Contractor Contracts

tim-cain contracting game-industry contracts freelancing business

Abstract

Problem: What should game industry contractors look for and negotiate in their contracts before signing?

Approach: Tim Cain draws on his extensive experience as both a contractor and someone who has hired contractors in the AAA game industry to walk through the critical elements of contractor contracts.

Findings: Contractors must negotiate their hourly rate (factoring in self-employment tax, insurance, equipment, and workspace costs), establish clear availability terms (contact methods, response times, core hours, time zones), set both maximum and minimum hours per pay period, and critically — push for non-exclusive contracts.

Key insight: Always include minimum hours in your contract to prevent companies from keeping you under contract without actually using you, and make the contract non-exclusive so you can take other work simultaneously.

Source: https://www.youtube.com/watch?v=rrdYdeGqbzU

1. Context and Caveats

Tim opens with a clear disclaimer: he's not a lawyer — "just a guy who's done this a lot, sitting here wearing an old Peanuts shirt." He distinguishes this video from his previous ones on being a contractor vs. employee and on publishing contracts (which cover royalties, breach terms, and monthly rates). This video focuses specifically on what to look for in the contract itself when you're doing contract work in the game industry.

He also notes that the contracting company usually supplies the contract, but contractors should not assume they can't negotiate changes. Some back-and-forth is expected and normal.

2. Setting Your Hourly Rate

Tim emphasizes that as a self-employed contractor, you're responsible for far more expenses than an employee, so your rate must reflect that. His method:

2.1. Calculate Your Baseline

  • Take your previous employee salary and convert it to an hourly rate
  • Bump it up by 20% to 50% depending on your circumstances

2.2. Factor In Additional Costs

  • Self-employment tax — paid quarterly, possibly requiring an accountant to estimate
  • Health insurance — medical, dental, and vision are all on you, and individual plans cost significantly more than company group plans because there's no pool of people to share risk
  • Equipment — you're expected to at minimum own your own computer
  • Workspace — you need a space conducive to video calls at various times; a dining room table shared with a spouse and kids won't cut it for a 6 PM call
  • Office rental — you may need to rent space at a co-working place like WeWork
  • Software subscriptions — if the company expects you to use paid tools (Slack, etc.), factor that into your rate
  • Travel — if required, make sure the contract covers flights, mileage (there's a standard rate), and per diem for meals and lodging

3. Availability and Communication

Tim calls availability "a multifaceted thing" and breaks it into several components:

3.1. Contact Methods

Every company uses something different — phone, email, Slack, Teams, Discord. The choice often depends on company size and existing software. If they require you to purchase specific tools, factor that cost into your rate.

3.2. Response Time

Establish clear expectations. Tim suggests using business days rather than calendar days. For example, "two business days to respond" means if they email you on Friday, they shouldn't expect a response until Tuesday — not Sunday.

3.3. Core Hours and Time Zones

  • Specify your available hours in the contract, including your time zone
  • Some companies won't pay attention to where you live; make sure they do
  • Tim shares a story about working with a globally distributed team spanning the US, EU, Asia, and Australia — scheduling team meetings was "an interesting event" since some countries literally don't allow forcing workers to be available outside work hours
  • He once had a team call at 6 AM because he told them he was available that early — "they took me up on that"
  • One person on his team was regularly joining calls at 9–10 PM at night

3.4. Weekends and Off-Hours

Specify whether you'll ever be available on weekends. If you agree to work outside core hours or on weekends, charge a premium — Tim suggests 150% or double your normal rate. Put all of this in the contract so there are no surprises when you decline a 1 AM call.

4. Hours: Maximums and Minimums

4.1. Maximum Hours

Companies will almost always put a maximum number of hours per pay period in the contract — 80 hours per two weeks, 160 per month, 480 per quarter. This cap may be absolute ("verboten" to exceed), or you may need written permission from a specific person (the producer or your lead) to go over, with advance notice. Tim prefers email as the written record.

4.2. Minimum Hours (Tim's Strong Recommendation)

Tim considers this one of his most important pieces of advice. Without minimum hours in the contract, a company can keep you under contract for weeks or months without assigning any work. You're "floating around waiting to see if any hours come in" — unable to take other work if the contract is exclusive, and not getting paid.

By including minimum hours, you essentially tell the company: "Use me or cut me loose." Tim has had companies dip below the minimum but keep him on because they knew work was coming and didn't want to lose him — which is exactly the dynamic minimum hours creates. The minimum can be modest — just enough to cover your administrative overhead (taxes, software maintenance).

5. Exclusivity: Tim's Deal Breaker

Tim calls this "super important" and "a no-brainer." Companies will frequently try to make contracts exclusive, meaning you can't work for anyone else while under contract. Tim's position:

  • For him, exclusivity is a deal breaker — he demands non-exclusive contracts
  • If you do accept exclusivity, make sure the company understands they're paying for exclusive use of your skills — which means your hourly rate goes up and your minimum hours per pay period also increases
  • The company may counter by demanding lower response times and nights/weekends availability
  • Look for exclusivity clauses carefully — "it's usually in there somewhere"

6. Billing Frequency

Tim has seen three common billing cycles:

  • Every two weeks
  • Every month
  • Every quarter

He advises thinking about what works for your cash flow. If you're paid quarterly, you receive a large check around the same time quarterly estimated taxes are due — and whatever's left is what you live on for three months. Make sure that arrangement is sustainable for you.

7. References