What is the Opt Out Declaration?!

[AimeeLB]

Can someone explain to me what this opt in and out actually means? The Conduct Regulations 2003? My contractor has asked me to sign an opt out and just said that it was so that if the company offered me future work I agree to still go through the agency. Which I thought was fine, but when I read the opt out form it didn't seem to say anything to do with that so I don't understand what it is. Things I have read online sounded negative about signing them.

[MaryPoppins]

Can someone explain to me what this opt in and out actually means? The Conduct Regulations 2003? My contractor has asked me to sign an opt out and just said that it was so that if the company offered me future work I agree to still go through the agency. Which I thought was fine, but when I read the opt out form it didn't seem to say anything to do with that so I don't understand what it is. Things I have read online sounded negative about signing them.

Do a search on here for EAA Regs, or "opt in, out" or look on the PCG website.

If you've met the client already, you're opted in by default anyway.

Read up on it in time for your next contract, and never ask an agent what it means - all they care about is that you opt out of the regulations.

[kaiser78]

This seems to be a useful intro thread for you - http://forums.contractoruk.com/accou...5-opt-out.html

Hope this helps.

[kaiser78]

This seems to be a useful intro thread for you - http://forums.contractoruk.com/accou...5-opt-out.html

Hope this helps.

Somewhere off the net - recruitment agencies will have to pay the freelancers who 'opt in' in full regardless of whether they have been paid by their client. This could strengthen the case for freelancers wishing to demonstrate that they are operating outside of IR35, as there is greater financial instability in 'opting out' which could be regarded as more indicative of a self-employed status. It may therefore be harder to prove 'outside' IR35 status if you do not opt out.

These seem to be the main differences.

[MaryPoppins]

Somewhere off the net - recruitment agencies will have to pay the freelancers who 'opt in' in full regardless of whether they have been paid by their client. This could strengthen the case for freelancers wishing to demonstrate that they are operating outside of IR35, as there is greater financial instability in 'opting out' which could be regarded as more indicative of a self-employed status. It may therefore be harder to prove 'outside' IR35 status if you do not opt out.
These seem to be the main differences.

That's not strictly true, and is presumably from an agents website. When you google for the Regulations, most results are agency websites unfortunately, which are all full of mainly inaccurate information designed to encourage opt out.

[kaiser78]

That's not strictly true, and is presumably from an agents website. When you google for the Regulations, most results are agency websites unfortunately, which are all full of mainly inaccurate information designed to encourage opt out.

Fair enough, although probably explains why AimeeLb wants clarification of what opting in/out means - certainly through reading the various search results on this site alone, there are a lot of conflicting and contradicting posts and hard to gauge what is the correct reasoning.

[Wanderer]

Do a search on here for EAA Regs, or "opt in, out" or look on the PCG website.

The PCG battled long and hard to get this opt out written into the legislation. I can't see how they would provide impartial advice, indeed the advice on their website is as clear as mud. They say that they expect that most contractors would opt out but they don't give any compelling reason why. The only useful thing they say is that it makes no difference to your IR35 status.

If you opt out then the agency can refuse to pay you if the client refuses to sign your timesheets. Opting out also allows the agency to enforce extended lock-in periods whereby you can only work for the client through the agency that introduced you. Opting out also removes the limits from any temp-to-perm fee the agency can charge the client.

Do you see why the agency wants you to opt out of this? Don't opt out, there is NO reason to do so.

[MaryPoppins]

The PCG battled long and hard to get this opt out written into the legislation. I can't see how they would provide impartial advice, indeed the advice on their website is as clear as mud. They say that they expect that most contractors would opt out but they don't give any compelling reason why. The only useful thing they say is that it makes no difference to your IR35 status.

If you opt out then the agency can refuse to pay you if the client refuses to sign your timesheets. Opting out also allows the agency to enforce extended lock-in periods whereby you can only work for the client through the agency that introduced you. Opting out also removes the limits from any temp-to-perm fee the agency can charge the client.

Do you see why the agency wants you to opt out of this? Don't opt out, there is NO reason to do so.

I have got a copy of the PCG guidelines around the regulations - they are perfectly clear and concise IMO.

As mentioned on this forum, opting in can also mean some agents can (egitimately) threaten to change your contract to a non IR35 friendly contract .

EDIT: I suggested a search on the forum for OP to research what the regulations and opt in/out status mean. No one can advise whether OP should opt in or out, as we know nothing of the agency/contract.

[Not So Wise]

Somewhere off the net - recruitment agencies will have to pay the freelancers who 'opt in' in full regardless of whether they have been paid by their client. This could strengthen the case for freelancers wishing to demonstrate that they are operating outside of IR35, as there is greater financial instability in 'opting out' which could be regarded as more indicative of a self-employed status. It may therefore be harder to prove 'outside' IR35 status if you do not opt out.

These seem to be the main differences.

This is agency claptrap used to convince people to opt out
IR35 has no impact on the EAA regulations and the EAA regulations have no impact on IR35 status

From the contractor's perspective it's just setting some contract "default's" and limitations. Before the reg's would hope all contractors had a obligation to pay clause and lock out period you would negociate. The reg's just meant we did not have to negociate on these clauses on every single contract anymore

there are a lot of conflicting and contradicting posts and hard to gauge what is the correct reasoning.

For contractors there are many upsides (limited lock out period, obligation to pay) and little to no downside to opting in (unless they have something to hide if agency’s are properly following the reg’s and properly vetting contractors before submitting them to client. Which never happens anyway), for agency’s there are many many downsides, which is why they try to always get people to opt out

In all honestly, doubt there is an IT contractor agency not in complete breach of the reg’s every single day

The PCG battled long and hard to get this opt out written into the legislation. I can't see how they would provide impartial advice, indeed the advice on their website is as clear as mud.

Exactly, never seen a single real example* of why an IT contractor would want to opt out. On this matter the PCG was either hoodwinked by agency’s or just had a knee jerk reaction to whole thing thinking it was ‘another IR35’. Contractors life would have been much better if they had never fought for the opt out

As mentioned on this forum, opting in can also mean some agents can (egitimately) threaten to change your contract to a non IR35 friendly contract .
.

Their ability to do this is neither strengthened nor weakened by the Eaa reg’s, it’s called contract negotiations

@OP: As someone else stated, if you have met the client before signing you are opted in already and cannot legally opt out (well you can sign the paper but it means nothing)

*Well truthfully there is one valid example, where a contractor would place another contractor in a role (substitution clause), theoretically becoming an employment business. But then the rules would suit the second contractor and not the first, who is now effectively an "agency", where opted out it is the second contractor who can get screwed