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So here's my situation. I've been under contract since March of 2015 (about nine months). It was supposed to be a six-month contract, but they simply extended it without telling me. I spoke with my boss and he said they loves the work I'm doing, and plan on hiring me in at my one year mark (March 2016).

Though it irritates me, I can live with it. My issue is that the company has a annual bonus given to its employees (about 10% of their salary), based on their performance. I'm on the IT team and I would say the work I do substantiates about 70% of our performance as an IT team overall. Since I'm a contract-to-hire, I would assume that I'm not eligible for this bonus, given out in January. Should I address my boss on this? A large component of the IT team's performance score is based on my work -- shouldn't I be rewarded too?

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    Nope you shouldn't be. It would be an unreasonable expectation. You are not their employee, you are a contractor. – HLGEM Dec 2 '15 at 18:48
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    You should probably re-read your contract. Since you're still there after the contract period, you may be in a good position to raise your rates. – Dan Pichelman Dec 2 '15 at 19:14
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    Presumably, if you let your employer retroactively adjust your hourly rate downwards to match the hourly rate of salaried employees, they might be interested in awarding a bonus :) Seriously though, you can't expect to receive the benefits of being a contractor and the benefits of being salaried at the same time. – Laconic Droid Dec 2 '15 at 21:23
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    Hold on... they extended your contract without telling you? Something sounds fishy there. You need to double check that things are kosher there as you could currently be working without a contract which opens you up to a host of issues (ie they could just stop paying you and there is little you can do about it). – Reinstate Monica Dec 3 '15 at 3:56
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    I agree with David Grinberg, you REALLY need to check this out, as far as I am aware in most countries there's no way to one-sidedly extend a contract unless both parties have agreed on that being an option beforehand. – Cronax Dec 3 '15 at 8:38
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You are being rewarded. You are being rewarded with exactly what you agreed to, i.e. a certain amount of money for doing a certain amount of work.

Meanwhile your permanent colleagues are being rewarded with what they agreed to: a certain amount of salary, some benefits, and a bonus dependent on their performance.

Joking aside, this is absolutely normal and the way contracts are done. Permanent employees get benefits like paid vacation, healthcare and bonuses. Contract employees get (usually) higher hourly rates, pay by the hour, and the ability to renegotiate their rate every year.

If you feel your rewards are too low you can renegotiate your rate.

  • Good answer, except renegotiating rate. The time to negotiate is at the point of conversion to employee. – Aaron Hall Dec 2 '15 at 22:51
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    Also, as a contractor, you should earn more than the permanent employees. If you don't then, you didn't negotiate well. – dyesdyes Dec 3 '15 at 0:27
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    @AaronHall Actually, the time to negotiate was when the contract was extended, but since that seems to have happened without the OP's consent there's an issue there. – Cronax Dec 3 '15 at 8:48
  • @Cronax it wasn't extended without his consent, if he was notified and continued working then he implicitly gave consent, if he wasn't notifed then new terms don't apply. If it becomes a rolling contract, that isn't in increments of the original contract length, he could simply give the normal notice and end it. However none of this obliges the employer to make him a permanent employee unless that was in his contract. – JamesRyan Dec 3 '15 at 11:58
  • @JamesRyan I'd hazard a guess that this may depend on local law, as far as I am aware in my country it's not possible to extend a contract automatically unless the contract itself states that this is explicitly agreed upon. – Cronax Dec 3 '15 at 15:54
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Have an honest conversation with your boss about it. Be respectful and open, not demanding, frustrated, or otherwise upset. Simply inquire about how it will all work:

Hey, boss. I'm glad you guys are happy with my work - I can't wait to sign on as a full time employee come March. I wanted to ask you about my status until then, however. I know that at the end of the year employees typically receive a bonus. As a soon to be salaried employee, will I be considered for such a bonus?

I'll be honest with you: his answer will most likely be no. I know it's easier said than done, but if this is the case you can't let it upset you. Look at it like this: If your contract had merely been extended for another 6 months you would not have expected a bonus, and this conversation would not have taken place at all.

The reason you feel like you should be entitled to one is because you know you will soon be a full-time employee. However, legally - which is really the only aspect that matters - you are still only a contract worker.

Don't spoil your chances of becoming a full time employee by showing bitterness, or making a big deal out of this situation. Simply keep in mind that starting 2017 you too will be receiving a bonus.

Note: Btw, I'm in a very similar situation. I started work a couple of months after the yearly bonuses were handed out. Since only employees that have been with the company >1yr receive them, I will not be receiving anything, while all my team mates will be getting thousands on dollars just before the holidays. Am I bitter? YES. Am I showing it? Suffice to say that if anyone comments on it I'm the first one to point out that I never expected one, and it all seems fair to me.

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    @JohnR.Strohm -The OP never said that he had been promised a full time position at the end of the first 6 months - only that it was extended. My understanding was that they could have let him go, but chose to extend the contract with the intention of hiring him full time at a later date. Either way though, the only way to find out about the bonus is to ask. Making a stink about it is not going to win him any points, politically, and it sure as hell isn't going to get him the money. – AndreiROM Dec 2 '15 at 19:39
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    his question title says "contract to hire". My comment, since deleted, focused on that aspect. I deleted it after re-reading his text, which does not include the "to hire" part. If he is straight-up contract, not contract-to-hire, then you are correct. If he was brought in on contract-to-hire, then the situation is very different. (There are several reasons why I will not touch contract-to-hire positions. Things like this are among them.) – John R. Strohm Dec 2 '15 at 19:52
  • @JohnR.Strohm - All good, no worries. Were not always provided the full picture on this site, so it's always a good idea for people to post their opinion in case it helps some other reader one day. – AndreiROM Dec 2 '15 at 20:01
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Since I'm a contract to hire, I would assume that I'm not eligible for this yearly bonus given out in January.

I think your assumption is correct.

Should I address to my boss about this? I mean, I'm putting towards a large percent of the IT team performance score based on my work, shouldn't I be rewarded too?

Everywhere I have ever worked dealt with contractors differently than with employees. No contractors ever got bonuses at any of those shops.

You could certainly ask. And if your boss is feeling particularly generous, he may do something for you.

But don't be surprised if he doesn't. In the US, there are rules about treating contractors as employees - basically it isn't allowed. Even companies like Microsoft have run afoul of the rules, and paid the price to the IRS. Many shops thus deny almost all benefits and perks from contractors. Its safer that way.

You may be better off pushing to get hired sooner rather than later, based on the efforts you are expending.

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If you want more money and feel that your performance justifies it, renegotiate your contract. A promise of full employment in another 4 months doesn't 'really' guarantee anything.

If you're on contract I would assume that you're are already making substantially more than your colleagues. In my experience you should be getting more than 10% in any case. Check out as far as you can exactly how much the difference is. Because you might find you're stabbing yourself in the foot by asking for more if you're already making more.

Realistically if a company had me for 6 months and still couldn't decide to take me on full time after that contract, I would take a hard look at finding other work rather than getting excited about another 6 months in limbo in the hope of landing a full time position. So in my personal case I'd be wanting to renegotiate the contract rather than trying to land a bonus I'm not entitled to.

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Here's probably the most reasonable thing to consider. When the six months elapsed, or was about to, did you ask what was going on?? Or did you assume they'd take care of transitioning you, and just let you know whenever it was to take place? Since you didn't specify, it seems that the latter case applies.

If you didn't ask about getting transitioned to perm, you can't be upset with missing that bonus money as a result. What is a priority to you isn't necessarily one to your management, especially if you're putting out good work and other pressing matters are at hand.

The closed mouth won't get fed!

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You don't say what country you are in. I'm in the UK, and this applies here.

In terms of "extending without telling you", by allowing you to continue to show up for work, they are telling you they are happy to continue on the same basis (unless extending the contract on different terms was written into the original contract). By continuing to show up, you are saying you are also happy with that.

In England the courts will say that there is an "implied variation" of the original contract, i.e. that both parties have implicitly agreed to change the end date of the contract. The rest of the contract applies, (with any necessary changes implied by the changed end date).

About your bonus. The position of an independent contractor is different to that of an employee. They pay you more because they value the flexibility of being able to get rid of you if they no longer need your special skills. You become a contractor because you have confidence in your marketability and don't wish to trade lower rates for job security.

Employees on the other hand receive bonuses on complex vesting and claw-back schemes where they may be awarded a bonus in July, but won't recieve it until December, but if they leave before next July they must repay it, by which time their next bonus is announced...

If you feel you are worth 10% more money, you should simply tell them that. Say "I am really happy to continue working for you on the same basis, but what with the market position and cost of living, I have to put up my rates by 10% starting next month". or: "I really enjoy working here, but I need charge a rate which is closer to what I could get elsewhere".

The crucial points when negotiating are:

  • What is the value to the client of the work you are doing? If getting the job done costs more than the value it provides, they will simply hire nobody to do the job, and the job will not be done.

  • What would it cost them to hire somebody else? If they can get the job done for less by somebody else (i.e. taking into account productivity) they will.

Both those factors create a maximum you can charge, so you can't really ask for more than the lower of those two. In reality the second factor - market rates - is likely to be the crucial one. As an independent contractor you should always know what the market rate is. In the UK you can trawl JobServe to get a good idea what the market rate for any skill is - and also what skills it might be worth learning!

  • Good informative answer – Kilisi Dec 3 '15 at 12:06

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