Reply to: 'Paid when Paid' clause

[flipFlop]

Am I right to listen to the very loud alarm bells I can hear?

You cannot get the answer to your question here.

[Safe Collections]

Probably for the best that you swerved this gig MP.

Pay when paid clauses are extremely risky at best, at worst they are downright toxic for your cashflow.

[d000hg]

It would've been interesting to see how this progressed but I can't say I blame you MP.

[TestMangler]

Thank you.

My head usually wins out.

What a shame this is in the professional forums

[MaryPoppins]

As a future thought MP, I would run a credit check against the consultancy. That will give you more information.

(Although it sounds as if you might have done that.)

I did enough of a look around to realise the 'consultancy' is some one man band; the MD is a guy whose linkedin profile doesn't mention his 'consultancy'. It just feels a bit off, so I decided to opt out altogether.

[jmo21]

To the point where I'm not sure she knows who her business relationship is with. She feels 'it will probably be Ok'.

Eh??

She's blasé about it, but she hasn't started, so how could she possibly know if it will be ok?

And you're not sure if she knows who her business relationship is with?

Certainly doesn't fill me with confidence, never mind they don't even have a website (as you can't find it?)

[norrahe]

I've encountered this myself, though the agency in question were just covering their ar$es and I did get paid, only 45 days after invoice

If it is a new entity then I would advise caution, and good for you that the agent raised it with you too.

[cojak]

As a future thought MP, I would run a credit check against the consultancy. That will give you more information.

(Although it sounds as if you might have done that.)

[MaryPoppins]

I've looked into the 'consultancy', and emailed my polite decline to the agent for the interview. Thanks for your input people.

[Ruprect]

So you take all the risk and trust them to manage their cash flow?

No thank you ma'am

[BolshieBastard]

Please don't flame me for this post - I'd like to check my sanity on something, and would appreciate some thoughts!

I've been offered an interview with a consultancy, next week - via an agency. The agency are the only ones recruiting for this consultancy.

The agent in question has always been, frankly, fantastic. He's candid, knowledgeable, and is senior enough within his agency for me to take him seriously-ish.

I've discovered that my friend, and ex boss, has just accepted a role on the same programme of work, with this same consultancy - which has helped the agent feel the role is in the bag for me, if I'd like it.

Lovely. I ask him again what the name of the consultancy is, and he tells me. I've never heard of them, and a quick google doesn't turn up any results. Odd.

We have a second chat, and he tells me that he 'needs to let me know that the payment terms on this one are slightly odd....because the consultancy are so new.....the payment terms will be that I don't get paid until 'they' get paid.' There was some more waffle, but I heard what I needed to hear.

I ask him to confirm that my contract will be with his agency, and not the consultancy, which he does.

Am I right to listen to the very loud alarm bells I can hear? Or is this something people have accepted before?

Wouldnt touch it even with yours! AVOID!

[TheFaQQer]

You can take out insurance - Safe Collections has mentioned it before when people have said that you could factor the invoices yourself. Whether it is worthwhile to do that or not is a different matter.

Find out what the billing terms are between the client and the agency - if they are particularly bad then you'll need additional protection. I'd take professional advice and see if you can get something worded in the contract which means that you stand a better chance of getting paid if anything bad happens.

And make sure you don't opt out of the agency regulations - they give you the right to be paid for the work you do regardless of whether the agency gets paid or not.

[d000hg]

Even if there is some insurance for non-payment you can't be sure that it will be worded in such way that you will be actually protected and might end up out of pocket even deeper having paid the insurance premium - too much of a hassle IMHO

Well you would phone up the provider and say exactly what it is you want covering "does it cover that?" If they say yes but it's not 100% clear from the wording, you can ask them to put this in writing.

Much smaller scale but a friend from my dinghy sailing days wanted insurance which would cover him dropping his phone in the ocean, and followed this tack (!) for fear the insurer's definition of "accident" wouldn't cover it.

[sal]

Is such a contractual clause actually legal in the UK assuming you opt in/out (whichever it is, I always forget)?

Can't you get insurance against this sort of risk? Although if you could, I suppose the agency would have it?!

If your contract with the agency states you get paid weekly/monthly based on spreadsheets while not opted out and the agency tries to withhold payment based on not being paid by the client - your safe.
If your contract with the agency states that you only get paid at certain conditions like the end Client being paid, you are screwed.

Even if there is some insurance for non-payment you can't be sure that it will be worded in such way that you will be actually protected and might end up out of pocket even deeper having paid the insurance premium - too much of a hassle IMHO

[MaryPoppins]

What terms are the agency on? I would never go over monthly billing and 30 day terms.

I've no idea, but I'm assuming they are on the same clause hence them attempting to pass it on.