The Pitfalls to being an Independent Contractor

by Hava Lyon | More from this Blogger

24 Jan 2007 10:12 PM

My friend, Darlene, has been working at home as a transcriptionist for several companies, including a general transcription (GT) company and a medical transcription (MT) company. She recently quit the GT company because she was making more per hour at the MT company, and she also liked the work that was available at the MT company more. Just yesterday, she got an e-mail: She was let go from the MT company effective immediately, because there was not enough work to keep her employed there. They told her that as soon as the work picked back up, they would love to hire her back on, but until then, they had nothing for her but a letter of recommendation.

Darlene went from having two steady jobs to nothing within the space of a week. I'm sure that there would be many out there who would be quick to point out that this could have happened just as easily to an employee as it did to Darlene who happens to be an independent contractor. In some ways I can see that as being true, but there is the fact that as an IC, you are responsible for getting your own work, for paying your own taxes, for scheduling your own hours, and with that flexibility and responsibility comes the fact that you also tend to be more disposable than an employee would be. ICs set their own schedule, so a company will usually hire more ICs than they need, just so they can make sure to keep all of the work covered. Companies rarely know how much work they are going to have in a given week (transcription companies are notorious for this) so they will overhire their IC base on the premise that if they don't have enough work to go around, they will simply let the ICs go and rehire later when the workload picks up. ICs usually have several companies that they work for, so there is a mentality that it's okay to change their workload at the drop of a hat--after all, they have other companies they can get work from, so it doesn't really hurt the ICs.

That's why I have discussed the idea of having multiple baskets to put your "eggs" into, so that if you do suddenly get released from one company, you have others you can fall back on. Luckily for my friend, she had been recently hired on as a blogger for a website, so she can write blogs while searching for another transcription job. I asked her if she was going to search for an employee position or IC position this time, and she told without hesitation, "IC! I have to have the flexibility!" And sometimes, that's what it really comes down to.

Would you rather work as an IC or an employee? Leave your comments below!

Learn more about Hava Lyon

Hello, my name is Hava or Havs (depending on my mood and yours!) I am a freelance writer who writes for several blogs, both paid ones such as this one, and personal blogs.

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Valorie Delp (49340) 25 Jan 2007 11:33 AM

I write here. . .but I have another job in educational publishing as well. It pays very well but is also unsteady. It works for me. . .I call it my kitchen remodeling money. OTOH, people who do the IC thing as their "real" job and/or want to make a lot of money doing it have to work very very hard at keeping their eggs so to speak, so that they have a 'steady' paycheck. What I find the "trick" is is to have enough eggs to get by when things are lean but not have so many eggs as to have to pass up more lucrative but perhaps less frequent offers.

Hava Lyon (1545) 05 Feb 2007 06:36 PM

Yeah, and I think that balancing act is just about the most difficult in the world to accomplish. It seems like you can go through a feast and then you're onto a famine in the blink of an eye. IC work is so different from the typical 9-5 job that many people who have only worked the 9-5 have a hard time understanding the IC world. I know I did before I quit the 9-5 world and tried my hand in the IC stuff. It was a real wake-up call for me! It has great benefits, but also horrible disadvantages.

Thanks for reading!

Havs