Agency withholding percentage of money.

[perplexed]

A friend had an agency ring him up about a role; he was told there had been a high turnover of contractors at the client, mostly leaving early therefore the agency would withhold 10% of invoiced money which would then be paid upon completion of the contract.

He ( rightly imo ) told them to do one; I'd presume that might be legal but is certainly unethical?

[northernladuk]

Why do you think it is unethical?

[BlueSharp]

Make sure you tell him to add 15% to his rate to cover the extra risk of the client being difficult in case he leaves early.

Cheeky 10% bounes on completion.

[perplexed]

Why do you think it is unethical?

There are many valid reasons for contractors to leave. Two instant examples would be family circumstances meaning contractor unable to fulfill contract with potential substitutes unavailable; also, contractor can easily find what was billed for the role isn't exactly what the gig really is.

Now, if a significant number of contractors have left then that indicates to me that there are possibly negatives with the client - how contractors are handled, maybe permies hostile, etc. Holding 10% of invoicable income for say 6 months is a fair bit of cash to wait for - cynical me would say it gathers the agency interest in the meantime.

I've never seen or encountered this scenario personally. Potentially penalising a contractor for the actions of previous contractors certainly strikes me as a tad unethical.

[perplexed]

Make sure you tell him to add 15% to his rate to cover the extra risk of the client being difficult in case he leaves early.

Cheeky 10% bounes on completion.

Like the thinking but I'd have suggested 25%.

[northernladuk]

I've never seen or encountered this scenario personally. Potentially penalising a contractor for the actions of previous contractors certainly strikes me as a tad unethical.

It's business and happens in other areas, not just business. It's shaping the future from the past learnings. I think we call it CSI

Still crap though.

[perplexed]

It's business and happens in other areas, not just business. It's shaping the future from the past learnings. I think we call it CSI

Still crap though.

I've genuinely never seen it before tbh.

If the agency were any good, they'd work with the end client to a) discover why contractors were leaving early and b) come up with an approach to make client more contractor friendly. Win-win for both long term.

[northernladuk]

I've genuinely never seen it before tbh.

If the agency were any good, they'd work with the end client to a) discover why contractors were leaving early and b) come up with an approach to make client more contractor friendly. Win-win for both long term.

Me neither and it's really poor but it's hardly unethical which was my point really.

[Lance]

adding some genuine financial risk to the contractor if they fail to deliver. Isn't that a nice fat juicy outside IR35 tick?

[northernladuk]

adding some genuine financial risk to the contractor if they fail to deliver. Isn't that a nice fat juicy outside IR35 tick?

Not fat enough to make it worth losing a big chuck of income should have to rely on your notice period.