Reply to: Contracts where there is a middleman who wants a cut

[northernladuk]

I spoke to someone I know working for the end client. All the people on the various projects are from the consultancy and client does not recruit. I think i am walking away from this one ….. or just go to interview to sharpen my skills. my last interview was in 2005!

What a bizarre situation. I personally wouldn't as it might be too tempting once the money is on the table. I'd just leave this one well alone. Well, apart from a call to the consultancy to discuss the position that <insert name> has offered me, just so the consultancy is aware and then walk away.

Not even something you could consider if you are desperate because the potential for this to go south with the consultancy or the person not handling it properly is huge.

Fair dincum for spotting it and calling it out.

[css_jay99]

Could it be that the consultancy cannot supply for this work as they are engaged on a SoW service only. The role is open to anyone that can fill it with no PSL and one of the consultancy employees has gotten wind and is trying to fill it? I mean, this doesn't make this situation any less stupid, but may not mean the person isn't actually defrauding his consultancy. I still don't think they'll be very happy as that employee still represents the consultancy but there is a chance the consultancy can't fill the role.

I mean, it's a long shot at guessing what's going on because it's so ridiculous but there might be a chance it's not quite as nefarious as it seems.. I use the term 'quite so' as it's still wholly wrong. Sounds like a greedy perm that's vaguely aware of the consultancy model and is having a go himself. We've seen other contractors trying it on on here and I'm sure every contractor has thought about doing it. Clearly whoever it is hasn't a clue about the inside element of it though so there is nothing about all this set up that is even worth considering.

That said, in my explanation, if the consultancy can't go for it and this guy is just being mercenary, why can't the OP go for it direct? CSS, why do you think you can't go for it direct? Have you tried speak to the client to see what they say? They might explain which will clarify what is going on with the consultancy employee.

Whatever the situation I'm with Eek and LM. I'd be contacting the consultancy as well with this information as well.

I spoke to someone I know working for the end client. All the people on the various projects are from the consultancy and client does not recruit. I think i am walking away from this one ….. or just go to interview to sharpen my skills. my last interview was in 2005!

[northernladuk]

Have you any of this in writing or email. You really need to give this information to the head of the consultancy

the other way to play this would be to get the job and then when chased for the payments send a refusal via email to him while cc’ing in the senior management. It is 100% wrong but I do wonder if there is a way you could still get the work and then remove the involvement of the third party

Could it be that the consultancy cannot supply for this work as they are engaged on a SoW service only. The role is open to anyone that can fill it with no PSL and one of the consultancy employees has gotten wind and is trying to fill it? I mean, this doesn't make this situation any less stupid, but may not mean the person isn't actually defrauding his consultancy. I still don't think they'll be very happy as that employee still represents the consultancy but there is a chance the consultancy can't fill the role.

I mean, it's a long shot at guessing what's going on because it's so ridiculous but there might be a chance it's not quite as nefarious as it seems.. I use the term 'quite so' as it's still wholly wrong. Sounds like a greedy perm that's vaguely aware of the consultancy model and is having a go himself. We've seen other contractors trying it on on here and I'm sure every contractor has thought about doing it. Clearly whoever it is hasn't a clue about the inside element of it though so there is nothing about all this set up that is even worth considering.

That said, in my explanation, if the consultancy can't go for it and this guy is just being mercenary, why can't the OP go for it direct? CSS, why do you think you can't go for it direct? Have you tried speak to the client to see what they say? They might explain which will clarify what is going on with the consultancy employee.

Whatever the situation I'm with Eek and LM. I'd be contacting the consultancy as well with this information as well.

[ladymuck]

You hit the nail on the head. He works for the consultancy who won't be privy to the arrangement so I am guessing the KID will show the higher amount, then me handing over the cut later on.

The legality is my main concern rather than the greed. My thoughts are that I should walk away

So he's working for the consultancy and yet wanting to take a cut over and above whatever the firm takes for your work? That sounds like he's defrauding his own company.

I would totally report him to management.

[eek]

You hit the nail on the head. He works for the consultancy who won't be privy to the arrangement so I am guessing the KID will show the higher amount, then me handing over the cut later on.

The legality is my main concern rather than the greed. My thoughts are that I should walk away

HVe you any of this in writing or email. You really need to give this information to the head of the consultancy

the other way to play this would be to get the job and then when chased for the payments send a refusal via email to him while cc’ing in the senior management. It is 100% wrong but I do wonder if there is a way you could still get the work and then remove the involvement of the third party

[css_jay99]

This person wanting a cut - do they work for the consultancy? Or are they going to recommend you to the consultancy and act as the fee payer in the chain, taking their cut then dealing with the PAYE/NI liability for an inside contract?

A consultancy, who is the fee payer, should be pricing in their markup to the client and telling you the rate they will pay to you with a KID illustrating the net you'll receive.

Something really feels off about this, based on the scant info you've shared.

You hit the nail on the head. He works for the consultancy who won't be privy to the arrangement so I am guessing the KID will show the higher amount, then me handing over the cut later on.

The legality is my main concern rather than the greed. My thoughts are that I should walk away

[ladymuck]

The only dodgy whiff I have is the lack/quality of information we are being given.

I meant whiffy until we knew if the 'middleman' is working for the consultancy or not.

If they are a rep of the consultancy then I agree with you and the drip feed of info is tedious. If they are going to tout the OP to the consultancy and intercept their payments in order to take a cut, then I'm still getting an unpleasant waft.

I reckon the latter is highly unlikely though.

[northernladuk]

I know the end client. No agents involved and I can't go direct. I will be working at end client via a consultancy that handles a lot of their projects/IT resources.

My limited knowledge is that he will be advocating a rate hike by e.g another £50-£100 daily to get the 'right' resource. His cut comes within that extra buffer. I got an impression he does this a lot.

Wish you bleedin told us this in the first place!

So a micro consultancy is picking up bum on seats roles with their client. This is very common. Consultancy gets on a clients PSL, wins work to deliver a service and then through chatting to the right people they start to fill random bums on seats. In the two cases where I've been in via this method there was an incumbant preferred agency who weren't very happy about the situation but it went on for years.

This is more like a standard agency/consultancy resourcing situation. You made it out like the middleman was some random contractor, not a business with fingers in the clients pie. Paints a whole different picture.

So yes, they are within their rights to charge a percentage per day as they will no doubt to be around and responsible for you on site and for handling the paperwork just like an agent.

Why did you think this is any difference than a client -> agent -> contractor situation?

They aren't taking a cut of your rate, you are getting the lions share of theirs as Mal would say. Client pays them, it's their money, they take their commission and you get the rest. On top of that you've an umbrella in the way (I assume) so again, you are getting paid by the brolly, all the rest of the finance chain is not really anything to do with you.

What are the arrangements to get paid? Brolly or are the consultancy doing your payroll?

This sounds similar to the setups the agencies used to where they employ someone to go to their client and do the contracts and pocket it themselves. Hyphen/Spring et al.

Anyway, the arrangement still has a dodgy whiff about it

The only dodgy whiff I have is the lack/quality of information we are being given.

[ladymuck]

Consultancies don't need to provide KIDS only agencies - although if an umbrella is employing you they should be providing an illustration with identical figures

How is a consultancy different to an agency when it comes to putting a bum on a seat? Off topic, I know, but to me there's often very little difference between the two so I don't see why one has to produce a KID and the other doesn't.

Anyway, the arrangement still has a dodgy whiff about it

[eek]

This person wanting a cut - do they work for the consultancy? Or are they going to recommend you to the consultancy and act as the fee payer in the chain, taking their cut then dealing with the PAYE/NI liability for an inside contract?

A consultancy, who is the fee payer, should be pricing in their markup to the client and telling you the rate they will pay to you with a KID illustrating the net you'll receive.

Something really feels off about this, based on the scant info you've shared.

Consultancies don't need to provide KIDS only agencies - although if an umbrella is employing you they should be providing an illustration with identical figures

[ladymuck]

This person wanting a cut - do they work for the consultancy? Or are they going to recommend you to the consultancy and act as the fee payer in the chain, taking their cut then dealing with the PAYE/NI liability for an inside contract?

A consultancy, who is the fee payer, should be pricing in their markup to the client and telling you the rate they will pay to you with a KID illustrating the net you'll receive.

Something really feels off about this, based on the scant info you've shared.

[css_jay99]

I know the end client. No agents involved and I can't go direct. I will be working at end client via a consultancy that handles a lot of their projects/IT resources.

My limited knowledge is that he will be advocating a rate hike by e.g another £50-£100 daily to get the 'right' resource. His cut comes within that extra buffer. I got an impression he does this a lot.

[Lance]

...So clearly from all said above, things like this happens. It's a long term contract, inside IR35 and the cut is throughout the whole gig. I plan not to stay long since inside IR35 but it just does not sit well with me at all that someone is benefiting off me in that way.

referral fees are fine for business, but not employment.
This is employment. Tell them to foxtrot oscar.

[TheDogsNads]

Fast forward to now, I am in a similar situation, person wants a cut. I would like to say no but I am just about coming out of a year long self imposed benching following a 12yr stint at 1 client.

I guess the question is if this happens a lot in contracting

12 year stint at 1 client?! Jesus. I just wonder whether some of these clients know they have a 'temporary' resource or a permie one.

Ive given a number of people direct leads to agents for roles I turned down. Never asked for a 'cut.' I clearly missed an opportunity there!

[northernladuk]

...So clearly from all said above, things like this happens. It's a long term contract, inside IR35 and the cut is throughout the whole gig. I plan not to stay long since inside IR35 but it just does not sit well with me at all that someone is benefiting off me in that way.

How much we talking here? Can you find who it is and go direct?