Agency Legislation
Would it be worthwhile for the government to bring in agency legislation to cure a number of problems in the industry?
Would it help contractors and recruiters to get on better?
I‘ll fly a kite here and suggest ten changes that the Government could make to the way agencies operate.
Improving Agencies – Revealing Their Margin
1. They should make it compulsory for agencies to reveal their margins to both contractors and clients.
2. The law should allow contractors to go direct to their clients after a set period, e.g. a year. Agency fees should be on a sliding scale, i.e. 75% of fee after 3 months, 50% of fee after 6 months, 25% of fee after 9 months and no fee after a year.
3. They should outlaw clauses saying that contractors cannot talk to clients about new business both during, and for a set period after, the contract is over. This clause more than anything else stops contractors developing real businesses with multiple clients.
4. They should outlaw agencies pretending to have a contract opportunity for contractors in order to spam lead information out of them.
5. Agencies should be legally bound to pay contractors whether or not they have the money from the client. This should apply to both ‘opt out‘ and ‘opt in‘ contractors. (note:- this is now a fact).
Agencies in Administration
6. They should disallow directors of agencies who take their companies into administration from buying the contract assets cheaply from the administrator in order to set up a new company – especially one with a similar sounding name.
7. They should not allow directors of agencies who have taken two agencies to the wall to be directors of agencies within the industry again.
8. Legal impediments that make clients fearful of hiring contractors direct should be removed.
9. The Government have said that they want to encourage more high tech jobs and encourage small businesses. They should set up a working party to examine how this should be achieved. On this working party should be the Contractors Group IPSE.
10. Contracts should be between the end client and the contractor. The agency should have a separate contract with the supplier to receive fees from them.
Agency Legislation – IT Contractor Comment
So, what do you think, contractors and recruiters?
Is this a good idea?
Would it make the contracting industry better?
For more good advice on dealing with Agencies click on Agency Advice.
Ad – Contractor Services
If you do need an umbrella company you could try one of the following:-
Public Sector Umbrella Company
Or would you prefer to get expert advice about which umbrella company is right for your specific needs? If so fill in the form below and they will be in touch.
For all necessary business insurance, including IR35, try Business Insurance for Contractors
