New Scams With Body Shops

Almost all of the independent consultants that I know go through brokers (aka "body shops") for their work. These places find you work, and take anywhere from 10% to 50% of your daily rate for their commission. In the times that I have contracted out through brokers, I have never had a problem getting paid. The best of the shops took 12% off the top for their commission, and they paid exactly on time.

From what I have been hearing, there is an alarming trend amongst bodyshops now, especially with the brokers that concentrate on workers with H1B visas. The trend is to not pay the final bill that the consultants submit.

Many H1B consultants do not have the facilities to persue these consulting firms. If the amount owed is undr $5000, then they can go to Small Claims Court, but the wait is at least several months. If the amount is large, then a lawyer will have to persue the claim in Civil Court, and usually the amount that the lawyer receives out of the deal (a 30% cut) will not justify the attorney's time.

My brother-in-law is a lawyer in New Jersey, and he told me that the frequency is increasing in the number of these type of cases. He advises one thing - do not sign an arbitration clause in your contract. It will cost you upwards of $10,000 to bring a matter before an arbitrator, and there is no provision in the law to recoup the money spent on arbitration. So, it is likely that you might spend more money on the arbitration process that the monies that you recoup from the consulting firm.

Another thing to be aware of --- be careful of brokers who only call you from cell phones. Make sure that the broker has an actual, physical office that you can visit. My guess is that some brokers are using commission-based freelancers to pour over resumes on Dice. Several times per day, I get a call from some lady named Smitha or Geeta who is on a cellphone and asking me if I want to work in Cleveland for $35 an hour. You can be sure that these people will take at least $5 an hour from your rate.

I am a full-time employee of my consulting firm. In these times, it feels safer that way!