Agency cut my rate before I started the contract – IT Contractor

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Agency Cut My Rate
Agency Cut My Rate for IT Contract

Agency Cut My Rate

Norman contacted us asking our advice after he said that his ‘agency cut my rate’.

Passed the Interview

I answered a job ad on one of the job boards which was for £400 a day for a contract that is a pretty near match for me.

I went to the interview and sailed through.

Then the agency told me that although the client wanted me, they wouldn‘t pay the rate that I was asking for.

New Agency Dirty Trick
New Agency Dirty Trick on IT Contractor

Advertised Rate

I said that this was the rate that was advertised.

The agency said this was because that was how much they thought the client would pay but they were not able to pay it.

They told me that they could only pay £350 a day. So, the agency cut my rate.

I argued with them but as I didn‘t have any other contract lined up I had to agree and signed the contract.

They did get me to opt out of the Agency Workers Directive but that was when I was signing the contract.

I have started working there and now find that the other guys there are working at the rate advertised, i.e. £400 a day. Some of them are from the same agency as I am.

They said that the agency tried it on with them as well but they refused to take a cut.

The agency cut my rate. What can I do?

Dr. McLaughlin’s IT Contractor Surgery

Well, first of all, they made a big mistake by not getting you to opt out prior to the interview.

Therefore you are not opted out and when it comes to renewal time (provided you get one) you can simply pay the agency fee and go direct – provided the client will let you.

Contract Rate Cut
Contract Rate Cut by Client

Even if you don‘t want to go this route, this is ammunition for you.

Recruitment Agency Lied

Secondly, the agency actually lied to you.

If they had simply cut you down prior to going to the interview that would have been fine and you could have had no complaints.

However, the agency almost certainly lied to you when they said that the client wouldn‘t pay the advertised rate.

They are obviously paying it to other contractors at the site.

There is a slim chance that they said they would pay it for the others but wanted you cheaper – but that is highly unlikely – especially as the other contractors said they tried it on with them too.

Find Out Rate from Client

So, what should you do?

It would be good if you could ascertain from the client (or a secretary who has the info) whether you are on the same rate as the others.

However, this is fraught with a certain amount of danger as clients don‘t like to get involved in disputes normally between contractor and agency.

IT Contract Rates
IT Contract Market Rates

Advertised Rate for Contract

I would say that the first step is to contact the agency and bluff it.

Say that you have found out that the client is paying exactly the same for you as the others who are on the advertised rate of £400.

Don‘t tell them how you ‘found out‘ this info.

Keep them thinking.

Then demand to be put on this rate.

Agency Commission

It is likely that the agency isn‘t privy to all of these shenanigans and it is just the agent himself or herself acting on their own.

The more they can screw out of you the bigger the agency commission they can get and the commission is usually on a rising basis stretching from 10% as high as 50% for meeting the top targets they are set monthly or quarterly.

Tell the Agency Boss

Threaten to contact the head of the agency to tell them that one of their agents lied to you.

Don‘t just threaten it, go ahead and do it.

Agencies, especially those on the stock market, are very careful about being ‘above water‘ and may not want anything to rock that – especially by a rogue agent.

Of course, if the agent has got away with it they wouldn‘t be worried but if it is actually pointed out to them then they may act differently.

good rates from a contract
Good Rates – How to get them from a contract

Hopefully the threat of it will be enough to get you the full rate.

Agency Cut My Rate – Threaten to Tell The Client

Also, threaten to tell the client that the agency are paying less for you and that he or she lied to you.

This stands a good chance of working but don‘t follow this one through.

All the client wants is for you to do the work and doesn‘t want to be involved in any hassle – unless, of course, it was a contractor who hired you.

Contract Renewal Time

By doing either or both of these things you stand a good chance of getting that raise – or some of it anyway.

You may have to compromise.

However, even if you don‘t, let them know that at contract renewal time you will expect to go up to the rate that the others are getting.

Go Direct to the Client

Ask the client if they allow contractors who are not opted out to go direct.

If they do then you‘re laughing.

Company Cut My Rate
Company Cut My Rate by 20%

You may find yourself on £450 to £500 a day at renewal time.

If they don‘t, tell the agency that they got it wrong by sending you to an interview without signing an opt out cause and tell them that you will be going direct to the client at renewal time unless they up you to the rate everyone else is on.

By hook or by crook you can claw this money back.

Good luck!

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