" customer in any 2 year period and you're golden.

Work steady for 2 years for a single employer, and you're an employee- bye-bye to those tax deductions for business use of home, car etc.

RE: Contract Engineers_Go Direct or Go Home

For the last couple of years, I've noticed that a lot of corporations here in the US are putting caps on the time that a contract engineer can be on the payroll.  The cap is usually one year.  Not really sure why they're doing that.  As a matter of fact, it can be rather disruptive to projects.

RE: Contract Engineers_Go Direct or Go Home

In the US, it's the IRS that is driving this.  Apparently too many people are using this as a loophole to claim expenses, and thereby reduce their taxes, heaven forbid!

RE: Contract Engineers_Go Direct or Go Home

the US legal case is Vizcaino vs Microsoft.Its rulings are valid only for the part of the US for which that circuit court sits. Initially all US corporations had tought the ruling would effect all contact employees throughou all of the USA, and at that time many such contract employees woere laid off for at least a 3 month period, to ensure they were not deemed qualified for other benefits( health insurance, vacation, pension, educational benefits).

But that universal layoff policy only lasted one year- there have since been found to be other legal loopholes that employers can use to avoid falling into the Microsoft trap without forcing a 3 month layoff for permatemps.

I amnot a lawyer, but a search of the internet using Vizcaino v Microsoft should yield more leagl inerpretations than a normal person would be interested in reading.

RE: Contract Engineers_Go Direct or Go Home


It happened here. After the Microsoft suit, the management came up with a date. After that date, contractors that had been here 11 months or more were let go or offered a position.

Since then our contractor are brought on for 11 contracts.

RE: Contract Engineers_Go Direct or Go Home

IMHO I think the real issue is you have been there 13 years,why worry, you seem to like the job and if they give you the option of stay or go home I would say just stay.

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