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browntractor
23rd July 2015, 15:12
Do agencies fund contractor payments if they are late in from end client ? To make sure the contractor gets paid on time? Is that common, or do they usually pay the contractor when the client pays the agency. ie. The agency takes on no financial risk.

Do agencies ever collect cash from end client, invest it in the short term money markets for a few weeks, and pay the contractor late... As a business model whereby the agency collects the interest on that money.

SimonMac
23rd July 2015, 15:26
Contracts are usually worded that you only get payment when the agents do

DodgyAgent
23rd July 2015, 15:28
Do agencies fund contractor payments if they are late in from end client ? To make sure the contractor gets paid on time? Is that common, or do they usually pay the contractor when the client pays the agency. ie. The agency takes on no financial risk.

Do agencies ever collect cash from end client, invest it in the short term money markets for a few weeks, and pay the contractor late... As a business model whereby the agency collects the interest on that money.

Most agencies factor their invoicing or have enough money to enable them to pay out before they are paid. Most agencies will have their payments schedule nailed down pretty well. The smaller agencies will probably pay up as soon as they have been paid.
As for the money markets you will find the more cynically greedy (and they will need to be the larger agencies for it make any impact) ones will keep the gap between receiving and paying out as long as possible.

NickFitz
23rd July 2015, 17:20
Contracts are usually worded that you only get payment when the agents do

You're being taken for a ride if your contracts say that.

I've just checked my current one, and it says nothing of the kind; in fact, it explicitly states that the agency has to make the payment on the terms set out and agreed in the relevant schedule. That schedule further states that the only circumstances under which payment to the contractor will be withheld until after payment has been received from the client is when the relevant timesheet is received by the agency more than five weeks after the period worked.

I don't recall ever having a contract that said I only get paid when the agent does, and (unlike some) I always read my contracts very carefully, so I think I would have noticed :nerd

tractor
23rd July 2015, 17:57
Contracts are usually worded that you only get payment when the agents do

I have never been offered a contract with such a clause, let alone accepted one. In many, many years. Indeed, in over 25 years, working with tiny agencies to some of the largest, I have never had a single payment late.

darmstadt
23rd July 2015, 18:10
Exactly what the previous 2 posts say, I would never accept a contract that relies on the agency getting paid first, much too risky.

meridian
23rd July 2015, 19:03
In my last contract the agency paid me on time monthly but hadn't been paid by the client for 6 months. Not a great way for them to run their business, but it was a high profile client that they wanted to keep so they didn't rock the boat too much...

DimPrawn
23rd July 2015, 19:22
Contracts are usually worded that you only get payment when the agents do

^ This.

Agent phoned me a few months ago, saying client co payment had not arrived, don't expect to get any invoices paid, tought titties. And we are employees are we HMR&C? :winker: ^ 1000

TykeMerc
23rd July 2015, 20:13
Contracts are usually worded that you only get payment when the agents do

I pay reasonably close attention to the contracts I sign, I've only seen that clause once that I can recall and I got it removed before I'd sign.

AtW
23rd July 2015, 21:17
I pay reasonably close attention to the contracts I sign, I've only seen that clause once that I can recall and I got it removed before I'd sign.

Quite.

But then again all jobs in McDonalds are like that.

EternalOptimist
23rd July 2015, 22:28
It doesn't matter what the contract says.
All that does is provide you with ammo for possible redress.

The fact is, some agencies operate in a fly-by-night way, and that can leave contractors dangling. The agencies have the whip hand and I have had two very bad experiences.
Although others have had worse


It's another factor that the legislators ignore as well
no holidays, no sick, no training and no security

browntractor
23rd July 2015, 22:44
Believe it or not, in my worst case I had 50k exposure to the agency. I was in a monthly pay cycle ,on two months arrears, and they were a month late paying. That was a bit stressy.

EternalOptimist
23rd July 2015, 22:56
Believe it or not, in my worst case I had 50k exposure to the agency. I was in a monthly pay cycle ,on two months arrears, and they were a month late paying. That was a bit stressy.

That's double my worst experience. I was strung along for a month

a month of sleepless nights. the last thing I want to hear is some balloon telling me to 'read the contract carefully'

eek
23rd July 2015, 23:03
It doesn't matter what the contract says.
All that does is provide you with ammo for possible redress.

The fact is, some agencies operate in a fly-by-night way, and that can leave contractors dangling. The agencies have the whip hand and I have had two very bad experiences.
Although others have had worse


It's another factor that the legislators ignore as well
no holidays, no sick, no training and no security

Can you pm those examples to me. We need examples for HMRC

EternalOptimist
24th July 2015, 00:27
Can you pm those examples to me. We need examples for HMRC

sorry.
I did not keep a log a diary or any notes. So it's anecdotal rather than forensic.

I used a clientco email account and endless landline phonecalls. (so no audit trail)

I do recall talking to DA at the time, and he talked about not doing business with a 'Greek agent', who was a known bandit.

plus, I did get paid in the end (unlike others.)

but I never got paid for the sleepless nights and the gut-wrenching stress

browntractor
24th July 2015, 05:45
That's double my worst experience. I was strung along for a month

a month of sleepless nights. the last thing I want to hear is some balloon telling me to 'read the contract carefully'

Yes, and another half a dozen contractors on my site had the same issue at the same time.

SueEllen
24th July 2015, 05:55
Can you pm those examples to me. We need examples for HMRC

No one else has asked for this in their evidence collecting for the consultations.

I've spoken to many contractors now who have had to threaten clients or agents with debt collection procedures.

Halo Jones
24th July 2015, 06:48
Odd, in construction legislation (The Construction Act) has made it illegal to use “pay when paid” clauses, specifically to protect the smaller companies.

Exert from the 2011 CA Amendments

"Conditional payment clauses

The previous law: provisions which make payment conditional upon receipt of payment from a third party ('pay when paid' clauses) are ineffective, unless that third party is insolvent. The Construction Act does not prohibit clauses which make payment conditional on other events, such as 'pay when certified' clauses - where payment is conditional on a certificate being issued under another contract.

The amendment: a clause will be invalid if it makes payment conditional on:

• performance of obligations under another contract; or
• a decision by any person as to whether obligations under another contract have been performed.

This is to prevent a party up the line from relying on circumstances relating to its own contract to delay payment under a separate contract - for example, the fact that an employer has not complied with its certification obligations to a main contractor cannot be used by the main contractor to deny payment to a subcontractor."

I guess with you all being loaded contractors you don’t need protection :ohwell

DodgyAgent
24th July 2015, 12:19
sorry.
I did not keep a log a diary or any notes. So it's anecdotal rather than forensic.

I used a clientco email account and endless landline phonecalls. (so no audit trail)

I do recall talking to DA at the time, and he talked about not doing business with a 'Greek agent', who was a known bandit.

plus, I did get paid in the end (unlike others.)

but I never got paid for the sleepless nights and the gut-wrenching stress

Still going I believe Software Development | IT Recruitment | Testing | Support & Maintenance | RDF Group (http://www.rdfgroup.com/)

SueEllen
24th July 2015, 13:30
Odd, in construction legislation (The Construction Act) has made it illegal to use “pay when paid” clauses, specifically to protect the smaller companies.

Exert from the 2011 CA Amendments

"Conditional payment clauses

The previous law: provisions which make payment conditional upon receipt of payment from a third party ('pay when paid' clauses) are ineffective, unless that third party is insolvent. The Construction Act does not prohibit clauses which make payment conditional on other events, such as 'pay when certified' clauses - where payment is conditional on a certificate being issued under another contract.

The amendment: a clause will be invalid if it makes payment conditional on:

•performance of obligations under another contract; or
•a decision by any person as to whether obligations under another contract have been performed.

This is to prevent a party up the line from relying on circumstances relating to its own contract to delay payment under a separate contract - for example, the fact that an employer has not complied with its certification obligations to a main contractor cannot be used by the main contractor to deny payment to a subcontractor."

I guess with you all being loaded contractors you don’t need protection :ohwell
Construction is an older industry.

Halo Jones
24th July 2015, 13:34
True, also the existence of a dedicated Act & court makes it easier to react to the needs of the day

LondonManc
24th July 2015, 14:34
Touch wood, never had a problem.

My payment agreement is with my agency, not the end client. There's a payment schedule that is adhered to, I get my timesheet and invoice to them by a certain time and they pay me. Whether that's monthly or weekly is a negotiation with the agency. How they are paid by ClientCo is of no concern to me.