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Start a business after 18 months as a Temporary contractor California California

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  • Start a business after 18 months as a Temporary contractor California California

    Hi,
    I have been working as a temporary contractor through an agency for 18 months.

    It seems that by the law this kind of contract cannot continue for more than 18 months.

    This said, if I start a company with some other people in my same situation, can we continue to offer a similar service to the same organization? Which form of organization would you suggest for 5 people?
    Thank you for your help!

  • #2
    What law says that you cannot continue as a contract for more than 18 months?
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

    Comment


    • #3
      I am not an independent contractor, am employed through an agency that loan my job to another company.

      My original contract was for 6 months, has been renewed for other 6 months and then again for another six months.

      What they told me is that after 18 month the law said that the company has to hire you as a permanent or let you go. They cannot keep renewing the contract forever.

      A way they use to go around this law is that the contractor stop working for 3 months and after that period they can start with the temporary contract again.

      Let me know if you need more clarification.
      Last edited by monigas; 11-19-2010, 08:01 AM.

      Comment


      • #4
        There is no such law. They may have told you there was; they may even believe that there is, since there is a LOT of confusion about this particular issue. But that is not what the law says.

        There is case law, in a groundbreaking, nationally publicized case that everyone has heard of, that says, in effect, that you cannot leave someone on a temporary basis FOR THE PURPOSE of denying them benefits. That is not even close to the same as a law that says you cannot be a contractor, or a temporary employee, beyond x number of months. But many, many people mistakenly believe that this case means that after x number of months (x varies depending on where you heard it) the temporary/contractor MUST be either hired permanently or let go. Many people who should know better believe this. They are wrong.
        The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

        Comment


        • #5
          Oh,
          ok, thank you for the information. Today I'll ask more about that and I'll get back to you.

          Comment


          • #6
            Agreed. No such law. HOWEVER, employers can make up rules, even silly rules. And employers frequently are confused on the difference between employer made up rules and laws. I have worked for employers who had somewhat similar rules. One employer had a set of rules primarily designed to stop line managers from doing an end run around senior management for staffing purposes. So we had a "6 month maximum" rule for temporary employees, designed primarily to keep us legal with the ERISA benefit plans. We had a different set of rules designed to make sure that so called contractors where not legally employees, and a yet different set of rules designed to bring a employee-equivalents into the light so that Very Senior Management know what their 300+ line managers were doing. We had a rule that said agency contractors could not be extended past 6 months without VSM approval. And line managers would come up with very creative ways of adding staff equivalents without going through payroll if you let them. I had one manager with a $1K/week "consultant" being charged on his expense report. Turned out to be his GF.

            The key is while there is no "law", employers do not need laws to create "rules". And once in a while the employer even has good reasons for "rules".

            ------

            Regarding the "organization" you want to create:
            - Who is blowing the smoke about the law? Someone might be lying to you to make you go away.
            - Past that, the organization type is not really the issue. If you want to be an arm's length vendor, then you basically have statutory laws that discuss this. NONE of which care about the organization type. Basically, if you are a real vendor, then you have many customers and are looking for more customers. You advertise in the yellow pages and Internet. You tend to work fee based and are not paid hourly. You use your own equipment and supplies. You can show a profit or loss. You set and control your hours. "Single customer" vendors are regarded with great skepticism by the government.
            http://www.dol.gov/whd/regs/compliance/whdfs13.pdf
            http://www.irs.gov/businesses/small/...=99921,00.html
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

            Comment


            • #7
              Yes I agree, apparently there is no such law.
              It's a rule they have to prevent being sued from us.

              Thank you for pointing it out.

              So, returning to the original question. To keep working for the same company without having to stop (in my case for 3 month); Would be ok to start a company that offers the same service?
              Do you think legal issues/internal policy from the client would not allow this?

              Comment


              • #8
                The client is almost certainly not your concern; the client is not your employer. However, I would be surprised if the agreement you signed with the agency doesn't include a noncompete clause. After all, you would be in direct competition with the agency.
                I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

                Comment


                • #9
                  DAW:
                  - I had this information from other contractors. They were referring to this policy of the 18 months as a law.

                  Comment


                  • #10
                    Ask the other contractors the name of the law. All laws have names. For example, minimum wage and overtime at the federal level are part of a law called FLSA.

                    If your 18 month "law" is a real law, then it has a real name that can be researched on the Internet. On the other hand, there are a near infinite number of Urban Legend laws, where "some guy" insists that the law exists but can never seem to find an actual verifiable reference for some reason.
                    "Reality is that which, when you stop believing in it, doesn't go away".
                    Philip K. **** (1928-1982)

                    Comment

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