Opting out of EAA Act

[kate_nz]

Hi -

Would anyone mind briefly explaining to me the reasons for and against opting out of the EEA Act (when taking on a contract via an agency)?

Does this have any bearing on IR35 compliance?

Thanks,
Kate

[malvolio]

That's been done to death many times on hhere, so let's not go through it all again, please...

It has no impact at all on IR35.

Commercially, unless you are aiming to grow your business in the more traditional sense, it is marginally better to opt in, however you will get a more restrictive contract: you can offset that against better payment protection and shorter handcuff clauses. Most contractors who undertstand the whole issue fully opt-out though.

Finally, your decision and your decision only. Do not sign any pro-forma letters from agencies about it, write your own.

And read the reelvant guide on the PCG website www.pcg.org.uk (although finding it can be tricky, there's a lot of good information in there, and think about joining anyway if you haven't already)

[kate_nz]

Thanks malvolio.

I am a PGC member and am drawing up a contract based on their templates, but was not clear about whether there was any major benefit in opting out.

As it has no bearing on IR35, I'll take the path of least resistance and not opt out.

Cheers,
Kate

[interested]

Thanks malvolio.

I am a PGC member and am drawing up a contract based on their templates, but was not clear about whether there was any major benefit in opting out.

As it has no bearing on IR35, I'll take the path of least resistance and not opt out.

Cheers,
Kate

Some agencies will try and strong-arm you into opting out because they know it puts them in a worse position should they screw up and you or the client decide to transfer you to another agency.

If an agency tells you the client will only accept opted out contractors do not believe them - the client would actually probably prefer you to be opted in.

[malvolio]

Thanks malvolio.

I am a PGC member ...

Much rather you were in the PCG though...

[rootsnall]

As it has no bearing on IR35, I'll take the path of least resistance and not opt out.

The path of least resistance is to opt out as the agencies can then put various restrictive clauses into your contract such as a 12 month handcuff clause ( compared to 8 weeks if opted in ). Most agencies will make it difficult for you to stay opted in. If you do nothing ( ie. don't sign an agency opt out ) then you are automatically opted in.

[SueEllen]

The path of least resistance is to opt out as the agencies can then put various restrictive clauses into your contract such as a 12 month handcuff clause ( compared to 8 weeks if opted in ). Most agencies will make it difficult for you to stay opted in. If you do nothing ( ie. don't sign an agency opt out ) then you are automatically opted in.

Don't forget the rule about being introduced to the end client first so you can sign the opt out but it may be legally meaning less.

[Marina]

That's been done to death many times on hhere, so let's not go through it all again, please... (summary snipped)

Thanks for the summary malvolio, but it's a bit high-handed of you to try and discourage discussion of a topic which not all of us may be fully up to speed on, even if it has been covered here before.

Not all of us have photographic memories, and people come and go here, and to be honest even though I have seen one or two discussions I'm still not clear on all the pros and cons and (in practice just as important) the various parties' motivations for one over the other.

P.S. I always ops out, as my impression is agencies are not keen for contractors on their books to be opted in, and might therefore not use any who did want to opt in.

[malvolio]

Thanks for the summary malvolio, but it's a bit high-handed of you to try and discourage discussion of a topic which not all of us may be fully up to speed on, even if it has been covered here before.

Not all of us have photographic memories, and people come and go here, and to be honest even though I have seen one or two discussions I'm still not clear on all the pros and cons and (in practice just as important) the various parties' motivations for one over the other.

P.S. I always ops out, as my impression is agencies are not keen for contractors on their books to be opted in, and might therefore not use any who did want to opt in.

OK. Read the PCG's Guide to the Agency Regulations (don't think it's members only, not too sure about that...). Far more succinct and authoratative then the various discussions on here. Also, in summary, you can condense it down to what I posted originally...

Also, perhaps the bit I did omit that you have raised was that agencies have more work to do if you're opted in, so use the opt-out as a negotiating tool to get a more IR35-friendly contract.