THE DIGGER is BACK!

[BAJR Host]

Quick comment though ... much of this should be on the Digger site... as we should remain more general here.

AUP and all that! :face-confused:

http://www.thedigger.org

I will set up some sort of feed to it, so we can see when teh digger says something!!
easier than me checking every day!

[chiz]

thanks for your breakdown David, although you still haven't identified that we are not comparing like for like between the day rate and the employee wage. I'm sure though that how you break it down is how the company in question worked out their rates.
If you work as a freelancer you should treat costs as just that, otherwise I imagine the taxman would be rather interested. What you describe is someone working for a company and covering all their own costs but not putting these down as costs. I imagine the taxman would be rather interested in that too, especially if only working for one employer. So travel, accomodation, memberships, bank charges, accountant/legal advice, buying equipment (you do need some tools, some units demand all tools, and some units say all your own permatrace etc too!, even when doing labour-only), time lost to do accounts and fill tax returns, unpaid time dealing with contracts and trying to get work, phone bills, web hosting. It all adds up. It is not like for like. That is why the IFA paper estimated a day rate at about ?200 a day to get an income of c?20,000 a year.

[drpeterwardle]

Tax is complicated. There are costs to self employment, there are only a limited number of days that can be worked per year. There are complexities about what is and is not proper self employment. But please be realistic.

For example accounts take 1.5 hours per quarter to do.

Bank Charges - for this level of turnover why are you bothering with a business account. In any event say six transactions a month. (Pay In pay out NI petty cash at 50p per transaction ?3 per month) ?36 per year).
Insurance ?300 a year
PPE ?100 a year
Memberships ?200 a year


All these expenses are deducted from your profit. Profit is the difference between income and expenditure. For accommodation therefore (I think as this does not affect me) the cost of the accommodation is an expense and the payment you receive for it is income. In any event the tax situation for accommodation is going to be different for somebody who is self employed to somebody that is not. (David why not check this with the revenue).

I would also note that what is included in the day rate is important is it labour only.

The IFA figures are important as they give a clue as to why people are paid so badly in archaeology. We can debate how many days a self employed person can work a year (I have worked 27 days this month) but lets say it is between 200 to 220 days a year at the IFA charge rate of ?200 per day that gives a turnover of 40-44k to give a wage of 20k a year so that is overheads of 20k-24k. This is also for a specialist not somebody on site so there will be higher overheads for the specialist but not 24k worth.

There is a simple point high overheads mean low wages. Every time there is a demand for more training, more holiday more what ever it means lower wages. Everything has to be paid for.

Chiz says ?you may have to pay tax in advance?. No you don?t as self employed you complete a tax form in January for the previous year and you pay an advance for the next tax year ie the current tax year. So in effect you are always paying in arrears. You also have the benefit on the interest on the tax between the time earned and when the tax is due (the exception being if you have a very good year followed by a bad year when you will pay too much tax and have to reclaim it later).

Peter

[chiz]

The issue here is that there is a fundamental difference between the wage received as an employee (a proportion of the total fee received by the employer from the client), and the fee received by a self-employed freelancer (all the money they will ever get from this contract). As an employee you receive a wage, and essentially all you have to do, having got the job, is supply some bank details and turn up and do your job. You will be paid (nearly always!!) within a month/six weeks. To a greater extent everything is sorted for you by the employer. You receive benefits such as sick pay, compassionate leave, paid leave, training, away subs and pension subs as part of your package. That is why diggers often grumble about the disparity betweeen what they are charged out at, and their pay.
As a freelancer you not only have to go out and win the contract, you have to research the tax/NI situation, sort all the admin yourself (and it takes me rather more than 1.5 hours a quarter), and essentially do everything yourself, and pay for it either in time or in cash. You have to pay for everything out of that fee. You are running a business, you do not have the same overheads as a big business, but they still exist. Freelance work carries more risk, responsibility and costs than employed work, and you may not get paid for far longer than in employment, whilst having to pay expenses and costs up front. That is why freelancers are expected to be paid more than employees.
It seems likely that the unit in question has calculated their base level fee by fairly simply converting the pay minima into a day rate. It is obvious that this is a flawed conversion.*
The recession has hit archaeology hard, and there are hundreds of experienced diggers, and new graduates, looking for work. Most will not have any experience of freelance work before, and be aware of all the costs and potential pitfalls. The apparent desperation of the person who said they would try and avoid tax indicates how bad it has got. I think The Digger is right to highlight a few issues, and warn of potential problems. I was meant to have been helping write a Guide to Self-employment for BAJR which I wanted to then get checked by a professional tax/employment advisor. Unfortunately I haven?t had a chance, I think this all highlights that it might be needed. Although Peter will obviously doubt whether I am the right person to contribute.
On the specific point of The Digger, I am glad to see it return, although only if it fully researches all its scoops and isn?t just an extension of the often unsubstantiated rumour and speculation that exists at all levels in archaeology (and every other profession). I hope that the ease of sticking words up on a blog does not lead to dodgy reporting, and that time is taken to research any stories. It is often difficult though to get all the info, until a story has been ?broken? and it will be interesting to see how the blog format can carry stories forward.
As I said, I hope all facts have been checked (the advert is still on the web as of this morning), that the unit has been contacted to get their perspective, and that the IFA were at least asked to comment. I know that they are looking into related issues, so hopefully some guidance may be forthcoming soon. Unfortunately the highly individual nature of freelancing means it will probably never be possible to put a nice neat comparator between say the PIfA employee minima and a PIfA freelance minima, but it is clear that the rates offered here are not good.

*Peter?s point that there is a pay range up to ?85 a day is a good one, it would be good to see whether these upper levels are given out for PIfA level jobs. The advert clearly states that they want Field Supervisors ?an AifA level post surely? And it would be logical to assume that the higher rate is for such posts. Also on at least one occasion recently site jobs have been advertised with wide pay ranges ?dependant on experience?, however in every case the applicants got the bottom figure, despite decades of relevant experience!

edited as I said the name of the unit! D'Oh!

[BAJR Host]

Thank goodness for edits!

I often wonder about the dependant of exp.. and would love to hear from anyone who has been put on a higher rate due to experience.! ANYONE.....Hello?

[RedEarth]

On an related point - how are sole traders/one man bands affected by IfA guidelines on minimum pay? Given that you could charge whatever you like how would the IfA even know?

[kevin wooldridge]

I often wonder about the dependant of exp.. and would love to hear from anyone who has been put on a higher rate due to experience.!

Yes I can count myself as one of those folk. Not every job I have ever done, but quite a few. Unfortunately the AUP does not allow me to name names.....but I would be happy to if asked. Maybe David I could send you a private message with the names of employers that have paid a higher rate....

I often find myself with a number of weeks free time between contracts, when I would like to work, but don't have the possibility of committing to either a long-term project or the inevitable delays that sometimes happen in obtaining post-excavation funding. So I answer adverts, normally positions advertised at excavator level, explain my situation and see what the response is. Quite often employers seem grateful for the input of experience particularly at the beginning of projects, even if it is only for a short time and not the whole length of the project...

[BAJR Host]

I would indeed, would indeed. perhaps though this is one for the Digger... they can have a look at who gets what.... and who plays fair. editor@thedigger.org :face-confused:

[BAJR Host]

editor@thedigger.org

[BAJR Host]

As I said, I hope all facts have been checked (the advert is still on the web as of this morning), that the unit has been contacted to get their perspective, and that the IFA were at least asked to comment. I know that they are looking into related issues, so hopefully some guidance may be forthcoming soon.

I really should have an RSS feed to see if there are any new posts... off to check!