Do you Opt Out?

[Wanderer]

Umbrellas are being bullied by agencies into getting people to opt out

Really? Since the contract is between agency and umbrella, why would they do that?

Because they have found a loophole in the system. If they refuse to use a contractor because they won't opt out then they may be acting illegally. If they refuse to allow an Umbrella onto their preferred suppliers list because they won't play ball with the opt out then there is NOTHING the umbrella can do about it and the contractor won't really care because umbrellas are two a penny.

What is the umbrella to do other than to make their default position opt out? Any why would a contractor using an umbrella ever want to opt out?

Why do you suppose HMG are consulting on the Regs and looking to change them significantly?

Maybe it's because they have been so widely abused? However the PCG are in deep denial on this point and I understand that they are now actively lobbying to have LTD company contractors taken out of the scope of the regulations completely. This is effectively a forced opt out for a group of freelancers where a significant number of them DO NOT want to opt out and this is even worse than the current situation because it removes the choice.

The PCG just keep repeating the mantra that the vast majority of their members want to opt out and this is not the case. Many of the ones who do opt out do it under duress or because they aren't in a strong enough negotiating position or because they are ignorant of the implications, believing it may impact their IR35 status (a myth happy perpetuated by the agencies with their axe to grind).

[tractor]

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Because they have found a loophole in the system. If they refuse to use a contractor because they won't opt out then they may be acting illegally. If they refuse to allow an Umbrella onto their preferred suppliers list because they won't play ball with the opt out then there is NOTHING the umbrella can do about it and the contractor won't really care because umbrellas are two a penny.

What is the umbrella to do other than to make their default position opt out? Any why would a contractor using an umbrella ever want to opt out?



Maybe it's because they have been so widely abused? However the PCG are in deep denial on this point and I understand that they are now actively lobbying to have LTD company contractors taken out of the scope of the regulations completely. This is effectively a forced opt out for a group of freelancers where a significant number of them DO NOT want to opt out and this is even worse than the current situation because it removes the choice.

The PCG just keep repeating the mantra that the vast majority of their members want to opt out and this is not the case. Many of the ones who do opt out do it under duress or because they aren't in a strong enough negotiating position or because they are ignorant of the implications, believing it may impact their IR35 status (a myth happy perpetuated by the agencies with their axe to grind).

I asked for metrics over the weekend. They do not have a clue. They told me so.

[TheFaQQer]

I don't bother one way or the other. It really isn't a deal breaker for me.

And yet you voted that you always opt out.

[Wanderer]

That is a far cry from the claims that all commentators make, esp agencies who always claim 100% opt out. From memory, I think that is little different from the results of the last poll that I can no longer find.

So for any reader who is confronted by the agency 100% claim, the ONLY evidence available is less than 50% always opt out!

The other poll is here

[speling bee]

Not disputing that at all. All I'm saying that even those who do opt out rarely get it right so their status would be open to challenge if it ever got to court. And, of course, the agency getting you to opt out when signing the final contract is a nonsense since by then you are already known to the client so any such opt out is invalid. And I remain totally unconvinced that the supposed benefits of not opting out mean anything in the real world which is why I simply ignore it as an issue.

But then again, we know what we're doing.

So, Mal, I understood that opting in (or rather not opting out) give the contractor legal recourse against an agency that will not pay when the end client does not pay the agency (for services provided of course). Whereas when opting out, a contract can be (and often is) constructed in such a way that the agency can decline to pay the contractor when the end client does not pay the agency, leaving of course the contractor unable to sue the agency or the client.

Is this incorrect?

[malvolio]

So, Mal, I understood that opting in (or rather not opting out) give the contractor legal recourse against an agency that will not pay when the end client does not pay the agency (for services provided of course). Whereas when opting out, a contract can be (and often is) constructed in such a way that the agency can decline to pay the contractor when the end client does not pay the agency, leaving of course the contractor unable to sue the agency or the client.

Is this incorrect?

No but it's only part of the story. Another bit of the contract will ensure that you don't get paid without a signed timesheet, for example. Another one allows for immediate termination for a whole host of reasons. You may limit a handcuff period to 8 weeks (whoo hoo - I can see the client loving that option if they want to take you on) but the client will almost certainly be looking at a big bill from the agency. If the client is dumping the agency, which is the other point at which a handcuff will apply, the case wouldn't stand up since there is no revenue to protect.

You don't need the "protection" the Regs give you, and they don't work for us anyway. But I'm tired of arguing the point, tbh.

[tractor]

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No but it's only part of the story. Another bit of the contract will ensure that you don't get paid without a signed timesheet, for example. Another one allows for immediate termination for a whole host of reasons. You may limit a handcuff period to 8 weeks (whoo hoo - I can see the client loving that option if they want to take you on) but the client will almost certainly be looking at a big bill from the agency. If the client is dumping the agency, which is the other point at which a handcuff will apply, the case wouldn't stand up since there is no revenue to protect.

You don't need the "protection" the Regs give you, and they don't work for us anyway. But I'm tired of arguing the point, tbh.

None of us 'need' anything. But it is nice to have the free financial protection that the regs offer if we want to avail ourselves of it. The rest of it, handcuff and everything does not even come into the equation for me. YMMV. Given a not opted out situation, it also prevents the agent including clauses like I have posted elsewhere being included in the contract. It is not just about signed timesheets or the lack thereof.

Bear in mind, this situation only came about because of a government so inept at delivering effective, workable legislation. And this argument only comes about from time to time because the government, agents, the PCG and anyone else spins the (made up) numbers to suit their argument and position.

In reality, no one knows how many opt out or not and why. How can they profess to offer metrics to support their positiona and keep a straight face I will never know. I guess it's because many, many people are chancers who know so little about their own business. How many contractors are so ignorant of IR35 they are exposed way beyond imagination. How many agents think AWR are something to do with medical tests lol etc etc ad nauseum. They all repeat the mantra their boss tells them to and don't even think to question it.

[malvolio]

None of us 'need' anything. But it is nice to have the free financial protection that the regs offer if we want to avail ourselves of it. The rest of it, handcuff and everything does not even come into the equation for me. YMMV. Given a not opted out situation, it also prevents the agent including clauses like I have posted elsewhere being included in the contract. It is not just about signed timesheets or the lack thereof.

Bear in mind, this situation only came about because of a government so inept at delivering effective, workable legislation.

An you keep banging on about free financial protection - love to know what that is, given your contract can be terminated at zero notice - and unacceptable clauses - if they are unacceptable why the hell would you sign them.

Seriously, this is going nowhere, and it's all about to change anyway.

[tractor]

...

An you keep banging on about free financial protection - love to know what that is, given your contract can be terminated at zero notice - and unacceptable clauses - if they are unacceptable why the hell would you sign them.

Seriously, this is going nowhere, and it's all about to change anyway.

Sorry, I was still editing while you were replying.

I just got finished telling you that for me, it's not about notice or handcuffs or the rest of it. It's about not having to depend upon a signed timesheet where the agent or client are being difficult, esp at the end of a contract. How many times have you read here in this very forum about people who have been ripped off for their last month's invoice? It happens most weeks to someone.

I don't sign unacceptable clauses. I have walked from one extension and one 6 monther so far this year (to be fair, in 24 years, this is the first time that I have had to), but if you don't opt out the agent cannot offer such clauses in a contract so you don't have to waste your time negotiating them out (or at the worst, walking).

[speling bee]

Sorry, I was still editing while you were replying.

I just got finished telling you that for me, it's not about notice or handcuffs or the rest of it. It's about not having to depend upon a signed timesheet where the agent or client are being difficult, esp at the end of a contract. How many times have you read here in this very forum about people who have been ripped off for their last month's invoice? It happens most weeks to someone.

I don't sign unacceptable clauses. I have walked from one extension and one 6 monther so far this year (to be fair, in 24 years, this is the first time that I have had to), but if you don't opt out the agent cannot offer such clauses in a contract so you don't have to waste your time negotiating them out (or at the worst, walking).

Exactly. I don't give a damn about the rest of it. I simply want to be able to sue my contracted client if I have provided services and they don't pay. Not opting out protects that. Maybe some people don't worry much about that risk but it can easily be 2 months + money.