Opt in malarkey

[d000hg]

What's it all about? I see it mentioned as something which catches contractors (or maybe agents, I'm not sure) but never understood it. A quick check of http://www.contractoruk.com/first_timers/index.html doesn't have any "what you need to know about opting in" so it seems a fair question... is there an article on CUK which discussed this specifically?

[Gonzo]

What's it all about? I see it mentioned as something which catches contractors (or maybe agents, I'm not sure) but never understood it. A quick check of http://www.contractoruk.com/first_timers/index.html doesn't have any "what you need to know about opting in" so it seems a fair question... is there an article on CUK which discussed this specifically?

This has been debated endlessly on here. A search for "agency regulations" might get you a bit closer.

Here is one example:
http://forums.contractoruk.com/busin...4-opt-out.html

There is a guide in the members section of the PCG website.

[d000hg]

Those all seem to rely on you knowing what exactly "opting out" means. I've never actually taken a contract through an agent so I'm lost. Where's the "what the hell does opting out mean" dummies' guide?

[malvolio]

"Opting out" means that you opt to remain out of the Agency Regulations because if you don't opt out then you are automatically opted in when you may well wish to be opted out, because while opting in means you gain some illusory benefits around payment rules and handcuff clauses opting out means you should get an opted out contract which costs the agency less to administer than an opted in contract and hence you can use opting out as a lever to gain better contractual terms than if you have opted in. And it's "opted" because by default you are deemed to have opted in unless you opt out at the appropriate point which, if you miss it, means you are opted in whether or not you wanted to be opted out.

HTH

[MonzaMike]

"Opting out" means that you opt to remain out of the Agency Regulations because if you don't opt out then you are automatically opted in when you may well wish to be opted out, because while opting in means you gain some illusory benefits around payment rules and handcuff clauses opting out means you should get an opted out contract which costs the agency less to administer than an opted in contract and hence you can use opting out as a lever to gain better contractual terms than if you have opted in. And it's "opted" because by default you are deemed to have opted in unless you opt out at the appropriate point which, if you miss it, means you are opted in whether or not you wanted to be opted out.

HTH

Can you get this on a Tea Towel, like the rules of cricket?

[LisaContractorUmbrella]

"Opting out" means that you opt to remain out of the Agency Regulations because if you don't opt out then you are automatically opted in when you may well wish to be opted out, because while opting in means you gain some illusory benefits around payment rules and handcuff clauses opting out means you should get an opted out contract which costs the agency less to administer than an opted in contract and hence you can use opting out as a lever to gain better contractual terms than if you have opted in. And it's "opted" because by default you are deemed to have opted in unless you opt out at the appropriate point which, if you miss it, means you are opted in whether or not you wanted to be opted out.

HTH

Genius Mal Ever thought of going into politics?

[Not So Wise]

In simple terms the key points:

Opted in:

• Agency is "meant" to do better background checks on contractor before they introduce contractor to client. (they never do)
• Cannot delay/deny payment for work done (even if contract says otherwise, aka absence of timesheets)
• Lock out clauses (aka period until you can go direct with client after contract end) is capped at about 6/8 weeks (cannot remember exact amount atm). Once again regardless of what contract says

Opted out:

• Contract T/C's rule supreme (except where they break the law)

Only time you can opt out is before introduction to client, aka before interview (Tel/Email/face to face), majority of agencies don't get contractors to do so at this stage, thus most people who think they are opted out are actually opted in, regardless of what pieces of paper agency made them sign

Major myth about opt in/out is it affects IR35 status, but it is just that , a myth pushed by agencys.

Some say there is a benefit in certain circumstances to being opted out, but yet to hear a valid description of said circumstances. So it's pretty safe to say, for a contractor it's nearly always best to be opted in

[MaryPoppins]

In simple terms the key points:

Opted in:

• Agency is "meant" to do better background checks on contractor before they introduce contractor to client. (they never do)
• Cannot delay/deny payment for work done (even if contract says otherwise, aka absence of timesheets)
• Lock out clauses (aka period until you can go direct with client after contract end) is capped at about 6/8 weeks (cannot remember exact amount atm). Once again regardless of what contract says

Opted out:

• Contract T/C's rule supreme (except where they break the law)

Only time you can opt out is before introduction to client, aka before interview (Tel/Email/face to face), majority of agencies don't get contractors to do so at this stage, thus most people who think they are opted out are actually opted in, regardless of what pieces of paper agency made them sign

Major myth about opt in/out is it affects IR35 status, but it is just that , a myth pushed by agencys.

Some say there is a benefit in certain circumstances to being opted out, but yet to hear a valid description of said circumstances. So it's pretty safe to say, for a contractor it's nearly always best to be opted in

The 'thing' being opted in or out of is The Conduct of Employment Agencies and Employment Businesses Regulations 1976, which have been substantially rewritten, within the new 2003 Regulations.

I believe these were originally re drafted in order to protect temporary workers. An opt in/out clause was then retrospectively added for us professional contractors, and its up to us to decide what is appropriate for each contract. As Not So Wise mentions, there are the three main areas where you are covered by opting in.

Agencies nearly always push aggressively for us to opt out, as it makes their lives a lot easier. They are not meant to do so, but they most certainly do.

As also mentioned, agencies will usually try to ensure opt out occurs, by threatening a less IR35 friendly contract. They will also, as said, almost always say something like 'ok well opting in will make you less attractive to the client' or 'please be aware that by opting in you are no longer outside of IR35'. Neither of these are true - there is no grey area here, these are both simply codswallop, designed to try to ensure all contractors opt out.

A contractors decision to opt in or out to the regulations affects the relationship between contractor/agent - the client has no interest in this side of things.

Agencies usually also refuse to acknowledge the clause that states that unless a contractor opts in or out before introduction to the client - i.e. interview, they are opted in by default.

I am rarely asked before interview, and nearly always bring it up with the agency myself, in the event that I wish to opt out.

I am however always surprised by how many contractors (who work through agencies) have literally no idea what they are opting out of when they start a contract and just sign anything.

[Mr_Z]

actually opted in then - benefits

V Interesting.
So if someone only signed a form opting out once the contract was underway, and then again as part of subsequent "renewal" contracts for the same project, could you legitimately claim you were actually "opted in" if you needed to?

This could be interesting for a scenario such as the agency trying to enforce a restrictive covenant/sueing for compensation in the event of you taking a permanent role with the client or going direct through your limited? As i understand it, ltd co or consultant cant be held to such a covenant if opted in?

Any views on this much appreciated

[SueEllen]

V Interesting.
So if someone only signed a form opting out once the contract was underway, and then again as part of subsequent "renewal" contracts for the same project, could you legitimately claim you were actually "opted in" if you needed to?

Yes.

This could be interesting for a scenario such as the agency trying to enforce a restrictive covenant/sueing for compensation in the event of you taking a permanent role with the client or going direct through your limited?

There is no guarantee that the contract between the client and the agency has the same or similar terms as between the agency and the IT contractor's company.

Most client's don't want to get involved.

As i understand it, ltd co or consultant cant be held to such a covenant if opted in?

I don't know of any legal cases.