While the need for subcontractors to supplement the staffing issues of the last few years (COVID-19, supply chain shortages, etc.) has become readily apparent, make no mistake, this is nothing new. Our industry, like many others, has its ups and downs—some seasonal, some based on spending patterns of various government entities—which cause serious fluctuations in income and the ability for many to make payroll.
I have seen and lived through the shortsightedness of way too many employers who cycle through such times by letting staff go. It usually starts with the installers and moves to the engineers. There are, of course, alternatives. Many companies opted these past years for mutual pay cuts rather than terminations (some voluntary, some mandatory) and, of course, reduced work hours. Kudos to them!
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So many of us who felt undervalued and poorly treated have opted to sell our services as independents, hence, the phrase “independent contractor.” I have seen the entire gamut of types of these services, from individuals to companies with a staff of independents to large, regional companies with full-time employees (yes, even with benefits) used as part of their independent services.
Before You Start
Agreements, now called contracts, are the norm. Years ago, it was much simpler. As a small independent, I would purchase my equipment from various stores, and sometimes they would need some help on an installation. The agreement, $300 for the day, would be to install this equipment on Tuesday—and that was it.
I remember many times the client’s customer would ask me if I could get equipment and install it for them for less. This was New York, and it seemed everyone was looking for a deal (even if it was unscrupulous). My answer was always the same: no. In fact, I would never even consider it, unless the customer called the seller and asked them if it was OK for me to work directly for them. I don't ever remember a customer making that call.
Today, depending on the size and shrewdness (can’t think of a better word I can put in print) of the company, they will likely ask you to sign something before you start. Ideally, the agreement(s) should be simple and balanced to reflect the interests of the integrator and subcontractor. Unfortunately, that is rarely the case.
Some of the agreements you may be asked to sign are:
• NDA: Non-Disclosure Agreement
• NCA: Non-Compete Agreement
• ICA: Independent Contractor Agreement
In addition, you may be asked to provide a Certificate of Insurance for liability, with the loss payee made out to the company that is hiring you. (That is a discussion for another day.)
Depending on the services you are going to perform, some companies will stress one over the other. For example, if you are working on site with the client as a project manager, they may be more concerned with an NDA, as you will be privy to how they do things, rather than an NCA.
Clause and Effect
NDAs that I have seen are often too many pages—and invade your privacy and intellectual property. For example, let’s say you are working on a project and come up with a great idea. Maybe you even get a patent for it. Most of these agreements have a clause that you are signing away 100% of your rights to that invention.
In my experience, most of these agreements are completely one-sided toward the company that hires you. Before you sign it, have a contract attorney review it to fully understand what you are signing, as well as what your liability is if they want to take action against you.
NCAs are also common and may contain language that is not even legal in your state. For example, in California (last I checked), they are not even enforceable. While I understand that exposing a subcontractor to a client has risks, and maybe a company has been burned in the past, a year or two is typical for contact by you to their client. More than that is often unenforceable.
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These agreements can also get extremely one-sided and excessive as far as penalties and costs if broken. Again, and I can't stress this enough, get a contract attorney from the state you are in and have them look it over, so you fully understand what you are signing.
ICAs typically include details and provisions as to the nature of your employment, such as duration, what you will be doing, rate of pay, when you will be paid, and even what to wear and how to act while on the job. Once again, make sure you understand what you're signing. There may be a clause (yes, I have seen this) where they do not pay you until they get paid—and if they do not get paid, you may have to wait 90 days or more to get paid. Let's all say it together: contract attorney.
Everything's Negotiable
This is an area that is often incredibly out of balance and can be negotiated. Yes, negotiated. Often, I have sent agreements back, with all the objectionable clauses crossed out. Some were so bad, I just could not sign them in good conscience. Often, the company is hiring you because they often have an immediate need. Stand up for yourself, and do not be afraid to object to anything that makes you feel uncomfortable.
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Another option is to have your own ICA that you have them sign. I do this often. It details the work I am going to do, how and when I get paid, what happens if there is an overage in the agreed amount of time, or if the client delays my ability to do the work, among other aspects. If you would like me to send you a copy, just send me an email.
One last thing to consider: Often, the person (maybe from HR) who sends you the agreement just sends them without reviewing them. More than once I have received a standard agreement saying I need $5 million in liability insurance for when I am on site. The problem, of course, is that I am working remotely—in a different state—on drawings. These agreements are supposed to be targeted for the type of services you provide, so make sure they are worded appropriately.
Doug Kleeger, CTS-D, DMC-E/S, XTP-E, KCD, is the founder of AudioVisual Consulting Services. Contact him with questions or comments at doug@avcs.us.
