Opt out / Opt in again

[hatter]

Hi all

I have read some posts hear and for a new contract decided to remain opted in.

The agency have questioned this and responded with the following and I was just after ideas on how to respond...

Ideally we like our contractors to ‘opt out’ this is for a number of reasons:

IR35- being covered by the Conduct Regulations could affect the IR35 status of contractors

Lower Rates- if a contractor does not opt out then the client may offer a lower rate to absorb the extra cost of this additional administrative process

Client Feedback- many clients have stated their preference for opted out workers. These clients think that there may be an increased risk of a co- employment if the contractor does not opt out because of the employee-type protection which is arguably provided by the Conduct Regulations.

If you choose to “opt-in” you cannot be paid for overtime which is car
ried out.

Thanks

[Clare@InTouch]

My cynical hat says the agency more likely want you to opt out because they can then restrict you from going direct for longer after you finish the contract, and they then have no obligation to pay you if they aren't paid by the client.

IR35 is neither here not there in my view. If you get to that level of detail in an investigation then you're likely in trouble anyway, you should always ensure you cover one of the major factors (control, substitution, MOO) and then this is a non-issue.

There's no employment issue that I'm aware of - you're contracted to the agency not the client. If you were deemed to be an employee then it would be an IR35 issue, and the liability would fall firmly on you (unless you're self employed rather than Limited).

Not being paid for overtime if you're opted-in, I would guess, is the agency's in-house rule rather than anything to do with the Regulations. It's an incentive for you to opt-out as they want you to.

Edit - I assume you've read this: http://www.contractoruk.com/agencies/5158.html

[northernladuk]

I have read some posts hear and for a new contract decided to remain opted in.

Bear in mind you admit you have seen some posts on this why have you not bothered to search for them and read them again?

Besides searching on the topic that has been discussed endlessly (use the google SITE: option as 'OPT' is too short for advanced search) we have a lovely sticky in the Business Contracts section (where this should be) with over 10 pages of discussion.

Have a look at this and all your questions should be answered.

[hatter]

Thanks Clare & NL.

I phoned the PCG legal and tax helpline as well, run by Abbeytax. Their advice was to opt out as it "could" be a factor in IR35.

There reason for this was due to financial risk and by opting out and not having the protection afforded to normal workers that go through agencies it shows I am taking a risk which an employee wouldn't take.

[malvolio]

Thanks Clare & NL.

I phoned the PCG legal and tax helpline as well, run by Abbeytax. Their advice was to opt out as it "could" be a factor in IR35.

There reason for this was due to financial risk and by opting out and not having the protection afforded to normal workers that go through agencies it shows I am taking a risk which an employee wouldn't take.

That's the standard PCG advice and is about acting like a business, but its only a really weak pointer either way. And as has been ointed out before the opted in protections for most if us are pretty much illusory.

However the agency dont't get a say n the matter, and their preferences are utterly irrelevant. You opting out saves them some money and risk, that's why they prefer it. It's your call whether or not you want to onblige.

Since you're in the PCG there's a detailed guide in the members' resources section of the main website. Have a read.

[TheFaQQer]

If you have a contract on offer, I assume that you have interviewed with the client.

If you have interviewed with the client, you have been introduced to the client.

If you have been introduced to the client, and you did not opt out in writing before you were introduced, then you are inside the regulations. You cannot opt out at this stage.

But don't expect an agency to understand that.

[Wanderer]

Have a look at this and all your questions should be answered.

To be fair, hatter is asking a couple of questions which aren't specifically addressed in the discussions and hatter appears to have done at least some research so credit for that. Quite aside from that I can't resist running this agencies statements past my bulltulip detector.

IR35- being covered by the Conduct Regulations could affect the IR35 status of contractors

This is agency bulltulip, as you would know from reading the sticky in the other forum so your bulltulip detector will be going off by now.

Lower Rates- if a contractor does not opt out then the client may offer a lower rate to absorb the extra cost of this additional administrative process

I've not heard that one before. You guessed it, it's more bulltulip too. The admin tasks the agent talks about are pretty basic background/identity/suitability checks which any client would reasonably expect from an agency, surely? That's their job and they should shut up and get on with it rather than arguing the toss about opting out.

Client Feedback- many clients have stated their preference for opted out workers. These clients think that there may be an increased risk of a co- employment if the contractor does not opt out because of the employee-type protection which is arguably provided by the Conduct Regulations.

More bulltulip, note the weasel words about "many clients"? What about the client you will be working for? Interesting that they are careful not to put words in your client's mouth. The fact is that the agency conduct regulations benefit the client as much as the worker (restraint of trade, temp to perm fees). If you want to stir up some trouble, ask them directly (in writing) what your client's position on the agency regulations is and see what they say. Probably mumble mumble mumble.

If you choose to “opt-in” you cannot be paid for overtime which is carried out.

That one just sends my bulltulip detector off the scale.

The fact is that if the client agrees to pay you for overtime then the agency will pass that money on to you. It's the client who tells the agency if overtime will be paid (perhaps on an hourly rate) or not (work on a daily rate "professional working day) and this will be written into your contract with the agent. Absolutely nothing to do with the agency regs.

You are working as a LTD company right? If not then you can't opt out anyway.

Write to them "After careful consideration, My LTD has decided not to opt out of the Agency Conduct Regulations".

[Old Greg]

I think this is becoming standard wording from the agency equivalent of the PCG. I had something very similar in my last contract and opted in. The contract was signed before I met the client so they did time it correctly.

It is tempting to undertake a little price discovery exercise to see how much your rate increases if you opt out. I expect the answer is £0 per day.

[TheFaQQer]

Lower Rates- if a contractor does not opt out then the client may offer a lower rate to absorb the extra cost of this additional administrative process

You could always try to turn that one round on the agency.

Firstly, ask them how much lower they think it would be.

Then tell them that your daily rate was quoted on the basis of being opted in. Since they think that being opted in would result in a lower rate of £x, tell them you expect them to cut their margin and increase your rate by that amount.

Listen to them back peddle and splutter.

[SueEllen]

Lower Rates- if a contractor does not opt out then the client may offer a lower rate to absorb the extra cost of this additional administrative process

What extra admin? The entire point of using an agency is that any checks that have to be done on the companies/people they engage for the client is that they do the checks.

This is what clients pay them for.