Changing Payment Terms

[BoredBloke]

I've just had a letter from my agency stating that they are about to change their payment terms. It states in the letter that after the timesheets are approve at the end ofthe month, they (the agency) get paid on the 15th day of the month by the client. They have said that they will use 'all reasonable endeavours' to make their payment to me by the 20th day of the month and payment will be sent, at the latest on the 26th day of each month.

Currently payment is made on the 20th day of the month. This reasonable endevours part suggests to me that their norm will become the 26th day of the month and they will be sitting on all that money from day 15 to 26.

What happens if I reject this change? Surely then the original T&C's apply.

[downsouth]

i'd be more concerned with the fact you are working nigh on 2 months with potentially no payment.

[RichardCranium]

I've just had a letter from my agency stating that they are about to change their payment terms.

asking if they can

It's a contract. They cannot change it unless (a) the contract says they can or (b) you let them.

It states in the letter that after the timesheets are approved at the end of the month, they (the agency) get paid on the 15th day of the month by the client.

Who cares when the agency are paid? YOU do not have a contract with the client; THEY do. For all you know, the client pays weekly. Or on the day the invoice is received. Or after 90 days. Who cares? That's not your problem.

Furthermore, one of the supposed benefits of using an agency is that they provide a factoring service: you get paid regardless of when the client pays. That's why they charge the margins they do.

What will they do if the client argues about payment for some reason for 4 months? Not pay you at all in that time?

They have said that they will use 'all reasonable endeavours'

Yeah. Right.

to make their payment to me by the 20th day of the month and payment will be sent, at the latest on the 26th day of each month.

Hmm. Does that mean payment WILL be made on the 26th EVEN IF they have not been paid by the client? Is their new wording that explicit?

If so, all they are doing is adding another 6 days to the current delay.

Currently payment is made on the 20th day of the month. This reasonable endeavours part suggests to me that their norm will become the 26th day of the month and they will be sitting on all that money from day 15 to 26.

Correct.

What happens if I reject this change? Surely then the original T&C's apply.

Correct.

They will then threaten you with serving you notice.

You then say either you will just accept the new terms, or negotiate by saying you want compensation for providing them with one week's additional free credit. You want either a lump sum (e.g. one day's rate), or them to reduce their margin by ¼%, or to increase your day rate slightly.

They will then tell you to get stuffed and that they will serve you notice.

Then it comes down to whatever your balls are made of.

Personally, I'd sulk, make it clear I'm not happy, ask them to remember I agreed without a fight, and put up with it. Hopefully, someone else will give you a better reaction to use.

[BoredBloke]

It might also be worth pointing out that this agency didn't actually get me the contract. The job was advertised, but my CV was submitted through a person I worked with. All contractors taken on 'direct' have to use this shower and their T&C's are worse than those used by the other contracts. I know that there is no chance of an increase at renewal time because that's what has happened with all the other contractors via other agencies and tbh I'm not really bothered as I'm happy enough with my current rate. However I'm not happy on them holding onto the cash I have earned for longer than what I already feel is an unreasonable amount of time - given that they are not foactoring, they state they are paid on the 15th!

I'm going to tell them that I reject this change and see what happens. The worst they can do is serve notice.

[Zippy]

Good luck TonyEnglish. I really hope you win.

[Wanderer]

I'm going to tell them that I reject this change and see what happens. The worst they can do is serve notice.

I think you will find that the agency won't serve notice without good reason unless the client lets them.

If they are paying 30 days in arrears then you should be invoicing weekly. Tell them you aren't willing to extend credit to them amounting to 2 months worth of fees.

I'd make sure you have agency failure insurance in place too....

[moorfield]

You could try also putting a settlement discount on your invoices to encourage them to cough up earlier if you need the cashflow.

[malvolio]

If they didn't get the business, they are not in a strong position. Go find another agency and get the client to novate you to them - or at least, threaten to do so. The first agency won't want to risk business by upsetting their client, after all...