Contract inside IR35, via Umbrella, Agency insists on opt-out of 2003 Regs

[gregNoWorries]

At which point you CV will go no further or the offer is made to the next candidate along...

Pessimistic, but no doubt truthful.

[northernladuk]

Pessimistic, but no doubt truthful.

Why is it pessimistic? Agencies have extra legal responsibilities if the worker opts in and most have chosen not to take that burden on for one reason or another. If the worker chooses not to, or refuses to opt out then it doesn't fit the agencies model so they just move on to the next one. It's just a question of process. They aren't the smartest bunch and rarely know what they are actually dealing with, particularly when it comes to these regs so will just tick the box and if not move on.

I'm sure some will be flexible allowing opt in, a few will begrudgingly go along with it but a majority will be opt out or no further.

To be fair though, I don't think I've seen it tested. It's just a pointless exercise and we've not seen an example where an agent says no and the worker takes it all the way. The worker generally folds. No one throws a perfectly good gig away over opt in/out choices.

[ladymuck]

It's extra fun when an agency tells you that opting in for an outside contract makes it an inside contract.

[Spoiler]

Contractors can decide to opt-in even after havingopted-out, but this can only take effect following completion of the assignment to the client they opted-out with.

Question on this - having opted-out, what is the point of being able to opt-in but it only taking effect following completion of the assignment? Does that actually change anything?

Specifically, does the opt-in change the terms around exclusivity?
Example:
Opted-out at the start. Contract has 12 month exclusivity clause after end of contract.
Opt-in before the assignment ends.
Does the opt-in apply now after the assignment has ended - so the exclusivity restriction is 8 weeks (Agency Conduct Regs reg 10), not 12 months (contract)?

I did phone and ask a “membership tax helpline” but they didn’t provide a clear answer.

[malvolio]

Some years back, when I was arguing about the merits or otherwise of the opt-out - the Regs are so poorly drafted that they applied to areas they were never intended to apply to - I goaded one of our regular agency contributors to look into his agency's use of the opt out. He discovered (surprise, surprise) that over 90% of their opt outs were ineffective.

It all hinges on the definition of "introduced". I know the legalists will disagree, but the reasonable definition is when the client knows who you are. Which is usually well before a contract offer (unless you work for Office Angels or similar where "someone" from the agency will turn up to do the work, hardly our typical situation).

I always included a statement that I opted out when first applying. After that I simply ignored any agency requirements about it as irrelevant.

[lucyclarityumbrella]

Even if you are "made to Opt Out", you also have a legal right to be able to Opt back in again!

[malvolio]

Even if you are "made to Opt Out", you also have a legal right to be able to Opt back in again!

Strictly speaking you can't opt in, you are in unless you specifically and correctly opt out. AIUI you can only withdraw an opt out on renewal of the contract.

However the earlier comment is quite correct. When we challenged HMG on the whole nonsense of the opt out and its abuse, their answer was an unequivocal "business can choose who they do business with", which makes a large hole in all sorts of contractual conditions...

[Spoiler]

Even if you are "made to Opt Out", you also have a legal right to be able to Opt back in again!

ok. So, i think in the scenario where i opted out at the start of the contract/assignment (lets just pretend it was all done correctly).
I can now withdraw my opt-out (or “opt-in”) before the end of the assignment.
But it makes no material difference to the contract terms - the opt-in didn’t apply to it, as the opt-in only applies once the assignment is finished.

But, in the scenario where I renew my contract, if i “opt in” before the next renewal, then that will apply to the renewal - as it’s a new assignment.
I just checked my last few contract renewals - and each one is a new assignment date range (eg. 6 months) and a different agreement number each time.

So i just need to withdraw my opt-out now, and then sign a contract extension and I’ll be “opted-in” ?!

[malvolio]

ok. So, i think in the scenario where i opted out at the start of the contract/assignment (lets just pretend it was all done correctly).
I can now withdraw my opt-out (or “opt-in”) before the end of the assignment.
But it makes no material difference to the contract terms - the opt-in didn’t apply to it, as the opt-in only applies once the assignment is finished.

But, in the scenario where I renew my contract, if i “opt in” before the next renewal, then that will apply to the renewal - as it’s a new assignment.
I just checked my last few contract renewals - and each one is a new assignment date range (eg. 6 months) and a different agreement number each time.

So i just need to withdraw my opt-out now, and then sign a contract extension and I’ll be “opted-in” ?!

In theory yes. There is a good chance the renewal will be withdrawn. The agency want the opt out because if you are inside the regs they have to do a lot of extra paperwork as well as take on a level of financial risk around late payments by the end client.

[northernladuk]

ok. So, i think in the scenario where i opted out at the start of the contract/assignment (lets just pretend it was all done correctly).
I can now withdraw my opt-out (or “opt-in”) before the end of the assignment.
But it makes no material difference to the contract terms - the opt-in didn’t apply to it, as the opt-in only applies once the assignment is finished.

But, in the scenario where I renew my contract, if i “opt in” before the next renewal, then that will apply to the renewal - as it’s a new assignment.
I just checked my last few contract renewals - and each one is a new assignment date range (eg. 6 months) and a different agreement number each time.

So i just need to withdraw my opt-out now, and then sign a contract extension and I’ll be “opted-in” ?!

What are you hoping to achieve with the change in status if you don't mine me asking?