Housing: for short-term contracts
(let's say 6 months or less)...
One thing some contractors do is get a pickup truck and a travel trailer, like a "fifth wheel", and go from gig to gig staying in RV parks. One guy wanted to self-fund a startup, and he pulled it off by doing this for a couple of years and taking the highest-rate gigs he could find. I haven't done it myself, but it might be a fun way to see the country and make a bunch of money.
Work hours and pay: are contractors
more strictly supervised (as far as
getting specified work done) because
they get paid by the hour?
Not in my experience. However, other than bathroom breaks or maybe grabbing a cup of coffee, you should only do things related to your contract while "on the clock". If you need to do anything unrelated to work, take a break that's noted on your time sheet, and preferably leave the work area. Managers will notice and appreciate that level of professionalism.
There are also supposed to get
overtime pay (at a higher rate) if
they work more than 40 hours per week,
does this really happen? Or do they
work unpaid extra hours just like many
I've never heard of a contract programming gig in the US paying a higher hourly rate beyond 40 hours.
But you do get paid for exactly the hours you work, no matter how many they are. So if your rate is $50 an hour, and the company has you work 60 hours in a week, you get $3000 for that.
I'm much more cheerful as a contractor. If a manager wants me to work extra to compensate for somebody else's screw-up, I'm not irritated - I just smile and think, "Cha-ching!"
[T]he "per diem"... is essentially a
non-taxable daily allowance, which is
supposed to be used for living
expenses... However, from the
information I have seen, the per diem
can only be paid if you maintain a
"permanent" residence you intend to
return to. Is this checked in
practice, and if yes, how?
I doubt most employers would deliberately check, but I can think of several ways a tax dodge like this could be "outed" to them. One way would be to give a "permanent residence" address that wasn't on your credit report, or that Google Maps showed was really a Mailboxes Etc.
Also, if you pulled this dodge and were ever audited by the IRS, they'd likely find it and hit you for back taxes, and probably penalties and interest. If the total exceeded $10,000 and you couldn't pay it immediately, they'd start slapping liens on your stuff. That would be on your credit report and you'd be explaining it for years.
One of the most important assets a contract programmer can have is a reputation for integrity. You can make plenty of money as a traveling contract programmer; it's not worth cutting corners and damaging your career in the future to make a little more today.