Weird contract relation between agency and client

[serraventura]

I'm quite new in the contract world.

I did my first contract in a big company where the contract was between
MY COMPANY > RECRUITMENT AGENCY > COMPANY CLIENT

Everything worked fine.

My contract has finished and now I have a offer from another company, a small one, a startup.

The recruitment agency is another one and they offered me a different contract relation which based on my previous experience it seems odd.

They want to do:

MY COMPANY > CLIENT COMPANY
RECRUITMENT COMPANY > CLIENT COMPANY

Where I will make my invoice charging my rate straight to the company (CLIENT COMPANY)

And the agency will make their invoice charging directly the CLIENT COMPANY as well

Initially it seems not to be a big deal but as I never seen it before it looks weird for me. I asked a friend more experienced as a contractor than me and he said it was weird too and he never seen this as well.

Has anyone have same experience ?
Why a agency or company would create this contract relation?

Thanks

[NotAllThere]

I've done it that way a couple of times. Not common, but so long as the client has good credit and won't need chasing and you can wait a while to get paid, why not?

[eek]

I've done it that way a couple of times. Not common, but so long as the client has good credit and won't need chasing and you can wait a while to get paid, why not?

I suspect that's how my current contract works albeit its:-

My company -> different agency acting as outsource management -> End client
Agency who found me -> different agency acting as outsource management -> End client

Upside is that I don't deal with the agency who found me who have 30 day times and instead deal with an agency that has 14 day terms and just sign things off.

[Scratch It]

Startups are naturally a higher risk in terms of getting paid. Friends of mine who have had issues with payment have generally been engaged with start ups. As mentioned above, strict credit terms based on a credit check.

[serraventura]

Startups are naturally a higher risk in terms of getting paid. Friends of mine who have had issues with payment have generally been engaged with start ups. As mentioned above, strict credit terms based on a credit check.

Well, what I could do is to give a 5 days notice as soon as I realise they won't pay me properly.

In the contract there's a 5 days notice. Any other think that I could do?

[Lance]

Well, what I could do is to give a 5 days notice as soon as I realise they won't pay me properly.

In the contract there's a 5 days notice. Any other think that I could do?

Errr.... why would you want to give any notice if you know they’re not going to pay you? Immediate termination would be more useful to you.

[northernladyuk]

Errr.... why would you want to give any notice if you know they’re not going to pay you? Immediate termination would be more useful to you.

Well you could give five days' notice to terminate the contract and then advise you are not available for wok for the next five days.

Critical is the amount of credit you give. Best I've had is via agencies with weekly invoicing + 7 days payment terms = 10 days credit.

[moggy]

Margin only for the agency to the client, could be the agency are small and large payments would hit their cash flow. Or, the client are notoriously poor with payments so the agency are reducing their risk?