What is contract-to-hire?

Contract-to-hire is a clause in the consulting contract where the end-client has the option to make
a permanent offer to the consultant.

Typically the fee of executing this right is specified before hand. This fee is about 10-20% of the
consultant's gross salary.

In case the contract employee has worked for a while, the hiring fee is discounted because the
consulting firm has already earned revenues on the hourly rate. So the typical contract-to-hire
rate varies as follows:

If the contractor is hired within 3 months: 10-20% of Gross Salary, If the contractor is hired within
6 months: 10-15 % of Gross Salary, If the contractor is hired within 9 months: 5-10% of Gross
Salary, If the contractor is hired within 12 months: 0 or 5% of Gross Salary.

What are the different types of projects?

• On-site project: An On-site project is a project undertaken at the customer's site. All
facilities belong to the customer. The consulting company supplies the team.

• Offshore project: An offshore project is executed overseas in countries where the cost
of labor is much lower.

• In-house project: An in-house project is executed inside the facilities of the consulting
firm rather than at the client's site.

• Fixed costs project: A Fixed Costs project is where the total cost of the project is fixed.
The consulting firm has to complete the project within the given budget. This could be
on-site, in-house or an offshore project.

• Time and Material Project: Time and Material Project have no fixed time period.
Consulting companies charge on an hourly basis.

What are the Advantages of Contract Employment over Permanent Employment?

• Opportunity to work with multiple employers and technology.

• Continuity with the employer though on-site locations could change.

• Low risk of being laid-off.

• Higher salaries in comparison to direct employers.

• Closer access to decision-makers and better negotiating power.

What are the Disadvantages of Contract Employment over Permanent Employment?

 • Need to change projects every three to six months.

• Stress of relocating.

• Greater disadvantage if married and if children are going to local schools.

• No security that large firms offer.

What is continuity in an H-1B? Why is continuity important?

Many consultants are eager to join a large US corporation in what they refer to as a permanent
position rather than a contract position. In reality, no job is permanent in the US. Layoffs are
common and getting fired from the job can happen any Monday morning.

An H-1B employee is fundamentally a temporary foreign worker till he gets a Green Card to
stay on in the country.

Green Card applications take between 2-4 years. In case of layoff before getting the Green
Card, consultants lose all the time they waited while their application was being processed. This
means they would have to find a new employer and start the process all over.

Lay-offs are usually characteristic of development firms and not consulting firms. If your project
ends in one site, the firm can find you another project. With contract industry getting more
popular, it is rare for a consulting company to go out of business.

What is a Bench Policy?

Derived like many American words from sports, bench refers to consultants who are on the
payroll but not on a client-site.

This typically happens in 2 situations. First when the consultant enters the US. He may not be
employed from the first day itself and the employers customarily pay a nominal stipend in cash
and provide an apartment.

Second, the consultant may find himself temporarily out of work in between projects - and
hence on the bench again. Now the employers normally pay the full salary.

What is a passthrough consultant?

 A passthrough situation is when the consultant and end-client would like to work together but
there are policies within the end-client's company, which do not allow it. This may be because
the end-clients neither sponsor H-1Bs, nor work with independent consultants directly but work
only through their preferred vendors.

In this situation, the consultant, whether on an H-1B or on a W-2 status or 1099 requires a
consulting firm in between him and the end-client.

As the consultant arranged the contract himself, the consulting firm is usually content with
making a nominal margin of around $ 5 per hour.

Why can't US companies interview while the consultant is in his home country?

Companies prefer to work with consultants who are US citizens or Green Card holders, as then
they do not have to go through the hassles of entering elaborate contracts with consulting firms.

Companies may also prefer working with consultants who have experience in working in the US
as no orientation to the US corporate culture would be required.

Most of the contract requirements are urgent in nature. For this reason, most employers first
prefer consultants in their own vicinity. This saves the employer both time and money. It also
saves the consultant the need to relocate.

1099s and Taxes

When a person is paid on the form, 1099-misc, all money earned by the individual is paid on an
untaxed basis. It is then the responsibility of the individual to file and pay the appropriate taxes.
These taxes can be owed to Federal, State and Local governments. Workers compensation and
unemployment issues also must be addressed independently.

W-2s and Taxes

When a person is paid on the form W-2, the employer automatically withholds and pays all of the
necessary employee income taxes as required by the IRS. These taxes include: Federal Income
Tax, State Income Tax, and FICA (Social Security and Medicare). In addition, the employer will
pay all of the necessary employer taxes. These taxes include: FICA (Social Security and
Medicare), FUTA (Federal Unemployment Tax), and SUI (State Unemployment Tax).

The IRS and Taxes

In recent years, the IRS has begun to realize the large sums of potential tax revenue they are
losing due to misclassified 1099 independent contractors who should legally be W-2 employees.
When a company pays a contractor on a 1099-misc form, they avoid the following: federal and
state tax withholdings, deposits and reports, the employer’s share of Social Security and
Medicare taxes, state and federal unemployment insurance premiums, state disability insurance
premiums, Workers’ Compensation costs, fringe benefits, vicarious liability for employee
negligence, and EEOC regulations. The IRS estimates that it loses between $4 to $20 billion per
year in unpaid taxes as a result of this misclassification problem. Understandably, the IRS has
made it a priority to investigate 1099-misc forms that are turned in at the end of the tax year. The
IRS is continually conducting audits to determine whether or not contractors are being properly
classified.

Agreement: Fee schedule between the recruiter and client company covering the fee due, if the
contractor is hired permanently by client company. You should have a conversion fee agreement
for each and every contracting placement. The financial details of every placement are different,
so you will need a separate agreement for each contractor you place to protect yourself.

Alternative Staffing: Another term for "Contingent Staffing," includes all nontraditional work
arrangements other than direct full-time employment, including: contractors, temporaries,
consultants, self-employed, independent contractors and part-time workers.

Back-Office: A qualified back-office supports the front-office by handling all of the administrative
duties and payroll functions of a contract placement. Administrative duties includes all the legal
contracts, insurance requirements, employee forms, paperwork, etc. The payroll functions include
all funding, taxes, unemployment, workers’ compensation, etc.

Buy-out Agreement: See "Conversion Fee Agreement."

Candidate: Person to potentially fill a job opening. Usually refers to an applicant who has been
qualified for the position and submitted to the client company (may then be known as a
"submittal"). In contracting, after the candidate is placed they become the "Contractor."

Clerical: The largest segment of the temporary help industry. Refers to secretaries, typists, word
processors, general office clerks, data entry, and other low-level office personnel.

Client Company: Company receiving services from "Contractors" who are employees of a
"Staffing Company."

COBRA: Legislation enacted in 1986 requiring employers with more than 20 employees to offer
continuation of health care coverage in the event that an employee is terminated or experiences a
qualifying life event. The employer taking tax deduction benefits for sponsoring employee benefits
is the employer to look to for COBRA obligations, as legislation is part of the ERISA tax law.

Co-employment: The employment relationship where two or more legally separated employers
share potential or actual employer responsibilities with a common employee[s].

Common-law Rules: Defined as "the law of a country or state, based on custom, usage and the
decisions and opinions of law courts." Common-law rules are traditional tests that are applied to
determine an employee or independent contractor status. A "common-law employer," is an
employer who possesses the right to direct and control an employee as to the final results and as
to the details of when, where, and how the work is to be done.

Contingent Staffing: Flexible supply of labor to support a core of permanent employees in

peripheral, non-core functions and during periods of increased demand.

Contingent Workers: Includes all nontraditional work arrangements other than direct full-time
employment, workers including: contractors, temporaries, consultants, self-employed,
independent contractors, and part-time workers.
Contracting: Triangular employment relationship where a "Staffing Company" supplies
"Contractors" to a "Client Company" for a specific function and time period, at a specified hourly
rate.

Contractor: Employee of "Staffing Company" who provides services to a "Client Company"

under the day-to-day supervision of the client.

Conversion Fee: Placement fee earned by the recruiter when contractor is hired permanently by
client company. Conversion fee is in addition to the hourly fee earned during the term of the
contract.

Core Employees: Permanent, "traditional" employees who have the critical skills necessary for
an organization's continued existence. These employees guide the company's strategies for the
future. Core employees are surrounded by a flexible ring of contingent workers who handle non-
core work.

Downsizing: Movement in Corporate America to reduce costs and become more competitive;
reducing headcount to lower fixed costs.

Employee Benefits: An indirect form of employee compensation, in addition to wages. Some

employee benefits are mandated by law. These include social security, unemployment, and
workers compensation. Other employee benefits are sponsored voluntarily by employers. It is
usual to talk about health-care, life insurance, retirement, or other welfare benefits in this context.

Employee Leasing: The term employee leasing for the service industry has come to mean a
business service whereby a firm specializing in payroll accounting, personnel management,
employee benefit, and risk administration, offers its skills and expertise to the subscribing
business. The long-term, regular dedicated employees of the subscribing business are
transferred to the leasing firm’s payroll and benefits resources. The leased-employees return to
the subscribing business via the avenue of employee leasing.

ERISA: Acronym for the Employment Retirement Income Security Act. A federal law that governs
pension and welfare employee benefit plans. Sets guidelines for these programs. A group of
complex and extensive law governing employee benefits.

Fidelity Bond: Protects an insured business against dishonest acts such as embezzlement,
forgery and theft committed by employees.

Flexible Staffing: Trend in American companies towards a core of permanent employees with
critical skills necessary for a company's survival, surrounded by a flexible ring of contingent staff
to handle peripheral, non-core functions. See also "balanced staffing," "contingent staffing," and
"just-in-time staffing."

Front-Office: The front-office responsibilities of a contract placement are similar to permanent

placements. Recruiters get job orders, then recruit candidates. The front-office is the key contact
with the Client Company and the back-office handles the administrative and payroll functions.

F.U.T.A.: Stands for Federal Unemployment Tax Act. "F.U.T.A." is the term used for the payroll
tax every employer must pay under this Act. This tax cannot be withheld from the employee's
pay, it is solely the responsibility of the employer.

General Employer: In joint employer situations or court cases involving multiple employers, the
general employer is the original employer who retains the employment agreement with the
employee. This is the employer with broad control. The courts and administrative agencies
identify the general employer as the employer who is maintaining the employee on the payroll
and providing benefits and its responsible for the long-term employment relationship. The
borrowing or short-term employer is called the special employer.

Independent Contractor: An Independent Contractor provides services to a company, but is not

an employee of that company. The company pays the Independent Contractor without
withholding payroll taxes or paying the employer's share of payroll taxes. An independent
contractor has the right to decide how the work will be done and may hire others to assist or do
the work. Independent contractors also do not receive wages. Independent Contractors are under
intense scrutiny from the IRS and states because of abuses costing billions of dollars of taxes.

Liability Insurance: Insurance that covers bodily injury or property damage to others, to third
parties.

Margin: Dollar amount difference between the Client Company bill rate and the Contractor salary.
For example, if the hourly bill rate is $30.00 and the hourly salary is $20.00, the Margin is $10.00.
See also "Markup" and "Multiplier."

Markup: The percentage that the Client Company bill rate is greater than the Contractor salary.
For example, if the hourly bill rate is $30.00 and the hourly salary is $20.00, the Markup is 50%.
See also "Margin" and "Multiplier."

Multiplier: The quotient of the Client Company bill rate divided by the Contractor salary. For
example, if the hourly bill rate is $30.00 and the hourly salary is $20.00, the Multiplier is 1.5. See
also "Margin" and "Markup."

Payrolling: A term primarily found in the temporary help literature. Refers to situations where all
or a portion of a client-customer’s employees are on the payroll of a staffing firm but working at
the client-customer’s location. The client company may want to screen or interview the
employees because of safety or experience requirements, but they do not want the
recordkeeping obligations associated with payroll and withholding. Traditionally, a recruiter does
not locate a payroll candidate.

Payroll Taxes: Employers are appointed, as agents of the government, to withhold federal, state
and local income tax from employee’s wages. These obligations are severely regulated and carry
heavy penalties if they are not done correctly.

Outsourcing: Basic outsourcing is where the client company has an entire department staffed by
the employees of a staffing company, from top to bottom. Can be done on or off the client
company premises. See also "Vendor on Premises."

Special Employer: This term is used in general and special employment. A special employer is a
person or organization that is deemed to share an employer-employee relationship with the
general employer. It applies more accurately where the general employer momentarily
relinquishes control over their employee[s] to another employer.

Sole-Source: One "source" or means of acquiring all of your staffing needs. Commonly referred
to as Sole-Source Supplier which allows a Client Company to go to one recruiter (firm) for all their
staffing needs. (Permanent, Temp-to-Perm, Contract, Payrolling, Etc.)

Staffing Company: A company, such as TE Contracting, who is the employer for contractors and
handles the back-office functions associated with payroll and administrative duties.
S.U.I.: Stands for State Unemployment Insurance. Each state imposes a payroll tax on the
employer for unemployment benefits. The tax ranges from 1% to over 5% of each dollar of
payroll. The employer is entirely responsible for paying the tax, it cannot be deducted from the
employee's pay.

Technical Contracting: Contracting jobs such as engineers, programmer analysts, systems

analysts, drafters, designers, and technical writers.

Temp-to-Perm: A contractor (employee) is placed on an assignment with a client company

based on the assumption that if the client likes the employee, the employee may be permitted to
be hired by the client as a direct hire. A "try before you hire" practice.

Traditional Employment: New term for permanent employment. Non-traditional jobs are the
contingency positions.

Triangular Employment: Relationship between contractor, staffing company, and client

company in which the contractor is the employee of the staffing company but performs services
for the client company.

Unemployment Insurance: Government sponsored protection to assist workers who have been
laid off or even quit their jobs through no fault of their own. The unemployment income lasts only
a few months. This insurance represents a significant contribution on the part of an employer as a
percentage of employees’ gross wages.

Vendor on Premises: Outsourcing arrangement where a full-time staffing coordinator

administers the entire outsourcing process for the client: interviewing, testing and screening
applicants, filling job assignments, issuing payrolls, providing on-site management of the
department.

Virtual Corporation: New term for maintaining a minimum staff of core employees, surrounded
by a ring of contingent staff.

W-2 vs. 1099MISC: At the end of each year, workers either receive a Form W-2 or a Form
1099MISC. An employee receives a W-2 and has all required payroll taxes withheld throughout
the year. An Independent contractor receives a 1099 and has no payroll taxes withheld.

Workers’ Compensation: Businesses are required by law to obtain workers’ compensation

insurance for their employees. The purpose of this insurance is to provide medical and other
benefit coverage for employees who suffer a job-related injury or illness. Generally speaking, the
staffing firm must maintain workers’ compensation for their employees, or coordinate coverage
through the subscriber.

An individual that is an independent contractor fills the following roles:

• The independent contractor will work with a number of clients.

• The independent contractor's role is to accomplish a final result and it’s the independent
contractor who will determine the best way to achieve that result. The independent
contractor will define what the agreed upon "result" is in a contract with your customer.
• The independent contractor pays his/her own taxes and files the required government
forms.
 • A city license, business license, and a fictitious name or dba statement will be obtained
by the independent contractor. Also, the independent contractor must obtain any
necessary permits.
• Social Security taxes are the sole responsibility of the independent contractor.
• The independent contractor must obtain his/her own benefits including workers'
compensation, disability, etc. The independent contractor is not entitled to any typical
employee benefits from any government agency.
• Independent contractor agreements traditionally provide professional liability coverage.

Contractor Classification: 1099 vs. W-2

Back taxes can total:

15.30 % Social Security Tax (on income up to the cap, plus 2.9 % of income above that cap)
20.00 % Federal Income Tax
+6.20 % Unemployment Insurance
41.50 % of the contractor's pay

Auditors can go back three years. Fortunately, for those companies the IRS feels did not
intentionally ignore the law, the fines are less (Section 3509 of the Internal Revenue Code). Be
advised that any relief of tax liability provided by the IRS -- such as Section 530 of the Revenue
Act of 1978 -- is of limited applicability in the staffing industry. This section, also referred to as the
"Safe Harbor Act," was amended in 1986 to not relieve engineers, designers, drafters, computer
programmers, systems analysts, or other similar skills or lines of work of tax liability.

Additional fines can be imposed by the IRS depending on the situation. The violations and
associated fines are:

Violation Potential Fine

The minimum fine is $50 for each form that you

Failure to file W-2 or 1099 form failed to file. The maximum fine is $250,000 per
business or $100,000 for small businesses.

Failure to file quarterly returns 25 percent of the unpaid tax liability.

0.5 percent of the unpaid tax liability for each

Failure to pay taxes
month up to 25 percent.

$50 for each Social Security number you didn't

Failure to get Social Security number
get.
There are also significant fines if the IRS believes you committed fraud or were negligent, plus
fines for many other situations. Contact the IRS if you want further information. In addition, any
responsible person (including corporate officers and employees or members or employees of a
partnership) with authority over the financial affairs of the business who willfully fails to collect and
pay taxes may be held personally liable for the total amount of the uncollected tax under the
"100 percent" provisions of the Internal Revenue Code (I.R.C.). Another point to keep in mind is
that independent contractors who wrongfully benefited as a result of being paid on a 1099 are
virtually free from penalties. The IRS may audit them and require them to eliminate any business
deductions they took; however, the main focus is on the entity with the deepest pockets, in most
cases, the company.

Furthermore, if a company classifies workers to avoid paying overtime according to the FLSA, the
company can be subject penalties, from the payment of unpaid overtime premiums to liquidated
damages, fines of $10,000, and six months imprisonment for willful violations. Unpaid overtime
premiums alone may represent substantial monetary liability depending upon the size of the work
force and the length of time that the company has failed to pay appropriate overtime

Immigration Acronyms, Designations, and Terms

Alien A foreign-born person who is not a citizen or national of the United States. Aliens generally
qualify for immigrant status by having a close family member or employer sponsor them.

BIA Board of Immigration Appeals. The BIA is an administrative appeals body separate and
independent from the INS, and directly accountable to the Attorney General. The BIA decides
appeals from decisions of immigration judges.

DOJ Department of Justice. The U.S. Department of Justice enforces federal laws,
supervises the federal penal institutions, furnishes legal counsel in cases involving the federal
government, interprets laws relating to the activities of the other federal departments, and renders
legal advice, upon request, to the President and to Cabinet members. One division of the DOJ is
the INS.

DOL Department of Labor. The U.S. Department of Labor enforces U.S. labor laws and
regulates workplace activities required by those laws, including those related to immigration.

EAD Employment Authorization Document. Usually takes the form of an I-688B or I-766 card.
Gives the alien work authorization, and can be utilized when completing Form I-9.

EOIR Executive Office of Immigration Review. Consists of two parts, the immigration judges
and the Board of Immigration Appeals (BIA).

Green Card The authorizing document for permanent residency. Although once green, it is now a
different color.

I-9 Form prescribed by the IRCA to verify the employment eligibility of workers. I-9's are to be
completed within three days of the employee starting work.
I-20 Form which documents that the alien has been accepted for a course of study by a school
authorized by the INS to accept foreign students. This form is also used as supporting
documentation when applying for an F-1 student visa.

I-94 The document received as one enters the United States which states place, date, status of
entry and time allowed to remain in the U. S.

I-129 Form utilized by an employer to petition for an alien to come to the US temporarily to
perform services or labor, or to receive training, such as on an H-1B visa. It can also be utilized
for an extension of stay or change of status in certain situations.

I-538 Practical Training Application. Along with a copy of the I-20, this form is utilized by a student
visa holder to obtain work authorization. If approved, the student will receive an EAD form I-766.

I-688B A card issued to aliens who are authorized to work temporarily in the United States. It is
being replaced with the I-766.

I-765 Application for certain aliens who are temporarily in the United States and wish to apply to
request an Employment Authorization Document (EAD).

I-766 A new version of the I-688B. While the document is being phased in, some work-
authorized aliens will continue to receive their work authorization on the existing EAD, the I-688B.

IIRIRA Illegal Immigration Reform and Immigrant Responsibility Act of 1996.

This 1996 law increased penalties for many immigration violations. The law also affects legal
immigrants, nonimmigrants, refugees and others in many ways.

IMMACT 90 The Immigration Act of 1990.

Increased legal immigration by 35 percent, enabling more family-sponsored immigration and
increasing employment-based immigration, while providing a "diversity" program for immigrants
from countries traditionally underrepresented in the U.S. This program is also known as the
"green card visa lottery."

Immigrant An alien admitted to the U. S. as a lawful permanent resident. Immigrants are those
persons lawfully accorded the privilege of residing permanently in the U. S. They may be issued
immigrant visas by the Department of State overseas or adjusted to permanent resident status by
the INS. The primary distinction between nonimmigrants and immigrants is that most
nonimmigrants must intend to return to their country of origin after their period of authorized stay
has ended, while immigrants can and normally have the intent to stay permanently in the United
States.

INS Immigration and Naturalization Service.

The most important DOJ unit for immigration purposes is the INS, headed by a Commissioner.
The INS maintains a headquarters office in Washington D.C., as well as four regional service
centers and thirty-four district offices throughout the United States and overseas.

IRCA Immigration Reform and Control Act of 1986.

This law attempted to address the problem of illegal immigration in two ways. First, Congress
granted a one-time amnesty for certain out-of-status foreign nationals, enabling them to become
permanent residents. Second, Congress imposed employer sanctions on businesses who hired
unauthorized workers. It also established requirements for verifying the employment eligibility of
workers. That verification is done on Form I-9.
INA Immigration and Nationality Act of 1952.
The basic statute for current U.S. immigration law.

LCA Labor Condition Application.

A form completed with the appropriate office of the DOL. It is a representation that the petitioner
agrees to pay the beneficiary the prevailing wage for the job.

Naturalization The process by which a foreign national acquires U. S. citizenship.

Nonimmigrant Persons who come temporarily to the United States for a particular purpose
(e.g., as students, tourists, diplomats, or temporary workers). An applicant for a nonimmigrant
visa usually must convince the INS or consular officer that they do not intend to immigrate to the
United States and that they intend to return to their home at the end of their authorized stay.

OF-156 Application for Nonimmigrant Visa. This form is utilized when applying for an F-1 visa.

USIA U.S. Information Agency.

The U.S. Information Agency is an independent foreign affairs agency which supports U.S.
foreign policy and national interests abroad. The USIA conducts international educational and
cultural exchanges, broadcasting, and information programs.

B-1 Temporary visitor for business - The B-visa is the most common visa issued by the United
States Consular. The B-1 visa is used for specific categories of business in the United States.

B-2 Temporary visitor for pleasure - The B-2 visa is issued to tourists or visitors for pleasure.
With either the B-1 or B-2, the holder of the visa may not engage in activities which will result in
financial compensation unless it is paid from abroad.

E-1 Treaty Trader - The treaty trader visa allows foreign nationals to enter the United States for
the purpose of directing and developing import/export trade between the U.S. and the treaty
country.

E-2 Treaty Investor - The treaty investor visa allows foreign nationals to enter the United States
for the purpose of directing and developing substantial investments made in a U.S. business.

F-1 Student - This visa is available to persons seeking to enter the United States for the purpose
of engaging in a full-time academic program. While a foreign student is participating in a full-time
academic program, or immediately upon graduation, the student may apply for a period of
practical training. The requirements are essentially that the practical training must be related to
the course of study the student is pursuing. The school will certify that the sought after practical
training will benefit academic training as well. Most schools have a student advisor to assist
foreign students with all the required paperwork. The practical training period lasts 12 months.

H-1B Professional in a Specialty Occupation - This is one of the most important non-immigrant
visas available to qualified foreigners who want to come to the United States to perform services
in a "Specialty Occupation." Specialty occupation is defined as an occupation which requires
theoretical and practical application of highly specialized knowledge in such fields as architecture,
engineering, mathematics, physical sciences, medicine and health, education, business
specialties, accounting, law, theology, and the arts. It also requires at least a bachelor’s degree or
higher in the specific specialty or its equivalent.

H-2 Temporary Agricultural Worker - The H-2 visa allows an agricultural worker to enter the
U.S. and work for a temporary time period.
H-3 Trainee - Visa classification applicable to trainees other than medical or academic. This
classification also applies to practical training in the education of handicapped children.

J-1 Exchange Visitor - This visa assumes the foreign employee will be actively engaged in on-
the-job training and the employer will be gaining some productive benefits from the foreign
employee’s activities. One of the most unusual characteristics of this visa category is that the
foreign exchange visitor will be barred from filing a permanent visa petition or applying for a
change of status to H or L for a period of two calendar years from the date of United States
training completion. There is a Foreign Residency Requirement. This requirement states that the
visa applicant may have to go back to their country of origin for two years before applying for a
renewed visa.

K-1 Fiancée - This visa gives someone the right to come into the country for 90 days. During this
90 days they MUST get married. When they enter the country they can apply for and receive the
Employment Authorization Card. The EA Card is good for 90 days. When they actually get
married, they petition the INS and they are granted a conditional status for residency. At the end
of two years they petition the INS again and they are granted a permanent residence IF they can
prove they have lived together as man and wife. Tax returns, joint bank accounts, children with
birth certificates, etc.).

L-1 Intracompany Transferee - The L-1 visa is one of the most flexible and sought-after
temporary visas which provides for employment. The purpose of the L-1 visa is to facilitate in the
transfer of key employees to the United States from companies that are affiliated with or related
to United States corporations. The prior employer/foreign company must be related to the United
States company, either as a subsidiary, affiliate or division.

O-1 Alien of Extraordinary Ability in sciences, arts, education, business or athletics - Visa
issued to aliens possessing extraordinary ability in the sciences, arts, education, business, or
athletics. Such applicants must demonstrate extraordinary ability through sustained national or
international acclaim.

P-1,2,3 Performing Artists and Athletes - Visa issued for the purpose of allowing performers
and athletes to enter the United States to compete or perform for a temporary time period.

R-1 Religious Workers - Allows foreign ministers of religion, professional workers in religious
occupations, and other religious personnel who work for a religious non-profit organization to
enter the United States to perform religious work for up to five years.

TN-1 Canadian Professionals and Consultants - Allows a professional from Canada to enter
the United States to perform professional work pursuant to the North American Free Trade
Agreement.

TN-2 Mexican Professionals and Consultants - Allows a professional from Mexico to enter the
United States to perform professional work pursuant to the North American Free Trade
Agreement.

CH or C/H – Contract to Hire.

CON – Contract position.

CS – Customer Service.

CSR – Customer Service Representative.

DAN - Dice Affiliate Network

DOE – Depending on Experience or Discretion of Employer.

EB-1 – Employment-based immigration category for aliens of extraordinary ability.

EB-2 – Employment-based immigration category for aliens with advanced degrees or

exceptional ability.

EB-3 – Employment-based immigration category for aliens with bachelor's degrees.

Most immigrants become residents through this category.

EOE – Equal Opportunity Employer.

H-1B – Visa for temporary skilled workers (sponsored).

H-4 – Visa for family members of H-1B Visa holder.

J-1 – Visa for doctors and researcher usually tied to some sort of research grant or
exchange program.

J-2 – Visa for the spouse of an J-1 Visa holder.

NAFTA – North American Free Trade Agreement.

RTH – Right to Hire.

RTW – Right to Work.

TN – Visa for temporary workers authorized under schedule 2 of NAFTA.

URL – Uniform Resource Locator web address of a web site.

1099 Employee – A 1099 employee is in most cases a temporary employee
(technically, not even an "employee"). Because they are not permanent, they
do not need to complete a W-4 or have the employer withhold taxes. They are
responsible for paying their taxes directly to the IRS. The IRS requires that the
employer report the earnings paid on a form 1099. The IRS would rather put
the burden of tax withholding on the employer and therefore has fairly
stringent rules regarding when someone can be considered a 1099 employee.

Announced – Job seekers that are ready to work in 30 days and appear on the Hotlist.

Corp-to-Corp – Indicates that the employer would prefer to deal directly with another
corporation. The main reason for this preference is to avoid some of the potential
liability that might exist in dealing with an independent contractor on a 1099 basis.
This would include corporations dealing directly with other corporations or
corporations dealing with individuals who have incorporated.

EB-1 – Employment-based immigration category for aliens of extraordinary ability.

EB-2 – Employment-based immigration category for aliens with advanced degrees or

exceptional ability.

EB-3 – Employment-based immigration category for aliens with bachelor's degrees.

Most immigrants become residents through this category.

H-1B – Visa for temporary skilled workers (sponsored).

H-4 – Visa for family members of H-1B Visa holder.

Independent – The employer is willing to hire a temporary employee on either a 1099 or

W-2 Basis.

The IRS classifications of workers are independent contractors or employees

according to the "common law" standard. The common law standard holds that if an
employer controls and directs, or has the right to tell a worker how, when, and where
to work, then the worker is an "employee". A worker free from such direction and
control can be classified as an "independent".

J-1 – Visa for doctors and researcher usually tied to some sort of research grant or
exchange program.

J-2 – Visa for the spouse of an J-1 Visa holder.

Job seeker – Candidate looking to better their employment opportunities. There are
three types of job seekers:

• Announced are job seekers that are ready to work in 30 days and
appear on the Hotlist.

• Passive Public are those job seekers that are not actively looking for a
job but would entertain the right opportunity. Passive Public job seekers
names display on the Hotlist, but they will be on the passive list.
 • Passive Confidential are those job seekers that do not want anyone to
know who they are. Job seekers can chose to be confidential and they will
show up in the passive list as a confidential candidate.

Tax Term – Tax Terms include:

• Contract - W2 – Will be working as a contract W-2 employee for the company.

• Contract to Hire - W2 – Will be working as a contract W-2 employee for the

company with the option to hire.

• Full-time – Will be working as a full-time W-2 employee for the company.

• Contract - Independent – Will be working as a contract 1099 employee for the

company.

• Contract to Hire - Independent – Will be working as a contract 1099 employee

for the company with the option to hire.

• Contract - Corp-to-Corp – Will be working on contract with or through another

corporation.

• Contract to Hire - Corp-to-Corp – Will be working on contract with or through

another corporation with the option to hire.

TN – Visa for temporary workers authorized under schedule 2 of NAFTA.

W-2 – A W-2 employee is an employee whose taxes are withheld by the employer and
whose earnings are reported to the IRS at the year-end via a W-2. The W-2
employee completes a form W-4 at the beginning of their employment to instruct the
employer on how to withhold taxes. This eliminates any possible issues that may
arise with the IRS regarding employment status.

W-2 / 1099 – The position can be filled by either a W-2 or 1099 employee.

1. What is the difference between a W-2 employee and a 1099 employee?

A W-2 employee is an employee whose taxes are

withheld by the employer and whose earnings are
reported to the IRS at the year-end via a W-2. The W-2
employee completes a form W-4 at the beginning of
their employment to instruct the employer on how to
withhold taxes.

A 1099 employee is in most cases a temporary

employee (technically, not even an "employee").
Because they are not permanent, they do not need to
complete a W-4 or have the employer withhold taxes. A
1099 employee is responsible for paying their taxes
directly to the IRS. The IRS requires that the employer
report the earnings paid on a form 1099. The IRS would
rather put the burden of tax withholding on the
employer and therefore has fairly stringent rules
regarding when someone can be considered a 1099
employee.