As a contractor should I bill my hours even if there's no work?

Question

I have a contract with a fairly large company doing a specialized task. The contract states I will work a maximum of 10 hours a week for 8 months.

Because of this, I have allocated 10 hours a week of my availability towards this contract. The thing is the work is not consistent. Sometimes they need me to work, and some weeks they have nothing for me to do. It really goes day by day. I invoice monthly and the month end for the first month is coming up. Realistically this month I have probably worked 10 hours of the 40 my contract states.

My hourly rate is not high, so in my mind this is really not costing them much to begin with if I bill the full 40 every month. I feel like if I only bill the 10 it's not worth my time.

I'm fairly new to the entire contracting thing as I still maintain my full time job, so I have absolutely no experience with this situation. What is the thing to do here? It seems like they are just slow and unorganized on their end and things may pick up in the next few months.

EDIT:

The wording in the contract is exactly as follows in regards to hours per week:

"This contract is to provide services when required for (specialized task) and it is not anticipated that this will exceed 10 hours per week."

In addition, my hourly rate is ~$30/hour which is basically nothing, the company I have the contract with is worth upwards of 1 billion.

I'm mainly wondering if you think think they will have any issues with me billing the full 10 hours a week.

Answer 1

It is highly likely that:

In the actual circumstances/corporation you describe:

of course

they are expecting you to simply bill the fixed $300 a week.

It's a token amount of money weekly. Naturally there's fine print in all directions in any "standard contract, grab a PDF."

For such a tiny amount of money, based on the actual circumstances/corporation you describe it is incredibly unlikely they are envisaging you recording hours, worrying about the exact amount of time, etc.

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"I'm mainly wondering if you think think they will have any issues with me billing the full 10 hours a week..."

In the actual circumstances/corporation you describe it is almost certainly the case they simply expect you will be paid the $300 a week. It's a "$300 a week contract".

(At worst they reply - and this would be astounding, utterly bizarre - "we were thinking of paying you $30 a week some weeks". In which case you would obviously say "thanks and goodbye".)

Answer 2

You'd bill for the hours you worked. If you worked 10 hours this month, bill 10 hours.

If you want to bill 10 hours a week whether or not they have work for you, that's something that you'd need to include in the contract you negotiate. Rather than just specifying a maximum number of hours, specify a minimum number of hours and potentially something about when they need to provide work in order to use their hours for that week.

Answer 3

This is entirely dependent upon your contract. What does your contract state? Does it state hourly billing for hours worked or does it state retainer billing for a monthly block of hours with a "use it or lose it" provision?

The most important thing you can do as an independent/freelance consultant is to make sure your contract spells out in specific details the exact terms of your engagement. This includes things like scheduling, availability, hourly rate, hourly commitment (how many hours per week/month), overages, underages, discounts, after hours work, travel costs, etc., etc. The second most important thing you can do is to purchase professional/business liability insurance.

Below is a boilerplate hourly contract that I use. I start with this and tailor it to the specific client:

By signing this agreement, [CLIENT NAME] (Client) has retained [SERVICE PROVIDER NAME] (Service Provider) to provide Information Technology related services for the period [START DATE] to [END DATE], and agrees to the terms and conditions as set forth in this Agreement.

During this period, Service Provider agrees to provide Information Technology related services at the rate of $ [HOURLY RATE] per hour on assignments to be determined by Client. Work will normally be performed at the offices of Service Provider but may take place at other locations as required by Client. Work will normally occur between the hours of 9 AM to 5 PM, Monday through Friday. Unscheduled or emergency work performed outside of these hours will be billed at the rate of $ [After Hours Rate] per hour. Scheduled after hours work will be subject to the standard hourly rate. All scheduled after hours work must be scheduled a minimum of 7 days in advance.

Payment for these services will be made to Service Provider upon receipt of Service Provider invoice. A monthly invoice will be submitted to Client no later than the 5th of the month immediately following the month in which the work was performed.

All expenses exclusive of normal overhead are not included in this agreement and will be billed separately. Examples of such expenses are: delivery services, long distance telephone calls, and all expenses related to travel such as travel time, mileage, meals, and accommodations. All travel time to work locations other than Client office is billable. Mileage of more than 25 miles for travel to work sites will be submitted as an expense at the current IRS Standard Mileage Rate. All invoices are payable upon receipt.

All materials furnished by Client will remain the property of Client and will be returned upon request or upon termination of this agreement.

The results of any and all work performed by Service Provider for Client will remain the property of the Client. Client may use this material in any way deemed appropriate.

This agreement shall be subject to voluntary termination, without cause, by either party. Any rights to compensation or remuneration of any kind are to terminate at the time this agreement terminates.

Each party agrees to indemnify, defend, and hold harmless the other party from and against any loss, cost, or damage of any kind (including reasonable outside attorneys’ fees) to the extent arising out of its breach of this Agreement, and/or its negligence or willful misconduct.

Answer 4

This question might be a legal one: Can you bill them for hours not worked under this contract?

That aside, based on what you posted, it sounds like you are placed in a situation where they will give you work to do and expect you to do it and bill them for the time you spent on it. If there is no work, then they don't ask you to do anything, and you have that time "off", so to speak. Presumably you are not "on-call", i.e. if they call you and say you need to do something, then it doesn't need to be done immediately; you can schedule it amongst your other priorities as long as it is done in a reasonable time frame.

If this is the case, then I wouldn't bill them. You aren't working during the time you don't have work to do, and you are not expected to respond urgently to requests. Take that extra time and do what you want.

However, if you have a tight SLA (e.g. for 10 hours/week you have to be glued to your computer waiting for work to come in, and that's in your contract), then I would bill them all 10 hours. The difference is, if you are or are not able to use that extra time when you aren't working as your own time, or do you still have to keep up responsibilities to this company? Any time you are keeping up responsibilities to this company should be billable hours, even if it's not "work", so to speak. Any time you have no responsibilities to this company, are not billable.

Answer 5

Sometimes they need me to work, and some weeks they have nothing for me to do.

There is always something to do.

• Is the documentation 100% complete? Is there any more which you can review?

• Is the code 100% compiler warning free (if applicable)? Have you Linted it (static code analysis)?

• Are there enough unit tests (100% code coverage)? Software integration tests?

• Could the code be refactored?

• Do you have a continuous integration system, such as Jenkins?

• Are there any future projects you could acquaint yourself with?

Also, you don't state what happens if you need more than 10 hours in a given week – do invoice the extra?

Personally, I would treat it as a retainer. Look at it as them paying you (rather little, as you say), to be available should they need you.