Reply to: Admin fee to Opt-in to Conduct Regs

[Epiphone]

The OP hasn't been back so I suspect puppet or wind-up.

[Not So Wise]

a new agency only to find that they want to charge me an admin fee of £350 to opt-in to the conduct regulations.

They cannot charge you extra for what you are "in" by default

This doesn't seem right to me, especially given that it was not discussed (there was no mention of conduct regulations) and I have just learnt about it today in the form of a letter from the agency. I should also add that they kindly included an opt-out letter for me to sign and return.

Basically what they are doing here is trying to force/scam you to opt-out

They also state that I am automatically opted-in unless I opt out. I have already met client (interview) and this was not brought up before hand.

This is the actual regulations. Normally agencies try to deny that and try to get people to opt out after the introduction.

This agency is trying to be clever by telling the initial truth and then hitting you with a penalty so you want opt out. Funny thing is it's still immaterial as you cannot legally opt out after the introduction even if you wanted to

Am i right in thinking this is wrong or is it standard practice to try and rip off contractors every step of the way?

This particular method is not standard practice and to be honest if was me would tell them to **** off and possible report them to the relevant bodies as their actions are most certainly in a grey area if not downright dodgy. So considering that even if you opted out it would hold no legal standing they are basically they are trying to charge you for the placement, something that is very very far from accepted in this industry

So please do name and shame them so other contractors and clients (who give a damn) know to avoid them

As to the second part of your question, yes is standard practice for agencies to try to rip of contractors, but congrats you have new encountered a rip off scam

Why would you want to Opt In anyway? Opting in means you want employment rights. In other words you see yourself as an employee. This will immediately put you Inside IR35 based on your working practice. I thought the idea was to show we are geniunely in business and NOT employees????

100% incorrect, the two are in no way related

Horses for courses and make your own decision but bear in mind that being opted in creates additional work for the agency and is the main reason they ask you to opt out to begin with.

In theory opting in creates additional work for the agencies (all the checks on the contractor they are meant to perform if opted in), in practice (from my experience) it creates none because they do pretty much nothing different in or out, actually opting out creates more work, work that consists of sending the opting out form to the contractor and trying to con them into signing it.

Their main reasons for trying to get contractor to opt out is it allows them to have longer handcuff clauses and limits them on circumstances they refuse to pay the contractor for work performed

[NotAllThere]

Why would you want to Opt In anyway? Opting in means you want employment rights. In other words you see yourself as an employee. This will immediately put you Inside IR35 based on your working practice. I thought the idea was to show we are geniunely in business and NOT employees????

That's what this guy said, incorrectly. Oh that was you. How's the going self-employed through a LLP working out?

[DaveB]

Why would you want to Opt In anyway? Opting in means you want employment rights. In other words you see yourself as an employee. This will immediately put you Inside IR35 based on your working practice. I thought the idea was to show we are geniunely in business and NOT employees????

Nope, opting in or out has no implications on IR35 and has no bearing on employment rights as you are still not an employee of the agency opted in or out.

Opting out may be beneficial if you are looking to grow your business and take on additional staff yourself, otherwise opting in gives some benefits invovling guarenteed payments and hand cuff clauses.

Horses for courses and make your own decision but bear in mind that being opted in creates additional work for the agency and is the main reason they ask you to opt out to begin with.

[LA1]

Why would you want to Opt In anyway? Opting in means you want employment rights. In other words you see yourself as an employee. This will immediately put you Inside IR35 based on your working practice. I thought the idea was to show we are geniunely in business and NOT employees????

[swamp]

Hi, i'm new to contracting and have only just secured my second contract.

My first contract went without a hitch and is coming to an end now. Given this i went about securing another contract and have done so with a new agency only to find that they want to charge me an admin fee of £350 to opt-in to the conduct regulations. This doesn't seem right to me, especially given that it was not discussed (there was no mention of conduct regulations) and i have just learnt about it today in the form of a letter from the agency. I should also add that they kindly included an opt-out letter for me to sign and return.

They also state that i am automatically opted-in unless i opt out. I have already met client (interview) and this was not brought up before hand.

Am i right in thinking this is wrong or is it standard practice to try and rip off contractors every step of the way?

Thank you for your help,

CNewb

In English Contract Law, in order to charge you more for the "same scope of services" the agency must offer something in return. You are already opted in, so the agency must offer you something extra for your £350.

See Stilk v Myrick 1809 and the story of the sailors in the Baltic.

[Beefy198]

I echo what someone else has said - name and shame!

[LisaContractorUmbrella]

Forgetting all the debates about whether you can now opt-out.... I'm very sure that they can't charge an 'admin fee' for this anyway...

They can't charge the work seeker to use their services, and surely this is just a disguised way of doing that?

I am also sure that an admin fee can't be charged for this - in fact I am sure that this is why the agency regs were introduced in the first place!

[NickNick]

Very interesting post.

Can we be sure that "introduction" == interview?

What about telephone interviews?

Not sure about Telephone interviews but the Opt in / out form from my current agency stated that an interview counted as an introduction and that if I'd had an interview by the time I received the form I could not opt out.

[DaveB]

Very interesting post.

Can we be sure that "introduction" == interview?

What about telephone interviews?

IANAL but I would say that if things have got to the point where you know who they are and they know who you are then yes, you have been "introduced".

[swamp]

The bit you need is Regulation 32 Para. 9 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 which states :


(9) Subject to paragraph (12), paragraphs (1) - (8) shall not apply where a work-seeker which is a company, and the person who is or would be supplied by that work-seeker to carry out the work, agree that they should not apply, and give notice of that agreement to an employment business or agency, provided that such notice is given before the introduction or supply of the work-seeker or the person who would be supplied by the work-seeker to do the work, to the hirer.


Bold added for emphasis.

Further guidance on this comes from the Guidance on the conduct of employment agencies and employment businesses regulations 2003

Regulation 32 – Application of these regulations to work-seekers which are incorporated

The regulations automatically apply to work-seekers who are incorporated (i.e. limited company contractors). The regulations also apply to any person who is, or would be supplied by the incorporated work-seeker, to carry out the work.

However, the regulations provide that incorporated work-seekers, and those persons whose services they supply, can agree to opt out of the coverage of the regulations. In order to exercise the opt-out, both the incorporated work-seeker and the person(s) to be supplied to do the work (where appropriate), must give written notice to the agency or employment business that the regulations will not apply before they are introduced or supplied to the hirer.

Bold addded for emphasis again.

You have been introduced to the hirer already, therefore you cannot legally opt out of the regulations, whether you wanted to or not. The agency should not be charging you for this since it was their cock up in not presenting you with the choice prior to meeting the end client.

The client wants you, you have the contract, tell them to get stuffed.

Name and Shame.

Very interesting post.

Can we be sure that "introduction" == interview?

What about telephone interviews?

[TykeMerc]

They can't charge the work seeker to use their services, and surely this is just a disguised way of doing that?

Excellent point, especially since being Opted In is the default state and Opting Out is (theoretically) the unusual one.

[Beefy198]

Forgetting all the debates about whether you can now opt-out.... I'm very sure that they can't charge an 'admin fee' for this anyway...

They can't charge the work seeker to use their services, and surely this is just a disguised way of doing that?

[Fred Bloggs]

Tell them your Ltd Co has an admin fee of £700 ( payable in advance ) for changes to Opt In/Out status once a contract has been signed.

Excellent!

[rootsnall]

Tell them your Ltd Co has an admin fee of £700 ( payable in advance ) for changes to Opt In/Out status once a contract has been signed.