Agency Payment – Agency said they’ll only pay me when thy’re paid

Agency Payment to contractors
Agency Payment to contractors

Agency Payment – From Deirdre

Deirdre got her first agency payment a couple of monts ago.

I started my first contract a couple of months ago. I sent in my first invoice after a month. However, I have still not been paid by my agency.

My contract states that I should be paid within 4 weeks of presenting my invoice and that period is now up.

Every time I call them they say that the client hasn‘t paid them yet. When the client pays them they will pay me.

They said that I should speak to the client and try and get them to pay the agency so that I get paid too.

Can they do this?

Dr McLaughlin‘s IT Surgery

The short answer is No they cannot.

They are now in breach of the terms of the contract.

You could now go direct to the client if the client agreed that. However, first you would have to breach the contract between agency and client by not turning up for a day.

You could also apply to close the agency down for non-payment of your invoice.

Agency in Financial Trouble

You have to be very careful here because when agencies do this it is often because they are in some kind of financial trouble.

If they are pushing you to push the client it sounds as if this may be the case here.

What you should do is to call up the agency and say these things to them. Tell them that they are in breach of contract. Say that you will take legal action. Tell them that if you speak to the client it will not be to ask them to pay the agency but to talk to them about dumping the agency and going direct.

You will also take legal action to have the agency shut down.

Agency Can’t Pay You

This will almost certainly have the effect that is needed. That’s unless they are in such serious financial problems that they just can‘t pay you.

If this doesn‘t work then you need to take the actions described above.

The very last thing you should do is to just keep working there hoping that you eventually get paid.

Many contractors have done that in the past and have found themselves out of pocket to the tune of tens of thousands of pounds when the agency goes bust.

The agency give excuse after excuse and the contractor keeps working away thinking that very soon they will be paid.

One guy was owed £28,000 when Chamberlain Scott went bust a number of years ago.

Agency’s Financial Accounts

It might be worth getting hold of the agency‘s accounts to see what their financial situation is.

Ask your accountant to take a look.

If they are late filing their latest accounts then alarm bells should be ringing or if they are loss making.

Whatever action you take, take it quickly.

Make sure you get any agency payment whether the client pays them or not.