Transition from employee to consultant--any gotchas?

[Dick Margulis <margulisd -at- comcast -dot- net>]

My employer terminated me yesterday as part of a 
we-hope-we-can-still-hang-on-until-things-turn-around deperate last cut. 
They have asked me to continue performing a subset of my former duties 
as a consultant, with the understanding that I'm going to look for a 
full-time job and may end up being barred from moonlighting for them if 
I get one.

In the meantime, here's the tentative arrangement, about which I have 
questions:

1. They're giving me severance of a few weeks' pay, to be paid in 
biweekly instalments. My understanding is that this probably will 
prevent my collecting unemployment benefits until I've received the last 
installment. Not a problem. However, I don't think this prevents me from 
entering into a contract with the company effective today.

2. They're selling me, for a dollar, the old equipment and software 
licenses that were on loan to me at home so that I could telecommute. 
That way I'll own my production tools, helping me satisfy the IRS 
requirements for independent contractors. (The depreciated value is 
zero, so they make a profit at a dollar.)

3. So that I can effectively do the tasks they want me to do, they are 
leaving me connected to the company network through VPN and are leaving 
my email account on.

4. I am free to use the equipment I will now own (after they look up the 
serial number to ensure it's the company's to sell, not leased 
equipment) to sell my services to other companies, without restriction 
(and if you have any leads, hey, I ain't proud).

5. They will pay me a fixed retainer, billed in advance, for up to a 
certain number of hours of work per month and a (higher) hourly rate for 
any additional hours needed to complete projects. Numbers are TBD, as we 
haven't started negotiating yet.

6. Outside of routine tasks, which I will clock in aggregate and charge 
as total hours, any separate project assignment will be governed by a 
signed statement of work, with its own separate schedule, time 
estimates, and conditions of acceptance.

7. I'm retaining copyright of all works produced until the corresponding 
invoice is paid in full, and I'm retaining a perpetual license to use 
non-confidential works in my professional portfolio.

So, folks, what have I overlooked? Do you think this will pass muster 
with the IRS regarding contractor status (I can cook up a business name 
if that helps)? Is there anything about the severance arrangement that 
would prohibit me from beginning immediately to do billable work?

I know you guys aren't lawyers (at least most of you aren't), and at 
some point I'll probably have to involve one. But if you have any 
suggestions for improving this plan before I present it to a lawyer, I'd 
like to hear them.

Thanks,

Dick


^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

ROBOHELP X5: Featuring Word 2003 support, Content Management, Multi-Author
support, PDF and XML support and much more!
TRY IT TODAY at http://www.macromedia.com/go/techwrl

WEBWORKS FINALDRAFT: New! Document review system for Word and FrameMaker
authors. Automatic browser-based drafts with unlimited reviewers. Full
online discussions -- no Web server needed! http://www.webworks.com/techwr-l 

---
You are currently subscribed to techwr-l as:
archiver -at- techwr-l -dot- com
To unsubscribe send a blank email to leave-techwr-l-obscured -at- lists -dot- raycomm -dot- com
Send administrative questions to ejray -at- raycomm -dot- com -dot-  Visit
http://www.raycomm.com/techwhirl/ for more resources and info.