1099 Contractor Guide
1099 contracting is an essential part of the Work Hard Pittsburgh ecosystem. Our digital and creative agency, WH Digital (WHDS) is the company housing this work. You can learn more about 1099 contract work from the IRS or this wiki.
The Basics
WHDS acts as a creative and technical agency solving problems for customers. Our customers are primarily from Allegheny County, but there are a few notable out-of-state brands. We leverage the Work Hard Pittsburgh Cooperative's philanthropic work, community goodwill and extended network to secure client work that falls in at least one of these categories:
- Brand and Design
- Business and Organizational Consulting
- Content Creation
- Digital Marketing
- Web and Application Development
We curate an extensive list of internal and external talent to complete this client work. Internal project and client managers oversee work. All projects use Asana for project management and track time tasks with Harvest.
Professional Expectations
- Complete tasks by their due dates.
- Show up on time at the designated job location.
- Deliver a quality work product on time.
- Do not consume alcohol or do drugs on the job.
- Communicate professionally across all channels including but not limited to email and RIOT.
Consequences
Project managers reserve the right to remove contractors for jobs. Removals may be temporary or permanent and are at the sole discretion of the WHDS management team. WHDS also reserves the right to withhold compensation for deliverable that do not meet a professional work standard. PC will be given an opportunity to correct unacceptable work product an no additional cost to WHDS. If PC is unable to deliver work product matching the client specification or of a professional standard, WHDS reserves the right to refuse payment. If PC's work is published or accepted by the client, payment will always be rendered.
Primary Contractor Agreement
The relationship between a 1099 contractor (also known as the Primary Contractor (PC)) and WHDS is governed by our Primary Contractor Agreement (PCA). This complicated document spells out our mutual rights and obligations and requires deep understanding by all parties. Please read this document before signing and seek clarifying answers from WHDS and your own independent legal counsel.
Generally, the PCA is broken down into the following sections:
Promises and Considerations
This section defines rights and obligations for both parties. Key issues like term, services provided, confidentiality, restricted covenants, and indemnification are addressed.
Pay Rates and Compensation
In most cases the following is true:
- Hourly compensation due to the PC is calculated by summing the regional average salary (as reported by Glassdoor) and the cost of healthcare, valued at $20,576.00 per year. A multiplier of 1.2 is then applied to the hourly rate to ensure that we are paying a fair and compelling living wage for work done.
- If the PC requires training to complete an assigned task, billing is done at junior rates. A 0.75 multiplier is applied to the compensation formula to calculate billable rate.
- Rates are negotiable under some circumstances, but generally adherence to WHDS's rate sheet helps ensure equitable wealth building for all of our PCs.
Subcontractor Agreement for Use by Primary Contractors
A PC can subcontract work product. This section of the PCA must be signed by any subcontractor working under a PC. Subcontractors may only use employees of their companies to complete work product. This is necessary to preserve the chain of custody of intellectual property that may be transferred up to a client.
Transfer of Intellectual Property Rights
Intellectual property rights of work product is carefully documented in our contract suite. Since many PCs work in creative media, documenting use and transfer of rights to the client is essential. This section of the PCA allows for specific exceptions to be made on work product created. By default, the contract suite associated with the PCA transfers all work product intellectual property rights to the client. So, if a PC wishes to retain the rights for a specific piece of work product in a specific use case, those changes need to be explicitly stated in the the Intellection Property Rights section of the PCA. Examples of this might include a photograph to be used only in print, or raw video footage held by the PC and not released to the client.
Work Order Modification Form
The PCA governs all work done by a PC for the term of the contract. Exceptions on specific work are allowed. We use the Work Order Modification Form to document changes in deliverables and pay rates on a case-by-case basis.
Rationale
WHPGH and its affiliates encourage 1099 Contracting for a few different reasons:
- WHPGH is a cooperatively organized business incubator. 1099 contract work extends the personal financial runaway of our entrepreneurs, allowing them to work longer on their personal businesses and projects.
- WHPGH, through its creative and technical agency WHDS, generates income from client work.
- We use 1099 contract work to develop junior talent or allow our cooperative members to get paid to learn a new skill.
- Our condensed technical training company, Academy Pittsburgh, places apprentices into WHDS via 1099 contracts to bridge the gap for participants of that program while they look for a full time job.