Is there any legal limit on how big a cut an agency can take

[Ben81]

Hi, I have registered in the hope someone can answer this question or give me some guidance.

I have been aware for a while that on a contract I did for an agency a while ago that I was receiving less than 50% of what they were charging me out for, I am just wondering if there is a minimum % that they are required to pay to the contractor.

Apologies if this has been covered elsewhere.

Many thanks,

[d000hg]

Ouch.

[SimonMac]

Firstly no there isn't a legal limit, secondly, where you happy with the rate before you knew what there cut was? If yes why are you complaining now.

[cojak]

I'm afraid you misunderstand the nature of the contract. They are not taking a cut of your contract, they are giving you a cut of theirs.

There is no legal limit, only how savvy they are or how knowledgable and assertive the contractor is during the negotiation.

[BA to the Stars]

No, you agree how much you want to charge the agency, it is then up to the agency how much they charge the client.

[d000hg]

Firstly no there isn't a legal limit, secondly, where you happy with the rate before you knew what there cut was? If yes why are you complaining now.

I've always thought that is a truly stupid argument. Being ripped off is being ripped off.

[d000hg]

I'm afraid you misunderstand the nature of the contract. They are not taking a cut of your contract, they are giving you a cut of theirs.

Oddly while this is legally correct, neither the client nor the contractor sees it that way

[SueEllen]

Oddly while this is legally correct, neither the client nor the contractor sees it that way

The client holds the most sway in this situation.

They can actually demand to know how much the contractor is getting or specify the amount - if they know how agencies work.

[BlasterBates]

But when you agreed the rate presumably you were happy. The fact that that they take a huge cut shouldn't affect your "happiness". Whether they earn a lot or less won't make any difference to your financial well being. Lets say you complain and the client then forces the agent to take a huge cut; the agency will earn less but this will make no difference to you. If you were to go through another agency there is a very good chance that he would just simply add 20% or 30% to your rate, to get in with the client ("hey we've got a cheap contractor") so you wouldn't necessarily be any better off.

Lets say for example that an agency is taking 10%, how do you know the client isn't ripping you off by "pocketing" say 20% of what they might have been prepared to pay.

I would have absolutely no problem at all working through an agency who took 50%, because I know that I'm getting the rate I asked for.

[Ben81]

Firstly no there isn't a legal limit, secondly, where you happy with the rate before you knew what there cut was? If yes why are you complaining now.

I was happy with the rate at the time, under the understanding that I was being charged out at a lower rate, basically I had been out of the industry for a while, and this was a way back in, and the client were taking a chance on me and were being charged a lower rate because of that. As it turns out I was being charged out at a full rate and they were taking a 70% of it.

When I found out I wasn't too bothered as it was a way back into the industry, but as I am still chasing the agency for payment on invoices that are over 6 months old I was just curious if I had any legal stick to threaten them with.