Reply to: Standard inflationary rises in day rates for freelancers? What's right + fair here?

[Zylon]

I also think you're comparing this to an ideal that doesn't really exist. The same large companies or public-sector organisations who typically have inflationary pay rises, also often make it difficult to get any pay rises outside this - ranging from requiring an employee to find a new job offer before getting a rise, to providing no possibility at all outside of a promotion to a new job deemed to be at the next level. Smaller companies can be more sensible here, but often offer no standard pay rise at all - employees still need to demand it.

[SueEllen]

Correct. Employers are not obliged to give pay rises but of course most will.

Nope.

Why do you think so many people are on NMW?

[mhuk2016]

Exactly that.

If you feel you are being under-valued, then simply tell them what the rate is going to be. Don't negotiate.

They have a choice. Either pay it or find someone else to do it cheaper. Which introduces risks and costs to them.

Don't forget as a person who's been going in on short-notice, covering their business over a sustained period of time that you are worth a lot more to them than someone who has never worked for them before. You can go into their company and start work immediately, whereas someone new has to be brought up to speed on the company, it's culture and processes.

You don't know that the agency hasn't been increasing your charged out rate each and every year in-line with inflation ... or even to adjust to "market forces".

The worst that can happen is that they find someone else and never use you again, but that's always a risk and if you are only doing odd bits for them you might decide that's not too much of a risk.

They might hire an extra permie tomorrow and never need you again anyway.

Thank you both. Good advice and the route I am going to follow.

[mhuk2016]

That's complete bollocks.

There are only two situations where an employer is legally obliged to give an employee a pay increase:
1. If the employee is being paid national minimum wage and the amount goes up, or,
2. It is explicitly stated in the employee contract that the employer gives wage increases in a certain period.

If those don't apply, then like contractors, the employee is not entitled to a pay rise.

Like a contractor, the employee can choose to find another company to work for.

Correct. Employers are not obliged to give pay rises but of course most will.

[mhuk2016]

Maybe because they're not "your agency" but a broker at best? I.e. matching contractor company to client company and making their money from the difference between the two rates?

Forgive me if I have misunderstood the nature of the relationship in place...

Sorry I also forgot to mention that it is a PAYE gig

[Lance]

The client doesn't care what your operating costs are (aka your bills). They care that they get value for money.

Now, you could approach this like a permie and say "please sir, can I have some more, I worked late last week and don't forget that time I reminded you to buy your wife flowers for your anniversary".

Or, you could think like a business and advise the client/agency that you're conducting an annual review of your charges and inform them that there will be a x% increase from the next renewal date. You set x% a little high and expect to be knocked back a little.

What you absolutely can't expect is a nice, tidy, annual % increase (like a permie might get). If you want a rate increase, you have to ask for it and be prepared to explain why you deserve it (because, contrary to what I said above, clients think you're a permie but a cheap one without all the extra baggage).

I'd take it one stage further than that. Tell them that you're seeing high demand right now and can command a higher price for your skills. The beauty of that is they may well see that they cannot replace you for the same money.
It's then about a market place not increasing costs

[tomtomagain]

Why are you whinging? If you're in business for yourself then act like it. If Virgin put your broadband fee up they don't come cap in hand do they - they send you a letter saying the price is £X from DATE and if you don't like it you can terminate the contract.

Just tell whoever is paying your invoices that due to market forces/inflation/Madam Spanky putting her prices up that your rate is £Y from DATE.

Exactly that.

If you feel you are being under-valued, then simply tell them what the rate is going to be. Don't negotiate.

They have a choice. Either pay it or find someone else to do it cheaper. Which introduces risks and costs to them.

Don't forget as a person who's been going in on short-notice, covering their business over a sustained period of time that you are worth a lot more to them than someone who has never worked for them before. You can go into their company and start work immediately, whereas someone new has to be brought up to speed on the company, it's culture and processes.

You don't know that the agency hasn't been increasing your charged out rate each and every year in-line with inflation ... or even to adjust to "market forces".

The worst that can happen is that they find someone else and never use you again, but that's always a risk and if you are only doing odd bits for them you might decide that's not too much of a risk.

They might hire an extra permie tomorrow and never need you again anyway.

[Epiphone]

Why are you whinging? If you're in business for yourself then act like it. If Virgin put your broadband fee up they don't come cap in hand do they - they send you a letter saying the price is £X from DATE and if you don't like it you can terminate the contract.

Just tell whoever is paying your invoices that due to market forces/inflation/Madam Spanky putting her prices up that your rate is £Y from DATE.

[CatOnMat]

Admittedly with inflation at below 2% the case is somewhat weak but the criteria of demotion or a pay cut can be satisfied by not receiving a cost of living rise. It has to be seen within the context of your case, which obviously requires proving the motivation of the employer.

so sayeth my text book on Human Resources Management admittedly from a period when inflation was somewhat higher.

AFAIK there is no legal entitlement to cost of living rises in the UK except for the cases mentioned by SueEllen - there may be a case for discrimination e.g. if all the men were given a rise and all the women weren't, but that's way different from what we're talking about in the OP's case.

[BlasterBates]

That is not correct. At least in the UK. Are you thinking of another country?

Admittedly with inflation at below 2% the case is somewhat weak but the criteria of demotion or a pay cut can be satisfied by not receiving a cost of living rise. It has to be seen within the context of your case, which obviously requires proving the motivation of the employer.

so sayeth my text book on Human Resources Management admittedly from a period when inflation was somewhat higher.

[BrilloPad]

Well OK if the employer does that to all employees or a substantial number of employees that would be legal but he can't single out individuals, that can be construed as constructive dismissal.

That is not correct. At least in the UK. Are you thinking of another country?

[BlasterBates]

That's complete bollocks.

There are only two situations where an employer is legally obliged to give an employee a pay increase:
1. If the employee is being paid national minimum wage and the amount goes up, or,
2. It is explicitly stated in the employee contract that the employer gives wage increases in a certain period.

If those don't apply, then like contractors, the employee is not entitled to a pay rise.

Like a contractor, the employee can choose to find another company to work for.

Well OK if the employer does that to all employees or a substantial number of employees that would be legal but he can't single out individuals, that can be construed as constructive dismissal.

[northernladuk]

All the above. The problem is you not understand what you are and the relationship between you and the agent.
It all results in what I expect to be you having your pants well and truely pulled down by them for 5 years!

[SueEllen]

The difference between a permie and a contractor is that legally, not giving an annual cost of living pay rise to an employee is a pay cut with all the implications, i.e. they can be taken to court and are effectively in breach of contract by not giving a pay rise. As a contractor there are no legal obligations, which means it is up to you to negotiate a rate rise.

That's complete bollocks.

There are only two situations where an employer is legally obliged to give an employee a pay increase:
1. If the employee is being paid national minimum wage and the amount goes up, or,
2. It is explicitly stated in the employee contract that the employer gives wage increases in a certain period.

If those don't apply, then like contractors, the employee is not entitled to a pay rise.

Like a contractor, the employee can choose to find another company to work for.

[BlasterBates]

The difference between a permie and a contractor is that legally, not giving an annual cost of living pay rise to an employee is a pay cut with all the implications, i.e. they can be taken to court and are effectively in breach of contract by not giving a pay rise. As a contractor there are no legal obligations, which means it is up to you to negotiate a rate rise.