Getting ripped off working freelance, what to do?

#1JigawatyPosted 5/2/2012 4:03:09 PM
Wonder if you guys know anything about business and how it's managed in regards to developers.

So I'm currently a freelancer developer while I am looking for a full time job. I've had this job for just three months and I noticed, the amounts I get paid for work are seriously out of whack. It all has to do with the fact that I do not set the rates (which is uncommon for freelance), my employer does. Just to be clear I live in the US.

You see, they usually GREATLY underestimate the time needed to get a project done, so I get paid according to that estimation. And I cannot bargain or argue over the budget. For example my last project took me 14 hours to complete, before I started my boss's estimate to the client was 8 hours and they billed for that. That is less that 60% of my work actually being paid for. So sometimes the pay is almost right for the market value and in extreme cases, the hourly rate comes down to less than minimum wage (I spend triple the time that my boss thought would get the job done). Their excuse is that I need to work faster. WTF... It doesn't matter if they felt I was working too slowly, a developer should not get paid that little.

I do not know how I should really hammer it into him that they need to take the typical market value for a developer such as myself into consideration. I want to negotiate a fair salary that does not rip them apart either because this is the only job I have. How do I start taking control over the payment situation?
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#2OrangeWizardPosted 5/2/2012 4:13:27 PM
How do I start taking control over the payment situation?

Start negotiating or quit.
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#3Skel1Posted 5/2/2012 4:18:13 PM
That's not freelancing. I suggest demanding what you're worth and finding something else. If you are worth more than where you're at, YOU are the ONLY person that can change that.

Just to be clear, you are not a freelancer. You're contracting out, but you are not a freelancer in this situation.
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#4Skel1Posted 5/2/2012 4:22:33 PM
I feel like I have to be very clear here:

If you're in the US, you can walk in almost any court, tell them your situation, and they will have to give you employee benefits depending on the size of their company. If they are controlling the price and telling you what to do and when to do it, they are, in the eyes of the law, your employer. If they ever tell you to work certain hours, in the eyes of the law, they are your employer. From what I understand even written agreements will typically be over ruled by this law. I wouldn't be surprised if it's because it's related to taxes.

That's my layman knowledge of the subject. They are whipping you like their **** and you're just taking it like a nice person.

Meanwhile you hurt the market for other developers who do charge their market value.
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#5ReconditePhreakPosted 5/2/2012 5:54:52 PM
Jigawaty, you're being taken for a ride.

What you're describing is called fixed bid. It's a matter of risk vs reward. In a fixed bid scenario, if you do the work faster, you get paid more, if you do it slower, you get paid less (per hour).

You have a risk distribution problem here. They're setting the price, but you're taking the risk by yourself. If they bid well, meaning, you finish it early, they get the increased pay. If they bid incorrectly, meaning, you finish it late, you get paid less, they get paid the same.

As far as I'm concerned, this is unethical, and you are clearly being taken advantage of. They're purposefully getting free man hours out of you. I also agree with skel, I think if this went to court, you'd have a field day with them. OTOH, I'm not a lawyer (neither is skel), and we don't know all of the details (there's always 2 sides to a story). DO NOT TRUST US. And don't assume we're correct, we're probably not.

As for what to do, it really depends on your situation. If you're interested in trying to resolve this, find out who is doing the bidding and invite them to lunch. In the meantime, work on actually becoming a freelancer (skel is right, you're not freelancing), or find a more honest employer.

If you can afford to simply walk away from the work, then consider walking away from the work. Or if you want to be a hardass, the next time they bill for 8 hours, work 8 hours. At the end of those 8 hours, send them what you have along with an estimate of how much time you think is left in the project. Push the risk back onto them, and let them explain to the customer why the project isn't finished.

But whatever you do, don't let the situation stay as it is.
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#6Jigawaty(Topic Creator)Posted 5/2/2012 6:16:18 PM
The executive manager does not want me to set hourly rates because they do not trust my past history. I lost two jobs in 1 year, one due to the company "rebuilding" and was cut from the pack, and the other because of something similar, they just found someone else that could do the job better than me. So that past went to bite me in the ass now putting me in this awful position.

ReconditePhreak, you're exactly right. They feel safer doing everything fixed cost. It is definitely tipped much more in their favor, and I want to balance it out without making them feel compromised. I'm no stranger to freelancing, over a year ago I charged $20 for a short term project they were happy with, and they didn't need me anymore so we went our separate ways.

Skel1, there is no written contract between me and the employer. He just tells me what needs to get done, and how long it should take, I tell him when it's done so I can get paid. There are no hard deadlines with most of these projects. If he says that I can finish something by next Thursday it doesn't necessarily mean the client is waiting for it next Thursday. I can finish later than that but the pay doesn't change.

The truth is I can bail out whenever I choose to but underemployed people such as myself cannot pick their own jobs. But I also understand why this would not be really considered freelance under my circumstances.
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"Next person who says 'porkulus package' is getting banned." -Zircon
#7OrangeWizardPosted 5/2/2012 8:09:14 PM

From: Jigawaty | #006
I lost two jobs in 1 year, one due to the company "rebuilding" and was cut from the pack, and the other because of something similar, they just found someone else that could do the job better than me.


Why don't they understand this? I mean, they're people, right? Your history wasn't just fed through a machine and you were put on the "Cannot hold a job" list, right?

I charged $20 for a short term project


Well criminy, what did you make for them, a VB GUI that calculates interest or something? It better not have taken more than an hour to make.
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"this game is about reality. ... when you fire a gun you are not like "what is this am i shooting sausages?""
-General_Dong on Black Ops
#8ReconditePhreakPosted 5/3/2012 5:06:19 AM
Ultimately, in a situation like this, they can only take advantage of you if you let them. Yes, the economy sucks, yes, you're in a bad position. But every hour you spend working for them is an hour you can't spend working for yourself, or for someone else.

I don't even know why you made this thread. This board is full of goal oriented people who are paid to solve problems. You present us with a problem, we're going to start giving you possible solutions. What we're not going to do is tell you how horribly trod upon you are and give you our sympathy as a fellow human being. If you want that, go find a woman.

Does that seem harsh? No more harsh than staying in a bad situation in which you have the control to end. Whatever you do, stop wasting our time.
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Believes the individuals who report to moderators wish they had more control than they do.
#9Jigawaty(Topic Creator)Posted 5/3/2012 12:26:15 PM
Don't worry guys, I don't need pity. Honestly you guys helped, I have a better understanding to what I can tell my boss. The fixed bid setup is way too risky for me and I am starting to think if he can actually afford me with what I typically charge. He is probably lowballing the clients as well.

I do not work close to full-time so I am not going to ask for benefits. Just gonna hold my ground, tell him my demands and goals (if they won't pay me by the hour I expect $xyz each week) and milk this job as much as I can. Just gotta figure out how can negotiate and make it hell on them without getting myself fired in the process.

Well criminy, what did you make for them, a VB GUI that calculates interest or something? It better not have taken more than an hour to make.

Oops, I left a glaring omission there. I charged $20 per hour, not for the entire project.
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"Next person who says 'porkulus package' is getting banned." -Zircon
#10CC RicersPosted 5/3/2012 12:48:58 PM
They are whipping you like their **** and you're just taking it like a nice person.

Sounds about right. It's a slave labor mentality of "those who work the fastest get the most help/benefits".
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