Contract inside IR35, via Umbrella, Agency insists on opt-out of 2003 Regs

[ladymuck]

It's extra fun when an agency tells you that opting in for an outside contract makes it an inside contract.

[northernladuk]

Pessimistic, but no doubt truthful.

Why is it pessimistic? Agencies have extra legal responsibilities if the worker opts in and most have chosen not to take that burden on for one reason or another. If the worker chooses not to, or refuses to opt out then it doesn't fit the agencies model so they just move on to the next one. It's just a question of process. They aren't the smartest bunch and rarely know what they are actually dealing with, particularly when it comes to these regs so will just tick the box and if not move on.

I'm sure some will be flexible allowing opt in, a few will begrudgingly go along with it but a majority will be opt out or no further.

To be fair though, I don't think I've seen it tested. It's just a pointless exercise and we've not seen an example where an agent says no and the worker takes it all the way. The worker generally folds. No one throws a perfectly good gig away over opt in/out choices.

[gregNoWorries]

At which point you CV will go no further or the offer is made to the next candidate along...

Pessimistic, but no doubt truthful.

[eek]

What stops the worker accepting 'opt-out' initially, and then opting-in later on?

That said, apart from making the agent liable for payment where the client doesn't pay, I'm not sure that it makes much difference for an umbrella worker.

Oh it wouldn’t make any difference to the worker at all, because 99% of the time the end client and umbrella will both have timesheets showing that the umbrella owes x times £y00 to the worker.

[northernladuk]

What stops the worker accepting 'opt-out' initially, and then opting-in later on?

That said, apart from making the agent liable for payment where the client doesn't pay, I'm not sure that it makes much difference for an umbrella worker.

Contractors can decide to opt-in even after havingopted-out, but this can only take effect following completion of the assignment to the client they opted-out with.

[Protagoras]

What stops the worker accepting 'opt-out' initially, and then opting-in later on?

That said, apart from making the agent liable for payment where the client doesn't pay, I'm not sure that it makes much difference for an umbrella worker.

[cojak]

Yep, they can just bin your CV. The only way to protect yourself is to perform due diligence on the agency and client. This won’t protect you from bad actors, but at least you can see that they (probably) won’t go bust over the duration of your contract.

I never refused the opt-out, most of them were badly written anyway.

[eek]

You cannot be made to Opt Out of the Regs. You may be given a default position to take (eg to opt out) but you don't have to accept it.

At which point you CV will go no further or the offer is made to the next candidate along...

[gregNoWorries]

You cannot be made to Opt Out of the Regs. You may be given a default position to take (eg to opt out) but you don't have to accept it.

[eek]

Why do people assume things are illegal just because they don't like them. Most companies aren't generally in the game of doing illegal things.


Google 'The Conduct of Employment Agencies and Employment Business Regulations 2003 inside contract'

Cojak and someone else looked in to this once and I believe the outcome was that the agency can chose who they want to do business with. If they want to work with opted out people to save themselves some hassle then they can.

Most agencies go for the opt out as they don't have to do more background checks. A few will accept but most won't.
In most cases the opt in/outs are handled so badly they aren't valid and I am yet to see a single issue posted on these forums where the opt in/out made an iota of difference.

I suspect I was that third person because I could never understand why an umbrella would accept the risk of employing someone when there was the possibility they would not receive the money to pay them.

Turns out (from a recent post on here) that the umbrella will try to avoid paying due to a lack of authorised timesheets. But that was when there wasn't approved timesheets. However, if the end client signed the timesheets and then went bankrupt I suspect the umbrella is holding a very big liability it would have difficulty paying.

Flipside of that is that the umbrella wouldn't have the worker if they didn't agree to the opt out so it's a delicate balancing act for them (and the other workers with that umbrella).

[northernladuk]

Out of interest what have they said regarding an umbrella? Have they given you the standard 5 or 6 companies or are they flexible with who you use? This is probably the area you are going to have to go toe to toe with them over.

[northernladuk]

Is it legal for

Why do people assume things are illegal just because they don't like them. Most companies aren't generally in the game of doing illegal things.

I had thought not, but looking at the Regs, they only specifically mention a Ltd-Co contractor, as far as I can see.

Google 'The Conduct of Employment Agencies and Employment Business Regulations 2003 inside contract'

Cojak and someone else looked in to this once and I believe the outcome was that the agency can chose who they want to do business with. If they want to work with opted out people to save themselves some hassle then they can.

Most agencies go for the opt out as they don't have to do more background checks. A few will accept but most won't.
In most cases the opt in/outs are handled so badly they aren't valid and I am yet to see a single issue posted on these forums where the opt in/out made an iota of difference.

[DocJ]

Is it legal for an Agency to insist on a contractor Opting-Out of the The Conduct of Employment Agencies and Employment Business Regulations 2003 regulations, for an inside IR35 contract, working via an Umbrella co?

I had thought not, but looking at the Regs, they only specifically mention a Ltd-Co contractor, as far as I can see.

So the Agency were keen to put me forward and I agreed, then they sent me the opt-out form which I declined to sign and have not heard from them since. It's actually no biggy really as I wasn't 100% enamoured of the opportunity, but if it *is* illegal to insist on the opt-out, I'd be inclinded to report them.
I deem () the Agency to be insisting on the opt-out.

Personally, I have always contracted as a Ltd-Co (for decades!) and been outside IR35.

What does the team think? This ought to be covered by section (32) of the Regs, clauses 9 to 13, I think.

TIA