How do we need to use iR35 with our own contracts?

There are three key areas that need looking at from an IR35 perspective within contracts which are as follows: 

1. That the agreement provides the right to substitute. 
2. That the agreement confirms that the client does not have any supervision or control over the work 
3. That there is no mutuality of obligations between the parties 

This is explained a little bit more detail below.

1. Substitution:

Whether or not the contractor engaged for the work can provide a substitute in their place can determine if  the assignment would fall inside or outside of IR35.   The contractor should be able to send a substitute to complete the work on the client’s behalf or reassign the work. If the contractor cannot make a substitution and must perform the work himself then this could bring the assignment inside IR35. If genuinely a substitute can be provided, then the contract is likely to be outside the scope of IR35.

2. Supervision, Direction and Control:

The client cannot supervise, direct or be in control of the contractor during the assignment. The key things to look out for within a contract;

• The contractor’s work will be overseen by the client and that it is specified how that will be performed. 

• that the work will be supervised by a line manager or a company employee. 
• Instruction on how the work will be performed and the ability to move between task to task.
• Any clauses that specify any rights of control or supervision over the contractor.

it is important to make sure that there is wording within the contract to indicate that the contractor will not be under the supervision, direction or control of the client.

3. Mutuality of obligation: 

When a company is obliged to provide paid work and a contractor is obliged to then accept and complete the work, this is considered mutuality of obligation. The contract must not include any mutuality of obligation; an example of this would be “exclusivity” of work clause. This would prevent the contractor from taking on other work with multiple clients at one time. 

A contractor must be able to work from project-to-project, with no obligation to carry on working for the client after the work is complete. A contractor also has the right to terminate a contract part-way through. An employee, on the other hand, can only work for one company and has an obligation to carry on working when their tasks are complete. The contractor isn’t required to take on any future work and can refuse to perform any more work, the contract should reflect this arrangement.Don’t forget to get in touch with us at info@introprotect.com if you have any questions on this or would like some help!

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It can be as simple as an assumptive request for the agreed fee, and the client pays up.

If not, things may escalate, then it’s likely you’ll be dealing with a client who gives reasons as to why they think it is okay to dodge the agreed fee.

Here are the five excuses you are most likely to find yourself up against and our advice on responding:

1. “We didn’t sign your terms” – Recruiters aren’t estate agents, so signing on the dotted line is not the only way to accept terms of business. If the client receives or is on notice of your terms, then relied on your services, they will usually apply.
   
2.  “We already knew the candidate.” – Sure, but were they already talking to them about a role before you alerted them? If not, then odds are you were the effective cause, and they must pay your fee.
   
3. “We actually hired them for a different position” – Introductions aren’t usually role specific. Even the most basic terms of business confirm this, so don’t let this excuse fly! Also, avoid agreeing on terms that do make introductions job specific!
   
4. “Another agency sent us the CV first” – It isn’t usually a first come, first served system; it’s generally about which recruiter’s introduction caused the engagement. The other agency may have been first, but which introduction was the effective cause? The key here is evidence, so be the best recruiter to the candidate to ensure they are both an information source and ambassador for you. Make sure you have tracked actions on your CRM/email, so that you can show your work to confirm it was indeed you that landed them the job. Also don’t be afraid to ask for copies of any other applications (but get the original emails, we often see inline email chains that have been conveniently amended to back up the client’s version of events).
   
5. “The candidate applied directly, and we didn’t make the connection” – Hat and funny glasses was it? New hairstyle perhaps? If they interviewed the candidate through you, then clearly this isn’t a viable excuse. It will usually be a tough defence for the client to establish.

At recLAW, we are doing everything we can to stamp out the injustice of backdoor hires and unpaid fees.

We know more than anyone that it isn’t easy to tackle these disputes yourself, so we share our experience as backdoor hire and disputed fee specialists to help recruiters.

If you find yourself struggling to get your fee from a client, give us a call and let us deal with the excuses for you.

The post 5 Top Client Excuses to Avoid Fees and How to Handle Them appeared first on IntroProtect.

There is a good chance your client didn’t mean to skip the fee, maybe they’ll just pay once they receive an invoice. Maybe they genuinely didn’t realise they needed to pay you or that you made the original introduction.

So unless you have good reason to think the client was being nefarious, always start by assuming and acting as if the client expects to pay your fee. No need to shout or scream down the phone at client or candidate, or even to hire someone like us to do that for you; you might well just get paid with a ‘congratulations on the hire’ email.

Only when things ramp up a notch do you need to consider different angles. 

It’s typically only once you find yourself hitting a wall with the excuses, know there was something dodgy going on or when you don’t want to be directly aggressive with a client (one you’d like to work with again) that you might want to consider the backdoor hire and disputed fee experts (us!) to take on the “discussion” for you. “Acting as if they will pay” can only get you so far in certain cases.

There are several reasons why you might want to hire recLAW to recover that disputed fee, but let us give you some hints:

1. Time. It’s unlikely that on top of your usual business (recruiting!), you also have time to pursue the disputed fee/prove a backdoor hire has taken place. 
   
2. Expertise. recLAW are a rare breed – set up by a lawyer with recruitment experience, we are the true experts in backdoor hires. We’ve seen and heard it all so we know how to handle all the scenarios.
   
3. Client relationship. If this is a valued client you’d like to resolve things with and work with in the future, it makes sense for you to step back from the dispute, to let someone else handle it on your behalf
   
4. Money. You want your fee and we know how to get it and here’s the bonus –  we don’t charge upfront fees or fixed costs per introduction, we only get paid when you get paid. This means zero exposure for your business. If we win you get the money you didn’t have before, and if we don’t you’re no worse off.
   
5. Balance. Negotiating disputed fees can be a fine balancing act. This goes back to our expertise and your need to keep the client relationship on track – knowing when and how to apply pressure and when to play nice. When you’ve been backdoored it is easy to act rashly but this generally just entrenches clients. We keep an open mind throughout, but most importantly remain focused on achieving the best outcome for you.

If you’re reading this and it sounds like you need us – get in touch today!

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