You're Fired! Now Come Back
The pros and cons of freelancing for the employer who laid you off.
March 19, 2009 — -- When Jeof Oyster was laid off from his job as interactive director of a public relations firm in October, he decided to step up his long-range plan to start his own Internet consulting business.
Little did he know his first client would be the employer who'd just given him the boot.
"Two days after they off'd me, I got a call from the person who let me go asking if I'd be willing to do a little freelance work for them," said Oyster, who now runs Mighty Ants Internet Studio from his New York City apartment.
But in the decision to downsize, the company Oyster had been with for the better part of a year overlooked one important factor: their clients.
"Turns out their rush to get our team out the door royally pissed off a major client of our group -- and their attempts to assuage him fell on deaf ears," Oyster said. "The choice was get the team back or lose the client."
As a result, Oyster was able to negotiate a three-month freelance arrangement at twice the hourly rate he was making as a salaried employee, enough to pay his rent while he got his own business up and running.
"I said, 'Look, if you need me back, this is my rate,'" Oyster explained. "The ball was totally in my court."
But the payoff wasn't just financial.
"I admit I felt rather vindicated in the end," Oyster said.
With so many employers looking to cut costs and clean house, stories like Oyster's are increasingly common.
No one can fault you for rushing back into the arms of an ex-employer to temp or freelance for them, not when good full-time jobs are so hard to come by these days. But when a company that jilted you extends an olive branch -- and then an offer to rekindle your working relationship, no matter how fleeting -- what are you really signing up for?
No Strings Attached
When the Seattle media company that laid off Cherise before the holidays asked her at the start of the year to fill in for someone on maternity leave, she was elated.
"I was so panicked about my finances that I was thrilled to have an opportunity to earn an income," Cherise said in an email. "And because it was a job I loved, I jumped at the opportunity to have it again, even if just for a few months."
(Cherise, like the rest of the people interviewed for this article, declined to give her real name.)
Besides staving off unemployment until her colleague returns to work this summer, Cherise is reunited with the coworkers she knows and loves (that is, those who weren't also laid off), in the full-time Web editor position she already knows how to do. No training required, no awkward "new girl on the job" phase to muddle through.
But on the minus side, her love affair with her job once again has an expiration date.
"The biggest challenge has been to not become too attached," Cherise said. "It's in the back of my mind every day that I'm only here temporarily, so I haven't brought in pictures or personal effects."
The Benefits Are on You
Another downside of reprising your role for an ex-employer as a temp or freelancer: You won't enjoy the same benefits you had as a full-time employee.
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.
So he said he called up the editor that was brought in to replace him and said, "Hey, no hard feelings. If you have any work for me, I'd be happy to do some."
"It may not feel great, but I think it's a nice way to transition -- especially if you have very little severance package," said John, who's still waiting for his unemployment checks to kick in. "Now they're just another freelance client."
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
Michelle Goodman is a freelance journalist, author and former cubicle dweller. Her books — "My So-Called Freelance Life: How to Survive and Thrive as a Creative Professional for Hire" and "The Anti 9-to-5 Guide: Practical Career Advice for Women Who Think Outside the Cube" -- offer an irreverent take on the traditional career guide. More tips on career change, flex work and the freelance life can be found on her blog, Anti9to5Guide.com.