Published on May 19th, 2015 by Alan L. Sklover
“The second mouse gets the cheese.”
– Terry Pratchett
ACTUAL “CASE HISTORY”: These days, as employers are seeking to limit employee-related expenses, yet retain the services of valuable individuals, they are increasingly turning to the hiring of individuals not as employees, but as independent consultants.
The reduction in employee headcount provides employers with lower overall expense, especially as to benefits and legally-required payments, such as mandated contributions to healthcare under the Affordable Care Act, Social Security, unemployment benefits, and workers’ compensation plans. In addition, most of the many other laws that protect employees from discrimination, retaliation, harassment and non-payment of wages, are not applicable to independent consultants.
For this reason, we are seeing more and more people “selling their services” as consultants rather than as employees. The most common scenario is for a company to provide to a consultant its “standard form” of consultant agreement for signature. And just as commonly, important points in those “standard forms” are slanted heavily in favor of the interests of the company, and not the consultant.
But, “forewarned is forearmed.” You have every right, and an obligation to yourself and your loved ones, too, to request changes in the language and terms of any agreement. Here are the most important points to raise if it is a Consulting Services Agreement.
LESSON TO LEARN: Most employees do not have written contracts, for many different reasons, chief among them that employers commonly view written agreements as commitment they don’t want to make, and may be difficult to get out of. (That said, senior executives do commonly have written employment agreements that do protect them.)
On the other hand, most consultants do have written contracts, provided by the company, that lean heavily toward the protection of the rights and interests of the company. As a consultant, you look to your own resources – and not legal protections – to protect you and what should be yours. If you do not, you have only yourself to blame.
WHAT YOU CAN DO: In any Consulting Services Agreement submitted to you for your review and signature, look to see if these “21 Smart Points” are already provided and are clear, and in your interests. If not, consider asking that they be inserted to clarify and modify the consulting services agreement, either (a) incorporated into the main agreement given to you, or (b) set forth on a “Rider,” “Addendum” or “Amendment” in each instance to be signed by both sides when the main agreement is also signed.
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