1099 vs W-2 pro/cons

We as recruiters have to know what a traveler/contractor expects in their pay package.  We need to have a handle on money to determine if our company is a good match in their search for work.  It often happens that someone will give me a rate of pay that sounds astronomical and totally out of my range of an offer.  My next question would then be, "are you a 1099 contractor?"  So many people who contract individually hear an hourly or yearly rate of pay and are dazzled by it, as anyone would be!  

My company hires all of our special education contractors as employees who will receive a W-2 for their earned taxable wages.  The portion of the pay package that is non-taxable if you are a "traveler" (housing and per diem) is not listed on the W-2, nor is it required to be reported by the IRS.

I found the article listed below and think it gives a fairly good representation of the differences between a 1099 contractor and a contractor who is actually hired and under the umbrella of a company as an employee:


For a frame of reference, a 1099 contractor making 115k a year, will end up owing roughly 30k in taxes for that year. That is with a home office, mortgage interest, mileage, sales tax, office/computer equipment deductions - pretty much standard fare for a contractor.

Yeah, you can possibly be more aggressive and try to write-off more stuff - but the IRS is cracking down on the self-employed. Even taking a home office deduction is a risk.

You pretty much need to set aside 30% of your earnings and give it to the IRS quarterly.

The best way (that I have found) to compare a given W-2 job with a 1099 gig is to calculate what the yearly take-home NET pay is for each. For contracting, assume that 33% is your tax liability. Then add on health care. For the W-2 job, go to salary.com and use their paycheck calculator to figure out what your bi-monthly paycheck will be - and multiply that by 26 (many people forget that there are 26 bi-monthly paychecks in a given 12 months - usually resulting in an extra paycheck in June and December).

Then you have to take into account stuff like any matching 401(k) the W-2 company has, etc. There are also holidays and vacation to consider. A contractor is NOT paid for holidays and gets no paid vacation.

Also, if you plan on getting a loan for anything (car, house, etc) it is a bitch and a half as a self-employed contractor. Many times you have to get a "stated income" loan, which have higher rates.

NOW, you can avoid some of that if you incorporate. You can pay yourself a small salary, and then issue yourself dividend or bonus checks to make up the difference, and it will reduce your tax liability.

Honestly, if you do decide to take a contracting job, you should see a CPA about how to structure things to be best in your favor

Nightmare on Recruiter Road

 Most recruiters take their responsibilities to those working travel jobs for them very seriously; livelihoods are often in our hands.   So...when things go terribly wrong, we tend to fret over whatever happenstance we are dealing with.  So, when I placed one of my therapists (who was living in California) in a school district in Eastern Texas, I was worried about her making such a long trip by herself.  She had my cell number, and I encouraged her to call me along the way on her trip.  The first call came when she encountered a forest fire and had to take a detour, the second found her facing a huge traffic jam and being stuck on the highway for over an hour.  The final call came when she had car trouble and made the decision to hop in a car with a stranger to get help.  I'm a mother; I was aghast!  Luckily, she was fine and made her way to the Texas apartment by Sunday evening and to work on time that Monday morning.

Here's where the nightmare began for me:  She'd been on the assignment only 2 weeks when the client called to tell us that they were giving a a 30 day notice to end her contract, as they'd found a district hire to take the position!  OMG!!!  This poor girl drove through 5 states, forest fires, traffic jams and car trouble; left behind most of her belongings and family and missed the birth of her nephew to help this school.  I was LIVID!!!  Well.... I don't really get livid, but I missed at least 2 night's sleep worrying over it.

Well, I got on the phone and called every facility and school within 30 miles of her apartment.  The good news is that I found a pediatric clinic who needed help and agreed to have her start the next week; the bad news (for me, anyway) is that the bill rate is $9.00 an hour less than the school that ended her contract, and the clinic isn't giving her enough hours for her to keep her insurance benefits.  The worry continues, but I'll be back on the phones tomorrow trying to find her additional work.

We really do care about you guys and take it to heart when something goes wrong.  HONEST!!!

And.....let the dance begin!

You would think that since most schools districts around the country are already in session that the requests for Special Ed Professionals would subside a bit.  But.....noooooo, we still have 4 pages of school districts around the country still looking for school psychologists, occupational, physical and speech therapists.  The pursestring holders have finally relented and given the Special Ed directors permission to use contract services to fill their still-open positions.  So now they need us when so many of the therapists we had available in June and July have already accepted a placement for the 2011-2012 school year!

This, unfortunately, is the same dance we dance with school districts every year.  The directors are either very relieved that they have their open positions filled or are in a panic because they don't!  I have one director who has 4 maternity leaves coming up by mid October (she told me to count backwards to the ice storms in the Dallas, Texas area last winter...;-}.....) and I am scrambling to find SLP's who would be willing to work for only 8-12 weeks.  She did add that she has a couple more maternity leaves after the winter holidays.  (However, she didn't have any ice storm-type explanation for those.)  So, having said that, some of the Fall semester openings may transition into the Spring semester and become a near full-year contract.

If you are still looking for work, looking to make a change or think you might like to try a travel-type position, know that there are still beaucoup of jobs out there all over the country and you are needed!

Ceee-runch Time!!!

Well, it's here; the time of the year when the Special Ed Directors look at their roster and know that they are still coming up short for SLP's and OT's.  We've even seen a few full time PT spots for schools so far this year.  If you fit into one of those categories, you can be assured of employment.  HOWEVER......if you want to be 10 miles from your home, ask for $75 an hour and only want to work with elementary students, your choices go down considerably!

I spoke with a hiring manager in Iowa this afternoon who told me that his state is overrun with Speech Pathologists because the funding is tight and all they could do was lay off people and increase the caseloads for those remaining; Texas has run out of  federal stimulus funds and many districts are letting go all their contract therapists and offering early retirements to their veteran employees; North Carolina has held out until almost the last minute and is hinting that they may need Occupational and....just maybe.....SLP's.  They have also mandated that we reduce our bill rate by as much as $5.00 per hour.

What does all this mean for you job seekers?  Well, you may have to expand your location preference; if it works for your life-style, you may want to consider a travel position (see my January, 2011 post).  It may mean that you won't have a commitment for employment until after schools are already in session.  It might even mean that you need to compromise a little on your salary requirements.  Argh, the pain is hitting all of us!

We in the recruiting business have danced this dance for several years, knowing that the schools will eventually be in so much pain that they will get approval from the "holders of the purse strings" and call us for help.  BUT...in the meanwhile....all of you are getting nervous about finding work.  Take heart and know that the jobs will come; it's just taking a little longer this year.

Early intervention for all!

Just recently I have reconnected though Facebook with a long, lost cousin (I've actually only met him twice, as he lived in Florida and I was in Ohio).  We are both adults and remember very little about our past meet ups.  However, his wife is an occupational therapist and has a very interesting and unique website advancemybaby.com.  Her research and views on early intervention are apropos to all babies, not just those who may be labeled as special needs.

I'll be writing more about a research project that she will be conducting soon.  She will be looking for new moms to participate.

I suggest checking out her website; you won't be sorry!

New grads

Congratulations to all of you Special Education new grads!!!  You have chosen a field of work that is terribly important to the survival of our country!  You will create a better life for so many that will need your expertise.  I know you're all excited to get started on your career path, and there are endless avenues to use what you have spent so many years learning.

Good luck to all of you as you accept that diploma and head out to make your mark on the world!!!

Recruiters....psychologists or sales people?

As the girl poured out her heart to me, I couldn't help but choke back a couple of tears.  She had just moved out of state to escape a broken marriage.  Her husband was, she thought, "the love of my life".  I had merely called her to see if she might know any therapists looking for work, but here she was telling me all about the most pressing issue on her mind and in her heart.  She didn't know me from Joe Schmoe!

Another day this week, I woke someone (it was well after 10:00 EDT, and I was calling Missouri candidates), who said she'd been awake late as her dog had to have emergency surgery.  I could hear her struggling, trying not to cry.

I had one Speech Pathologist working with me who used to call me on an occasional Saturday morning, and we would chat over coffee on our respective decks.  She was in Flagstaff, AZ; I am in Atlanta, GA.  That was back in 2006, and we still have never met!   I have had the opportunity to meet a few of my "phone phriends" in person, and seldom had a correct image of the way they really look.  (It's hard to switch that image once it's settled into one's brain, too!)

 The phone calls we make daily careen us into the private lives and personal issues of so many folks.  We become friends with many of them, although we seldom meet them face-to-face.  And, it's always so much fun to call someone that you haven't spoken to in 3, 5, 6 years who still remembers talking to you!

Have you a favorite recruiter that you'll never forget?  I'd love to hear some stories!!! 

A day in the life.....of a recruiter

I know that many of you come home from a hard day of dealing with all the issues you have to deal with everyday only to find that your answer phone or the voice mail on your cell phone is jammed to the max with messages left by recruiters hoping to win you over.  May I take this moment to apologize to all of you for all of us.  I know that we may be only a notch (if even that) better than a telemarker in your mind, but please let me plead my case!

You probably don't know that we are all required (and there are 25 recruiters just in our schools department) to make a minimum number of calls each day in order to keep our jobs!  Depending on one's level of sales at my company, we are required to make anywhere from 40-75 phone calls each day!  I personally always check area codes to make sure that I am not calling the Pacific coast at 5:15 a.m.(8:15 eastern time), but with cell phones transferring from state to state, I have awoken a really cranky therapist on occasion, and am totally mortified that I've done so!  Again, I apologize for all of us who have committed such a faux pas.

Most of you are very gracious and thankful that you are in such demand and recognize that recruiters may have an employment opportunity that is not "out there" for the public yet.  We do keep in touch with Special Ed directors on a very regular basis and quite often are given a chance to fill a job before they even think about posting an ad to fill it themselves.  We also actively call Special Ed departments to "market" a candidate looking in a particular location.  We may uncover a position that is just in the "idea" stage in the client's mind, but presented with a very qualified candidate, may push through to expedite approval to make a more immediate hire.

Recruiters find positions nationwide and are an especially good resource if you are relocating.  They will do the "legwork" for you to explore the possibilities of employment in your future location and may have good information about housing, city events, parks, and even churches in the area.  Oft-times, we have already placed someone in the area and have inside information from our past placements.

So, I hope that you will adjust your opinion of recruiters just a bit.  We are not calling just to interrupt your day or to leave you messages ad nauseam, but to offer our assistance if not at this time in your life, maybe for some time in the future.  Now, I'm off to the phones!!

Choosing a recruiter

Deciding whether to use a recruiter in your search for employment can be a confusing process at best.  There are as many choices as there are professions.  The most important aspect is to find someone who has a compatible personality, work ethic and delivers what he/she promises.

First, you might want to understand what drives a recruiter.  It may be only money; it may be a desire to help people, it may be pressure from a manager or a combination of any or all of those, which is more likely the case.   Staffing firms have a variety of structures to pay their recruiters; some may be straight salary, some may have commission only and others may have a combination of the two.  My company falls into the later category, and is very fair; I might say, even brilliant in their pay structure.  No one here asks for a raise; they simply help more people find work, and their commission increases.

You will also want to do some investigating of the company itself.  Ask the recruiter who owns their company or the name under which they are publicly traded (if they are public).  Then you can go to http://www.yahoofinance.com/ and put in the name under quotes and check out their growth, how stable they've been, etc.  You can also check with http://www.bbb.org/ (Better Business Bureau) to see if there have been any major complaints concerning payroll or ethical complaints against that organization.  Asking others in your profession which companies/recruiters they think are the best is always a great way to start your investigation.

A really good way to test your recruiter is to ask him/her to call you back on a specific day and see if they follow up.  I'm not going to say that I've never made a mistake and forgotten, but a good recruiter will find a way to make good on promises.  Once again, finding a good match for your personality is key.  You may be someone who doesn't like a lot of  "checking in" phone calls, or you may enjoy a weekly conversation to touch base with your recruiter.  Talk to a few and get a feel for the one that makes you the most comfortable!

What is a "traveler"?

Questions about "traveling jobs"

Q.    Which fields most commonly are requested as "travelers"?

A.      Generally, most requests are for therapists; occupational, physical and speech.  However, in school settings, I have had requests for sign language interpreters, deaf educators, educational diagnosticians, psychologists,  and a few special ed teachers (usually requesting a specific certification such as visually impaired (VI), learning disabilities (LD) or orientation & mobility (O & M).  The demand for bilingual professionals is very much on the increase.

Q.    What is is the difference between a "traveler" and a "contractor"?

      A.    A “contractor” is usually someone who lives under 50 miles of a client, but is paid hourly  through a staffing service.   A “traveler,” is also paid hourly, but lives out of the area and temporarily moves near the location of the assignment for the duration of the contract.  This scenario will usually qualify him/her for tax-free housing and per diems to offset the expenses associated with living out of town while maintaining a residence back home.   Contractors, because they are near enough to commute from their home, do not have these additional expenses and would not be eligible for the tax-free per diem or housing.

   

Q.    Why would being a traveler or contractor be advantageous as compared to a permanent job?

A.    Travel or Contract placement can be preferable for a therapist/special ed professional in several situations.  For one, pay is usually higher when working through a contract service.  If you are traveling in a state or city away from your permanent address, your take-home pay will be greater because of your eligibility for tax-free monies in your pay package.  Traveling/contracting is also ideal if you are looking to explore new areas of the country for a while.
   

Advantages of permanent placement could include opportunities for professional advancement – a permanent employee will generally be offered promotions, choice of locations and  caseloads ahead of a contractor.   Also, benefits may be better (but not necessarily so) in a permanent environment.  Generally school districts have excellent benefits; and although the pay is much lower for district employees vs. contracting, candidates with a family may find that the better benefits package outweighs the lower annual salary.

Q.    What types of contract/travel assignments are available and how long is a typical contract?

A.    Most are with school districts, private therapy companies, skilled nursing facilities, hospitals, outpatient clinics.  My company has also initiated a new division (Vocovision), which offers teletherapy for speech and some sign language situations.  They are working on a model to include some aspects of Occupational Therapy in the near future.  Most school districts are looking for a full school-year commitment, but sometimes will have needs for a shorter duration to cover maternity leaves, unexpected hikes in caseloads or an unexpected resignation.  Hospitals and clinics are often looking for maternity leaves or coverage while they search for a permanent candidate.  Those assignments are generally 13 weeks, but always have the potential to extend. 
  

Q.    Will I be able to find an assignment anywhere in the exact area that I want?

A.    We certainly try to accommodate your location requirements, but can't always find the exact location with your desired setting and schedule.  Many large metropolitan cities will not consider travelers from out of state because of their large PRN pools locally.  Also states that have several universities with programs of your expertise generally don't need the assistance of an outside service, as the new grads are knocking on their front door!  If you are open to working one or two hours outside the major city of your choice, your chances of landing an assignment close to where you want to be will improve drastically.   No matter, your recruiter will always try to find you an assignment regardless of the market conditions. 

Q.    How do I decide on an assignment?

A.    Once your recruiter has found a client interested in your background, a telephone interview will be set up and conducted.  If you and the client continue to be interested, you let your recruiter know and you'll be on your way!

Q.    What procedure follow after I sign a contract for an assignment?

A.    Your recruiter will help you fill out prescreening forms, and guide you through the enrollment/credentialing process.  You will receive a contract and be instructed on where and how to get your fingerprints done and any tests that need to be taken (CPR, TB, etc.)  You will become an employee of the staffing service and will be issued a W-2 each January for tax purposes.  That staffing service will conduct a background check, drug screen and FBI fingerprint check on you.

Q.    Will there be any assistance in obtaining licenses and certifications?

A.    Your recruiter can provide you with links to sites with updated licensure/certification  information and there is assistance on our website (www.soliant.com).   Each state has different rules, regulations and costs involved in licensure.  Most require transcripts for new grads and verification of licensure from other states where you currently or previously hold  a license, as well as verification from your national professional licensing organization (FSBPT, ASHA, NBCOT) that you have passed the national board exam in your discipline.  Licensure is sometimes available by reciprocity (but is rare) if you have been licensed for a certain number of years in another state.

     Q.    Will I be offered a benefit package and what might those include?

A.    Most staffing services offer a benefit package, as you will be an employee as long as you are working your contract. Most will offer a medical, dental, vision, life, and disability insurance.  My company also extends benefits for school contractors over the summer if you commit to a contract for the following school year.  In addition, reimbursement for moving costs, licensure reimbursement, CEU allowances, as well as a matching 401K, weekly paychecks and direct deposit are also available. 

Q.    Does a staffing company cover air fare and/or rental cars?

A.     There are some circumstances where air fare and/or a rental car may be a part of your pay package, but that is rare.  Generally, it is recommended that you drive to your assignment so you have your own car to use during the assignment.  The cost of your trip to the assignment will be reimbursed by the employer after the start of the assignment up to a designated cap based on the length of the assignment. 

Q.    Will the staffing company set up and pay for housing?

A.    Most staffing services will include tax-free compensation for you and encourage you to find your own housing.  This means you will receive a weekly portion of your pay (tax free) that is to be used for your housing.  Most travelers regard this as a better system to that of providing housing because you can choose how much to spend and where to live rather than having us decide for you.  However, if you prefer, we do have a housing department that can set up your housing for you.

Q.    What is tax-free “per diem” and who is eligible?

A.    Tax-Free per diem is an allowance defined by the IRS as money that can be paid to you (tax-free) to cover living expenses incurred during the assignment. Candidates living away from their permanent residence (defined as where you are currently paying rent or mortgage) are eligible for per diem.  Your permanent residence must be a minimum of 50 miles away from your assignment.  The spirit of this allowance is to eliminate duplicate taxation of any expenses affiliated with work that would not be necessary were you living at home.

Q.    What type of compensation package should I expect?

A.    Compensation is quite competitive.   Exact pay will differ based on location and the bill rate we negotiate with the client.  It is always a good idea to discuss this with your recruiter on the front end of your relationship so as to not waste your time, the clients' or the recruiter.  There are some pay expectations that cannot be met no matter how great one's negotiating expertise! You will know exactly what rate is being offered before you are asked to commit to the client.

Q.    How are taxes handled?

A.    Contractors are W-2 employees and taxes are withheld from each paycheck based on exemptions selected during the enrollment period.   If you are eligible to be a "traveler", your tax bracket will be considerably less than a permanent employee because your per diem is not taxed and is not required to be reported to the IRS.

Q.    What type of support is provided if I have a clinical or administrative problem?

A.    This is where your choice of recruiters becomes crucial.  You will want to work with someone who is conscientious, follows up and follows through, returns your phone calls and works with you when a problem arises. 

I'll write more on choosing a compatible recruiter in the near future. 

Speech Language Pathology as a career

If you are considering a career as a Speech Language Pathologist, let me be the first to congratulate and encourage you!  You have chosen a profession that is very much respected, in great demand and is very rewarding.

I would, though, like to share some of the feedback that I, as a recruiter,  have heard about a few pitfalls that occur as you follow the path to reach that ultimate goal.

1.  Universities fail to tell you that your bachelor's degree in Speech Pathology will reap you very few opportunities in the field.  I take at least one call each month with an unemployed,  frustrated SLPA on the other end.

2.  Your graduating class could have 200+ walking with you to receive that paper representing your four very hard years of work.  However, your university's master's program is accepting only 25 of you! 

3.  Some master's programs require that you have a job as an SLPA as a prerequisite to acceptance, but very few facilities/schools will hire SLPA's.  (Which comes first the chicken or the egg?!!!!)

4.  After you have been accepted and completed your master's program, you then must find employment that provides a bona fide supervisor for your nine months of a clinical fellowship year.  This usually isn't an issue if you are working in a school setting.  However, if you are dead-set on a medical setting, you will find that very few facilities are willing to hire a new grad.  Some are lacking the proper supervision, some don't have time to mentor a new grad, as they are tied to productivity levels, and some won't risk a new grad handling swallowing issues.  Your university also doesn't give you a "head's up" about this snag.

5.  If you do find a medical facility (especially if it is a skilled nursing facility), you may find that your assigned supervisor is difficult to keep up with and you may find yourself having to hunt him or her down to get the proper documentation to submit to ASHA (American Speech-Language-Hearing Association).  The supervisor will have their own caseload and are sometimes in a different location from your work site.

Having said all of that, I can tell you that once you finish jumping through all the hoops, you are golden!  The job market is plush and you will be compensated fairly, be it as a permanent employee or as a contract or traveling therapist.

Sign Language Interpreters

It seems that I get a fair amount of interest in the profession of sign language interpreting.  I am even giving it some thought as a good second career when I get closer (and that time is nipping at my heels) to retirement.  Some of the advantages that I have gathered are:

1.  Once I hit age 62, my community college allows me free tuition.
2.  It is something that won't require a great deal of physical exertion.
3.  It would allow for a very flexible schedule.
4.  The possibilities seem to be endless for varied avenues to use such a skill (medical field, plays, churches, cruises, meetings, legal venues; it seems to be endless).
5.  I'll be able to talk about people and they won't know what I'm saying...;-}  How cool is that?!

There is a great deal of variance as to levels of training, certifications, venues of employment and the pay scale in the different categories.  A bit of a deterrent for me is that beginning in 2012, to qualify for certification status, one must have a bachelors's degree, which I don't.  There's a good bit of info on deafness.about.com.