How to bring up the 1099 conversation with your boss

Assuming you've done all the prep work to get to the point where you need to talk to your boss about going 1099, here is the section from my chapter on converting your job into a 1099 gig that will help you broach the topic.

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Just like with the client, start off with a bit of small talk, and then inform them you are thinking about making the transition to 1099 life.

“Hey Jane, I’ve been thinking about making a career move and wanted to get your thoughts. I decided I want to become an independent contractor in this field. I think I’ll have more opportunities and flexibility going down that route.”

After you reveal your intentions, you’re not necessarily looking for a very positive reaction. After all, you are making the program manager’s life harder by telling her you are planning on leaving the company!

What will likely happen is that she’ll express some level of (fake) enthusiasm for you and ask you when you plan on making the transition.

The goal in the next phase of the conversation is to figure out how open the PM is to letting you stay on the contract as a 1099, and to make sure she understands your timeline is slightly ambiguous but still in a short time frame. It is also helpful to remind her that the client likes having you on the project.

“I’m not sure exactly when I’m going to make the leap, but it will probably be within the next 4-8 weeks. That being said, I really enjoy working for you on this project and I have a good relationship with Jack [the client]. Are you opposed to me staying on as a 1099?”

I want to warn you that it is highly unlikely that you are going to get a response to the effect of “Of course you can stay on as a 1099!” You are probably going to get some combination of stalling techniques and excuses about why it’s difficult or not feasible.

Here are a few common ones you can anticipate:

  • I’m not sure the contract permits subcontractors
  • It is very difficult to get approval to add 1099s
  • We have never had a 1099 on the contract before
  • You will need a facility clearance as a subcontractor
  • We would prefer to keep you on the team as a W2. Maybe I can figure out a way to get you a raise or bonus instead?
  • Let me check with HR but I’m not optimistic
  • There is a rule against hiring employees back as a 1099
  • No, it’s not possible

The PM wants to buy time and take the easiest path so she is going to try to discourage you.

Don’t panic! Even if they say no, because you are of high value to the client, you have enough leverage to push back.

Whenever the PM presents some kind of objection or excuse, ask for more details. Your response to “I’m not sure the contract permits sub-contracts” could be

“That’s definitely something I think is worth figuring out. Who can we talk to to sort out the feasibility of adding a 1099 to the project?”

If they offer to give you a raise or bonus instead, you can say

“I really appreciate you checking on that! I’m potentially open to staying on as a W2 a bit longer but what would the steps be to move forward on the 1099 route?”

If they straight up say “No,” than respond with

“It sounds like you are strongly opposed to this move even though it could potentially work for both of us. Is there something I’m missing?”

Never lose your cool, stay positive, and keep the conversation going. Always probe on what the next steps will be.

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If you have questions feel free to reach out to me directly at dale@1099fedhub.com. I can also add you to my informal mailing list in case I have updates or news or whatever.

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This article is an excerpt from Chapter 6 (Method 1: How to Convert Your Job Into a 1099 Gig) of my book.

You can read more about it here:

Going 1099: How to become a solo federal sub-contractor and gain control of your working life, earn more money and unlock more free time