Rate cut - how to deal?

[Joe Bloque]

Agent called up Friday afternoon and it went something like this

P1mp: Hi Joe, Client is interested to know if you can take 5% cut.
Me: Sorry P1mp- you've had a misleading information. There are no ratecuts - i have confirmation from my manager all extensions are on existing terms.

P1mp: I think they are regretting the decision. They are only cutting down rates for IBM and Accenture contractors.

Me: I'm really surprised they are doing this in the last week before extension.
P1mp: Yeah, they are really strange and they do things in last moment.

Me: This is an extension not 'Renewal' of the contract. As i said there are no rate cuts and terms continue to be same.
P1mp: Ok then i will get back to the cleint and tell you are interested in continuing the same terms. They are really regretting doing this.

Me: I'm sorry[Just to save P1mp further embarassment] you got this misleading email

P1mp: I will go back to the client and say you are interested in continuing on same terms. Have a lovely weekend.
Me: You too [T**t]

I haven't asked Manager abt ratecuts yet. Got to give it to this guy for 'producing' email with a client co HR email address.

Gentleman,

It's been a previlege peeping into your conversations .

My question now is. Come next extension - can i nail this guy with 'Breach of contract' citing that dodgy email.

Thank you.

[BolshieBastard]

Sounds like it could be agent BS.

Any rate cut should be communicated to you by the client. My advice would be to talk to them. Also try and get the agent to absorb part of any cut into their margin.

If you are direct, certainly but, with the usual client - agent - contractor arrangement, certainly not.

In these circumstances, discussions will be between agent and contractor.

Erm am I missing something here ? You - presumably - are not an Employee of the Client and therefore do not get "Pay" .
You have a commercial contract with a Company (Agent), unrelated to the Client , for which you invoice your fees .
If the AGENTs Client wishes to reduce their financial arrangement thats a commercial agreement between Agent and Client. Obviously the Agent will attempt to pass it all on to you - thats if the rate cut even exists.
Among your choices are :
accept everything agent says and roll over
suggest Agent reduces his commision and takes the hit / some of the hit
say no and see what happens
Ultimately its a commercial decision affecting revenue income for your Company , balanced against current economic climate , and potential for repeat work.
In addition a letter from HR saying Mr X must accept a reduction in his pay - surely smacks of an employment pointer ? In the hopefully unlikley event of the Agent not paying invoices , would end Client pay instead ? I think we know the answer to that..............

IMO yes, you are missing something. The agent gets a sum off the client. The agent pays the contractor. Its semantics to claim as a contractor you dont get 'pay.'

While the agent may take up some of the hit, if they're already on low margins, they wont entertain it.

No harm in asking though. IMO where a client wants a rate cut, they normally get it unless you can prove you're indespensible which, is pretty rare.

[Joe Bloque]

Erm am I missing something here ? You - presumably - are not an Employee of the Client and therefore do not get "Pay" .
You have a commercial contract with a Company (Agent), unrelated to the Client , for which you invoice your fees .
If the AGENTs Client wishes to reduce their financial arrangement thats a commercial agreement between Agent and Client. Obviously the Agent will attempt to pass it all on to you - thats if the rate cut even exists.
Among your choices are :
accept everything agent says and roll over
suggest Agent reduces his commision and takes the hit / some of the hit
say no and see what happens
Ultimately its a commercial decision affecting revenue income for your Company , balanced against current economic climate , and potential for repeat work.
In addition a letter from HR saying Mr X must accept a reduction in his pay - surely smacks of an employment pointer ? In the hopefully unlikley event of the Agent not paying invoices , would end Client pay instead ? I think we know the answer to that..............

Thanks rpgpgmr1. You've riased some good questions and it would be interesting to see what agent will say. But i want to know the dynamic of this relationship between my agent and the client.

First, the cut was not communicated - i dont mind that - but what gets my suspicion is why cut before second extension - when it did not matter for first extension. And both were successive extensions of 4 and 6 weeks. As i 've said i dont mind to take the hit but as Boris lashed out other day - I don't want to be a f*****g fool. Wish i 'd get such chance to speak to my agent. It would be hilarious!

Thanks for all the responses.

[pmeswani]

Jesus - spelling and grammar!!!

And Capitalisation.

[ratewhore]

One of my contractors that I Have onsite at Barclays was forced a rate cut he was the only person in the department that can do what he can do some how he negotited himself a rate increase as he threatend to walk of site ..

Jesus - spelling and grammar!!!

[Recruitment Agent]

One of my contractors that I Have onsite at Barclays was forced a rate cut he was the only person in the department that can do what he can do some how he negotited himself a rate increase as he threatend to walk of site ..

[ratewhore]

Any rate cut should be communicated to you by the client.

Rubbish.

Also try and get the agent to absorb part of any cut into their margin.

WHS

[expat]

The client may impose a condition on the agent, such as your pay rate or the amount of snow that falls next Tuesday. That's between the client and the agent.
If the agent wants to impose it on you, that is between the agent and you. You are not obliged to accept any imposition just because the agent has accepted it.

Of course you may be obliged to accept the bench instead.

The other side of this coin is that the client is effectively restricting the agent's cut, and is probably doing you a favour there, since they will probably restrict it more, and with more clout, than you will be able to.

[rpgpgmr1]

Erm am I missing something here ? You - presumably - are not an Employee of the Client and therefore do not get "Pay" .
You have a commercial contract with a Company (Agent), unrelated to the Client , for which you invoice your fees .
If the AGENTs Client wishes to reduce their financial arrangement thats a commercial agreement between Agent and Client. Obviously the Agent will attempt to pass it all on to you - thats if the rate cut even exists.
Among your choices are :
accept everything agent says and roll over
suggest Agent reduces his commision and takes the hit / some of the hit
say no and see what happens
Ultimately its a commercial decision affecting revenue income for your Company , balanced against current economic climate , and potential for repeat work.
In addition a letter from HR saying Mr X must accept a reduction in his pay - surely smacks of an employment pointer ? In the hopefully unlikley event of the Agent not paying invoices , would end Client pay instead ? I think we know the answer to that..............

[Svalbaard]

Sounds like it could be agent BS.

Any rate cut should be communicated to you by the client. My advice would be to talk to them. Also try and get the agent to absorb part of any cut into their margin.

Agree.

Alternatively, you could refuse to take the cut and see what happens. If they ask you to leave - leave. Show them you won't be f****d with and get another contract.

[swamp]

Sounds like it could be agent BS.

Any rate cut should be communicated to you by the client. My advice would be to talk to them. Also try and get the agent to absorb part of any cut into their margin.

[Torran]

I would have thought some justification would be forthcoming from HR. Have you asked why the rate is being cut?

This present client is rolling out rate cuts as it does every few years but at least they have been upfront about it.

[Lewis]

I've did my bit of searching on the fora how other people dealt with this. But want to get some opinion before i start talking to the agent.

My contract was renewed mid-Jan for a 4 weeks and now from mid-Feb to end-March. Not sure if it will go further than that. For this second extension agent produced email from HR department of client saying.

"Mr Bloque should accept 10% pay cut and his pay rate will be £300/day. Please confirm his acceptance"

My questions.

Can the client decide what *final* day rate i should receive?. Surely its client bother how much he should pay for contractors of my skills.

How much i get *paid* is between me and my agent - why clients should bother about my daily pay i get from agent?


I'm about to ask my manager whats the real story.

why client did not implement the rate cut for my first extension ?- why immediately before second extension which was only 4 weeks after the first one - out of interest i ask.

Is agent taking the p1ss?.

Considering the market i can suck it up and take the rate cut. But dont want to bend over when it may not be the real case.

Any tips to hold on to my original rate if i get to know agent playing tricks?

Thanks in advance
Joe

It is common for clients to agree the agency fee which has the effect of setting your rate. This has been the case in most places I have worked, so yes they can indirectly set your rate from the agent.

They are free to reduce what they want to pay at any time (subject to contracted notice period) and you are free to walk whenever you want (subject to contracted notice period).

None of this sounds remotely out of the ordinary to me.

[Joe Bloque]

I've did my bit of searching on the fora how other people dealt with this. But want to get some opinion before i start talking to the agent.

My contract was renewed mid-Jan for a 4 weeks and now from mid-Feb to end-March. Not sure if it will go further than that. For this second extension agent produced email from HR department of client saying.

"Mr Bloque should accept 10% pay cut and his pay rate will be £300/day. Please confirm his acceptance"

My questions.

Can the client decide what *final* day rate i should receive?. Surely its client bother how much he should pay for contractors of my skills.

How much i get *paid* is between me and my agent - why clients should bother about my daily pay i get from agent?


I'm about to ask my manager whats the real story.

why client did not implement the rate cut for my first extension ?- why immediately before second extension which was only 4 weeks after the first one - out of interest i ask.

Is agent taking the p1ss?.

Considering the market i can suck it up and take the rate cut. But dont want to bend over when it may not be the real case.

Any tips to hold on to my original rate if i get to know agent playing tricks?

Thanks in advance
Joe