Reply to: Opt in malarkey

[Not So Wise]

Therefore, you sign the contract and return it ommitting to enclose the opt-out form (i've done this several times - just tell them it's following shortly behind).

Before you know it, you're on client site, with a nice contract opted in and theres not a damn thing they can do about it

Actually you can even enclose the opt out form if you want because by that point (after introduction to client which nearly always happens before you get contract) you cannot opt out even if you wanted, no matter how many forms/contracts you sign

Just to jump in with another (probably quite dumb) opting in question - if I have already been working for a client via agency A for 6 months, then client decides to migrate all contractors to new agency B am I:

a) opted in by default as I had already been introduced to the client (although not by Agency B) before I was given an opportunity to opt out?

or b) opted out by default as they did not find me the role?

Tricky one, because in this case agency did not find you the role, thus is questionable if they are even acting as an employment business and doubt that question will be resolved until the first case it goes to court

If they are classed as employment business in this senario: you are opted in by default
If they are not classed as an employment business, whole opt in/out is irrelevant as does not apply

But to be honest, if client is forcing this move I would just remove from new contract any T&C's you do not like, like the lock out from direct clause, if agency fights it would just tell client agency is trying to screw client over by locking them into their services

[east_of_the_sun]

...

[malvolio]

Mine even went as far as putting it in the contract

Most funny when I had got the role myself and only using the agency as the client co insisted that I went via then and not direct.

Even more stupid of them then.

If you found the work not them, they are not acting as an employment business on your behalf and the regs don't even apply. Encouraging to know people understand their own business so well, isn't it.

Perhaps you should tell them their contract is illegally constituted, just for a laugh; you can't have conditions in there that are not relevant to the actual engagement. For one thing, if you did get into an IR35 debate with HMRC, the accuracy of the contract would be fairly relevant...

[JonSmile]

Mine even went as far as putting it in the contract

Most funny when I had got the role myself and only using the agency as the client co insisted that I went via then and not direct.

[tino]

Directly perhaps not, but indirectly it can have a major impact. Most agencies have different contracts/clauses depending on whether you opt in or opt out. The opt-in version is often much worse from an IR35 point of view.

Therefore, you sign the contract and return it ommitting to enclose the opt-out form (i've done this several times - just tell them it's following shortly behind).

Before you know it, you're on client site, with a nice contract opted in and theres not a damn thing they can do about it

[centurian]

Major myth about opt in/out is it affects IR35 status, but it is just that , a myth pushed by agencys.

Directly perhaps not, but indirectly it can have a major impact. Most agencies have different contracts/clauses depending on whether you opt in or opt out. The opt-in version is often much worse from an IR35 point of view.

[RichardCranium]

Summary A:

Summary B: You are what the agency says you should say you are.

[SueEllen]

V Interesting.
So if someone only signed a form opting out once the contract was underway, and then again as part of subsequent "renewal" contracts for the same project, could you legitimately claim you were actually "opted in" if you needed to?

Yes.

This could be interesting for a scenario such as the agency trying to enforce a restrictive covenant/sueing for compensation in the event of you taking a permanent role with the client or going direct through your limited?

There is no guarantee that the contract between the client and the agency has the same or similar terms as between the agency and the IT contractor's company.

Most client's don't want to get involved.

As i understand it, ltd co or consultant cant be held to such a covenant if opted in?

I don't know of any legal cases.

[Mr_Z]

actually opted in then - benefits

V Interesting.
So if someone only signed a form opting out once the contract was underway, and then again as part of subsequent "renewal" contracts for the same project, could you legitimately claim you were actually "opted in" if you needed to?

This could be interesting for a scenario such as the agency trying to enforce a restrictive covenant/sueing for compensation in the event of you taking a permanent role with the client or going direct through your limited? As i understand it, ltd co or consultant cant be held to such a covenant if opted in?

Any views on this much appreciated

[MaryPoppins]

In simple terms the key points:

Opted in:

• Agency is "meant" to do better background checks on contractor before they introduce contractor to client. (they never do)
• Cannot delay/deny payment for work done (even if contract says otherwise, aka absence of timesheets)
• Lock out clauses (aka period until you can go direct with client after contract end) is capped at about 6/8 weeks (cannot remember exact amount atm). Once again regardless of what contract says

Opted out:

• Contract T/C's rule supreme (except where they break the law)

Only time you can opt out is before introduction to client, aka before interview (Tel/Email/face to face), majority of agencies don't get contractors to do so at this stage, thus most people who think they are opted out are actually opted in, regardless of what pieces of paper agency made them sign

Major myth about opt in/out is it affects IR35 status, but it is just that , a myth pushed by agencys.

Some say there is a benefit in certain circumstances to being opted out, but yet to hear a valid description of said circumstances. So it's pretty safe to say, for a contractor it's nearly always best to be opted in

The 'thing' being opted in or out of is The Conduct of Employment Agencies and Employment Businesses Regulations 1976, which have been substantially rewritten, within the new 2003 Regulations.

I believe these were originally re drafted in order to protect temporary workers. An opt in/out clause was then retrospectively added for us professional contractors, and its up to us to decide what is appropriate for each contract. As Not So Wise mentions, there are the three main areas where you are covered by opting in.

Agencies nearly always push aggressively for us to opt out, as it makes their lives a lot easier. They are not meant to do so, but they most certainly do.

As also mentioned, agencies will usually try to ensure opt out occurs, by threatening a less IR35 friendly contract. They will also, as said, almost always say something like 'ok well opting in will make you less attractive to the client' or 'please be aware that by opting in you are no longer outside of IR35'. Neither of these are true - there is no grey area here, these are both simply codswallop, designed to try to ensure all contractors opt out.

A contractors decision to opt in or out to the regulations affects the relationship between contractor/agent - the client has no interest in this side of things.

Agencies usually also refuse to acknowledge the clause that states that unless a contractor opts in or out before introduction to the client - i.e. interview, they are opted in by default.

I am rarely asked before interview, and nearly always bring it up with the agency myself, in the event that I wish to opt out.

I am however always surprised by how many contractors (who work through agencies) have literally no idea what they are opting out of when they start a contract and just sign anything.

[Not So Wise]

In simple terms the key points:

Opted in:

• Agency is "meant" to do better background checks on contractor before they introduce contractor to client. (they never do)
• Cannot delay/deny payment for work done (even if contract says otherwise, aka absence of timesheets)
• Lock out clauses (aka period until you can go direct with client after contract end) is capped at about 6/8 weeks (cannot remember exact amount atm). Once again regardless of what contract says

Opted out:

• Contract T/C's rule supreme (except where they break the law)

Only time you can opt out is before introduction to client, aka before interview (Tel/Email/face to face), majority of agencies don't get contractors to do so at this stage, thus most people who think they are opted out are actually opted in, regardless of what pieces of paper agency made them sign

Major myth about opt in/out is it affects IR35 status, but it is just that , a myth pushed by agencys.

Some say there is a benefit in certain circumstances to being opted out, but yet to hear a valid description of said circumstances. So it's pretty safe to say, for a contractor it's nearly always best to be opted in

[LisaContractorUmbrella]

"Opting out" means that you opt to remain out of the Agency Regulations because if you don't opt out then you are automatically opted in when you may well wish to be opted out, because while opting in means you gain some illusory benefits around payment rules and handcuff clauses opting out means you should get an opted out contract which costs the agency less to administer than an opted in contract and hence you can use opting out as a lever to gain better contractual terms than if you have opted in. And it's "opted" because by default you are deemed to have opted in unless you opt out at the appropriate point which, if you miss it, means you are opted in whether or not you wanted to be opted out.

HTH

Genius Mal Ever thought of going into politics?

[MonzaMike]

"Opting out" means that you opt to remain out of the Agency Regulations because if you don't opt out then you are automatically opted in when you may well wish to be opted out, because while opting in means you gain some illusory benefits around payment rules and handcuff clauses opting out means you should get an opted out contract which costs the agency less to administer than an opted in contract and hence you can use opting out as a lever to gain better contractual terms than if you have opted in. And it's "opted" because by default you are deemed to have opted in unless you opt out at the appropriate point which, if you miss it, means you are opted in whether or not you wanted to be opted out.

HTH

Can you get this on a Tea Towel, like the rules of cricket?

[malvolio]

"Opting out" means that you opt to remain out of the Agency Regulations because if you don't opt out then you are automatically opted in when you may well wish to be opted out, because while opting in means you gain some illusory benefits around payment rules and handcuff clauses opting out means you should get an opted out contract which costs the agency less to administer than an opted in contract and hence you can use opting out as a lever to gain better contractual terms than if you have opted in. And it's "opted" because by default you are deemed to have opted in unless you opt out at the appropriate point which, if you miss it, means you are opted in whether or not you wanted to be opted out.

HTH

[d000hg]

Those all seem to rely on you knowing what exactly "opting out" means. I've never actually taken a contract through an agent so I'm lost. Where's the "what the hell does opting out mean" dummies' guide?