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I work as a contractor (1099 in the US) for a company (let's call it A) a few hours a week and received an offer from a more prestigious, smaller company (B) in a similar field. I plan on working both positions as there's no conflict in interest or scheduling.

Important note: It would be contract work as well, for roughly the same amount of hours. Additional benefits like training and professional development are a factor though.

When asked what I currently make at A, I declined to answer. My reasoning internally was that the pay at B is far higher on average so my current pay would be disadvantageous to share. I was expecting a significant increase in wages but never put down a number.

I got an offer with exactly the same hourly wage.

Coincidence or not, is this anchoring practice standard in contract work? Assuming company B knows what I make at A, is it up to me to justify the pay increase?

I know that negotiation is expected in this situation but I feel like my current wage is putting me in a bad position. I apologize for the vagueness. Any insight would be appreciated though, thanks!

  • Are you going to be a full time employee with a package of benefits with company B? or will you again be an independent contractor? – mhoran_psprep Mar 28 at 13:16
  • @mhoran_psprep It would be contract work as well, for roughly the same amount of hours. Additional benefits like training and professional development are a factor though – 5AM Mar 28 at 13:17
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    How is your current wage putting you in a bad position if the new company doesn't know what your current wage is? – Hart CO Mar 28 at 13:23
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    You assumed company B would pay "a significant increase" in rate just because they are "prestigious"? It sounds like they have offered the going market rate if that is what you are already being paid by A. Or do you have evidence that A's rate is too low for your experience level? You have evidence that "the pay at B is far higher on average"? – topshot Mar 28 at 13:37
  • @HartCO You could probably find the numbers with some digging and industry experience would give you a ballpark idea. The idea that I am still working for that wage (and will continue to) is what makes me feel like it is hurting my negotiating position – 5AM Mar 28 at 13:48
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It does seem pretty severe to offer you only $50, for example, if other 1099 in similar positions are making $100-200 (though granted with more experience apparently). As you noted, you can always negotiate and certainly should. Whether you counter with $100 or some other amount will be up to you, of course. An option to consider is to not price yourself out of consideration (so counter with just $70-80 perhaps), but with the stipulation that you're willing to start at such a low rate as sort of a trial period not to exceed X months so both parties can make sure the fit is good and you have a chance to prove yourself. If you do they will want to keep you at a higher rate. If you come up with some sort of agreement, get it in writing from someone in authority to negotiate.

As for whether the rate at A hurts you, presumably they know the rate A pays via market experience. In the future I would indicate that it is for easier work that you love doing, which is why you are willing to continue working there at that lower rate.

While normally you should not specifically indicate that you plan to keep doing other positions (though that is somewhat common for 1099), since both are just for a few hours a week and have no scheduling conflicts it really shouldn't be an issue here. If you were full-time, many employers frown on moonlighting though may not explicitly forbid it.

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One function of an effective HR department is knowing the market. They should have a general idea of what is fair pay for a role based on function, level of experience/education required, etc. Often that will be a range and with no other information they are likely to offer at the low end of that range. If, without knowing your current pay, you got offered the same it sounds like HR at the new company might just have the market pegged.

Knowing what you currently make is a potent piece of information. If they know you are wanting to leave your current job for other reasons, they don't have much incentive to exceed your current pay. If you are a strong candidate and relatively content at your current position, they know they'll need to beat your current pay to get you to jump ship.

Many companies ask for expected wage/salary, providing that can save everyone some time if expectations are too far apart. I'm a fan of expected wage/salary rather than current salary even if they can take a guess at current based on expected.

In my experience the process and negotiation goes pretty much the same whether it's a contract position or a salaried employee position. Whether you disclose current pay or not, you'll need to sell the employer on your value to get more money.

  • Even worse than "they know you are wanting to leave your current job for other reasons," I shared that I plan on keeping the first job. In the future, is it a better tactical move to convey (whether or not it's the case) that I'll be leaving the previous position in pursuit of higher pay? – 5AM Mar 28 at 14:20
  • @5AM That aspect is different with part-time contracting since they aren't really trying to lure you away, it suggests that they just made an offer based on what they think is fair. I don't think your position in this negotiation is weakened by them knowing you're staying on at your other position, if I were hiring someone part-time I would assume they have other things going on as well. If it were a full time position and they wanted to also work part time elsewhere I might have some concern that it would impact their job performance. – Hart CO Mar 28 at 15:17

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