You're Fired! Now Come Back

Although Cherise is making the same salary she made before her pink slip and does get vacation days, she won't be eligible for the company's health insurance plan until a few weeks before her job ends. Since it's hardly worth the paperwork to change insurance carriers for just a few weeks, she's decided to keep her own plan.

For staffers who return to an ex-employer as a freelancer, the no-benefits pain can be particularly acute. Not only is paid time off, subsidized health care and retirement matching gone, but as your own boss, you're now responsible for funding everything from your printer paper and computer repairs to the employer half of your Social Security and Medicare taxes (7.65 percent of your income).

That's why Oyster, the Internet consultant, wisely asked his former employer for twice the hourly rate he was making on staff. Because when you factor in benefits, business expenses and downtime between billable hours, freelancing costs a heck of a lot more than working for an employer.

The Perils of an Irregular Schedule

Another pitfall of freelancing or temping for an ex-employer you've recently taken back: Doing so cuts into your job-hunting time. And if your goal is to find another full-time job pronto, you don't want to be stuck in limbo too long, partly living off your ex-employer, partly living off your unemployment checks.

Doug, a database professional in New York, can attest to that.

In October, the marketing firm he had been with for 15 years laid him off, then offered him some ongoing freelance IT work that he could do on a part-time basis.

"While some of the flexibility and work-from-home [arrangement] appeals greatly to me, I have a wife and two kids, and my wife is also unemployed and job hunting," Doug said in an email. "So I want to spend significant time looking for a new job."

Only thing is, his former employer has been upping his workload with each passing week, all the while saying it can't afford to hire Doug back full-time.

"More and more, I am having to repeatedly say no," Doug said. "For example, this Friday I have an out-of-town job interview I need to travel to and focus on."

But it's not just his schedule he must juggle. Like all unemployed workers, Doug must abide by state laws, which regulate how much unemployment income people with such side gigs can collect.

"They think it's strange that I would turn down work in my situation," Doug said of his ex-employer. "But I have to remind them about possible legal issues with unemployment and that at this time I'm looking to find other opportunities beyond them."

Some Work Is Better Than None

Despite the potential drawbacks, you'd probably be hard pressed to find a laid-off worker who'd turn away temporary or freelance work from an ex-employer they had a good working relationship with and don't feel too horribly burned by.

"My philosophy right now is, 'Job is good,'" said Cherise, the Web editor who is temping for her ex-employer. "It buys you some time while you look for something more permanent."

John, a magazine editor caught in the crossfire of a company buyout, agrees. He's now writing freelance feature stories for the publication that laid him off in January, while he hustles to put together a full-time freelance workload.

"One could be vindictive and say, 'Up yours,'" John said.

But he's not one for burning bridges:

"Almost everything I've ever gotten in business has come from people I know," he said.

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