Old contract expired, new one has not yet been issued - should I keep working for them?

Question

I've worked without signing a work contract extension for about a month for a big software company. They have promised me an extension and a pay raise before the previous contract ended.

The time to make the invoice for the previous month has come and even if I asked them repeatedly for the new contract extension the contracting company said that the person who needed to provide me with the contract was in vacation. Now, after that person returned they're saying "the contract is currently being issued".

I really don't know what to believe because they don't have a very good impression about how I handled things in the past(although I did some good things too and I now know the project quite well) although they said at last contract extension that they want to keep me until the end of the year.

So in the end I cannot invoice them and I'm still continuing to work without a contract and the contracting company says "the contract is not issued yet".

What could I do in this situation? Should I just say I won't come tomorrow to work although that seems a bit aggressive it might backfire?

Thanks!

Answer 1

For legal contract advice, I would of course contact a lawyer who specializes in contract law. However, I sense that what you want isn't so much the legal but what to do to get the contract continued without making the client angry so that they turn you off entirely.

In your case this is what I would do. First present an invoice for the work you have done while not under contract. It sounds as if they knew you were continuing to work, so if they pay it, then you probably can continue to work. If you were working and they were not aware of that fact, then stop working immediately, there is a significantly lower chance you would get paid in that instance.

In writing, I would tell them that unless the invoice is paid, you cannot continue to work on the project until a new contract is paid. Be polite about it, but be firm. Set a date you must be paid by. If you have emails or other documentation that proves they asked you to work or were aware that you were working with the contract expired, I would attach them (also before you do this, save those to a location on your personal computer if they are on the company server as this will help you if this goes to court to get your money). Tell them that you are willing and would like to continue working on the project, but only if they can assure you in writing that the hours you work while not under contract will be paid for at the current rate. Be very neutral in the this first document. You are politely asking to be paid nothing more. I might also ask for an estimate of when the new contract is expected to be in place.

If they refuse to pay you, stop working until the contract is in place unless you negotiate with them that you will have a contract in place by x date and that all work in the meantime will be paid. If they cannot give you a date when you will be paid and the new contract in place, then start looking for a new contract with someone else. A company that doesn't respect your time and that doesn't want to pay for work they authorized is a company that you do not want to work for.

If they say they will pay you when the new contract is in place, then at least you have a written commitment that the hours you work will be paid and your chances of winning a court case are improved if they refuse to pay. At that point you might tell them that you can only continue without being paid until a particular date. After all you have bills to pay and need to have food and electricity and all that. If they would let you get overdue on your bills because someone is on vacation, then cut the cord and find a better gig.

If you feel you have to leave the project to find paying work as they keep delaying, then the only work you should do after making that decision is to get the project in shape to hand over (make sure changes are checked in and create documentation so they know where it stands and where to find things). Then you can leave like a professional which may help you later in your career as people remember when someone leaves badly and you never know when someone who works there might be a hiring officially at a different company in two or three years. It always pays to not leave an undecipherable mess behind not matter how angry you are.

Answer 2

Strictly (and legally) speaking, you should't be working at all if you don't have a contract in place. By this I mean - if your current work is not covered by a contract (current or past), you should stop working. If you have a contract that says that work will roll-on - that it will continue automatically on the same terms (and there is no later contract that doesn't have these words), then you do have a contract that covers your current work and you can invoice your client under normal terms (and there is no need to insist on an extension). If this is not the case - stop working at once (after explaining matters to your client).

Imagine that the client decides that they do not in fact want to issue another extension. If this happens, you don't have a leg to stand on if this ends up in a court - they can easily decide not to pay you for the time you have been working sans contract.

Cut your losses now - don't go in tomorrow. Don't go in until you have the extension in hand and the monies owed for the time you have worked in the bank. Explain matters to your client - you don't work for free and you don't work without the protection of a contract.

Use this time off to find yourself another contract elsewhere, in case the extension/money do not come in.

Answer 3

Writing a contract and signing it on both sides is not the only way to enter a contract. A valid contract can be created by the actions of both sides.

If your written contract ended last month, and you continue working, and nobody including people who would be the ones to give you a new contract complains about it sends you home, but instead gives you every impression that they want you to do the work, there is a factual contract.

Sure, you can turn up tomorrow morning and they can say that they don't want you to work for them anymore, but there is a real, existing contract for the days that you have worked and they need to pay you for the work. You can check Wikipedia's article on Implied-in-fact contracts. Because there's an implied contract, you should continue working.

Edit: The point is that the OP is right worrying about the implications of working without a contract, but in the right circumstances the fact that he keeps on working and isn't told to stop can actually create an unwritten contract. So he is not in fact working without a contract.

Answer 4

We too have had projects continue while waiting for contracts to be signed. It happens pretty often actually. In 18 years we have not had our clients not pay invoices nor have we ever not paid our subcontractors. You have emails to back up your discussions. I'd get them to acknowledge the hours worked (via email or a signed time reporting sheet) now. Even before you invoice for the month. This will ensure that everyone agrees to your hours worked and will be backup should there be questions in the future.

Answer 5

Any agreements that you may have which are not covered by a binding, valid and current contract are basically non-existent.

From the sounds of it, your client could potentially not pay you any of your money, and not face any legal recourse whatsoever.

That being said, in my experience, tech companies always pay. Even though you probably have no recourse, you could still sue them. Being sued is costly and time-consuming. Many companies have trouble getting funding while they are being sued.

You should have not worked at all without a contract in place. By doing so, you have put yourself in a very bad position, as you have only two options,

1) Stop working until you get the money that you are owed. Odds are if you stop working suddenly, you client is not going to love you for it and, if they are the sort who will withhold your payment, then they will withhold it.

2) Keep working with no contract, which is terrible, since the more money the client owes you, the better a position you are in.

I would say, like the previous answer suggested, send an e-mail asking for clarification on the contract and when you will be paid. If they put it in writing in an e-mail that they owe you money, they will probably be obligated to pay them.

Good luck!

Answer 6

Most contracts I have had included an opened ended work clause. This allowed continued work and payment for that work beyond the initial contract period unless one of the signed parties chooses to terminate with advanced notice. You may want to see if there is a similar clause in your contract. If so then bill out at the current rate.

It sounds like you intend to continue to work for this company under a new contract. If that is your desire then provoking a confrontation by refusing to work or forcing the issue of a raise for the month might be counter productive. You should have a point of contact for the contract. I would contact them and get the rate for your new contract and the effective period. If the period includes the time you have already worked ask the contact how to handle the current billing cycle. Chances are your contact has no reason to attempt to take money out of your pocket since it will not be going in thiers. So if the company intends to compensate you at the new rate then I suspect they will or after the contract is completed issue you a back pay check for the difference between the new rate and the original rate.

Worst case scenerio - The company decides not to compensate you for the time between when the original contract expired and the new contract is issued. You can make a decision if the time you spent is worth ruining the relationship with the company. You can probably prevail if you get an attorney and sue the company. But there is no guarantee. Or you can learn from this, eat the loss, and continue the business relationship. I think this is unlikely to happen but I would assume that it is a risk.