If I do a programming contract through an agency, what contract issues should I watch out for?

Question

Someone told me that if I sign a contract with an employment agency to do a programming gig, the agency can insert a clause that says essentially "until they get paid, I don't get paid".

This worries me because I could go several weeks before I even find out whether I'm going to get any money at all for the work I've done. This is the whole reason I wanted to work through an agency - to make sure I don't get stiffed by a client.

Are there any other contract gotchas I need to be aware of before I sign on the dotted line with an agency for a programming contract?

Answer 1

This is all U.S. specific, but some of the principles may apply to other locations.

I am not a lawyer, if you want to be really certain, consult a lawyer.

• That you might not get paid if the agency is not paid may be true if they pay you as a contractor. Some agencies like to hire contractors as W-2 employees which negates this type of clause. See if there's an option to choose. More on this below
• Make sure you get paid at regular, frequent intervals (e.g. every two weeks). If a payment is ever late, you call and say that you cannot continue until the check is in hand. Usually it's just an oversite. Be aware that you will usually get paid Net-30 meaning 30 days after you submit your invoices. This means if you bill on two week intervals, you will not get your first paycheck for up to 6 weeks. The upside is that after you leave, you will get paid for up to an additional 6 weeks while you secure another job!

Option 1: Contractor

• [minus] You take more risks about getting paid.
• [minus] You have to keep track of and pay your own taxes.
• [plus] You get to write-off your travel and lots more which means you will probably net more money in the end.

Option 2: Agency Employee

• [plus] They have to pay you under U.S. labor law.
• [plus] They have to pay you within two weeks.
• [minus] You don't get to write-off much from your taxes.