Tag Archives: Umbrella Companies

Temporary Employment Contracts

 

Temporary Employment Contracts

Temporary Employment Contracts

I’ve mentioned before that companies will often hire on a temp to perm basis but I wanted to tell you about the Temporary Employment Contracts that are generally used.

I’ve been asked in the past questions about how “it worked” and to begin with I was surprised. But then it occurred to me that for anyone that is new to ‘temping’ or ‘contracting’ these are perfectly natural questions.

If you’ve only ever worked in a Permanent Job then taking either a temp to perm job or a temporary job can be a completely new experience.

I’ll try and talk you through what you could expect.

The Contract

When you first read the contract you’ve been given, it can sometimes be a bit confusing, or unnecessarily wordy, and will seem to offer very few guarantees.

The contract that you’re given WILL BE a temporary contract, so it will be worded in such a way, to show that it’s a flexible agreement for both you and the agency.

Some of the key points may be;

The Notice Period

In some contracts there may be an inferred notice period, but no guarantees will be given. It might say something like…

“Any of the Employment Business, the Agency Worker or the Hirer may terminate the Agency Worker’s Assignment at any time without prior notice or liability.”

Or

“In the event that the contract between the Employment Business and the Hirer is terminated for any reason the Assignment shall cease with immediate effect without liability to the Agency Worker (save for payment for hours worked by the Agency Worker up to the date of termination of the Assignment).”

Effectively these clauses are saying the contract can be terminated at any point without any liability, and you will be paid up until the point you left.

Guarantees of Work

There’ll be no guarantee of continued work being offered (although temps that do a good job are normally given first refusal on new contracts coming in – when you’ve finished that one of course)

How To Get Paid

To get paid you need to communicate the hours you’ve worked to the agency, normally via a timesheet signed by an authorised representative of the company.

You will also need to submit your own invoice if you’re being paid via a limited or umbrella company.

Annual Leave

This will be as per the Working Time Directive and will normally need to be taken within the leave year, and can’t be carried over.

You would need to take any time off in agreement with the company you’re working for.

What To Do In The Event of Absence

The short answer is to let the agency know as soon as possible.

Phone, Text, Email, Send a Friend, Leave a Voice Mail, Train a Pigeon to deliver messages if you have to, but tell the agency.

What To Do Next 

Once you’ve understood the contract, the best advice I can give you about determining if the job opportunity is for you is to ASK QUESTIONS.

Ask your agents advice on anything that may be an issue to you.

If you’re worried about the length of the contract, the notice period, how often you will be paid then ASK THE QUESTION.

As a final observation, if you’re concerned about the temporary nature of the job, then maybe temping isn’t for you and you should hold out for a permanent position.

That being said many Temporary Employment Contracts, have given the candidate the chance to prove themselves, ultimately resulting in an offer of a full time position.

If you have any questions or would like further advice, then feel free to leave a comment below.

image credit

Contractors vs Temps

Contractors Jobs

Difference Between Contractors and Temps

The main service that an Employment Businesses offers is finding and supplying Temporary Workers.

Employment Agents deal with Permanent Roles, Employment Businesses deal with Temporary or Contract workers.

I’ll explain how they make their money in a moment but first let’s deal with the Temporary / Contract name.

Both Terms are used but by different types of Employment Businesses (EBs)

Free online Dictionary explains the terms as follows

tem·po·rar·y  [tem-puh-rer-ee]  Show IPA adjective, noun, plural tem·po·rar·ies.

adjective

1.

lasting, existing, serving, or effective for a time only; not permanent: a temporary need; a temporary job.

noun

2.

an office worker hired, usually through an agency on a per diem basis, for a short period of time.

con·tract  [n., adj., and usually for v. 15–17, 21, 22 kon-trakt; otherwise v. kuhn-trakt]  Show IPA

noun

1.

an agreement between two or more parties for the doing or not doing of something specified.

2.

an agreement enforceable by law.

Temporary is exactly that. The person is hired often at short notice for an undefined period of time.

For as long as the Hiring Manger needs them around, and every day work is coming in, they will need you to keep coming back and doing the work.

Once the work drops off you’ll be given notice to leave and this can range from hours to weeks.

It’s Temporary.

Contract workers are generally hired for a more defined period of time.

Often it will be to carry out a specific task, for example hired to do an Engine change, or to build 20 control panels, or write a specific piece of code, but it’s generally a longer term commitment.

I’ve seen contractors stay with a client for years often moving onto a new project as one finishes.

In both cases you’re working as a flexible worker designed to help a company realise its commercial commitments.

As a temporary worker you’re paid by the EB either on a PAYE or a Self Employed (via an Umbrella Company or your own Limited Company) basis.

In both cases there is potentially an opportunity to go Permanent.

How the Employment Business (EB) makes Money.

The Employment Business will essentially find the best person for the job, with right skills, and hire the person to the end client.

The Employment Business will agree a pay rate with you, and will then agree a charge rate with the client.

The charge rate will depend on your pay rate and costs will need to be factored in such as Tax, National Insurance deductions, Employers National Insurance, Holiday Accrual on your behalf and lastly the Profit Margin.

The contractual relationship will be two fold. The Employment Business will have a contract with the worker, as well as a contract with the client.

While working on site a Contractor supplied by an Employment Business will generally be working under the direction and supervision of the client.

The Employment Business will pay the worker their wages on a weekly basis, and will at some point receive payment from the client as a result (and that is when the employment business will make its money).

image credit

How Recruitment Agencies Pay

Recruitment Agency Pay

Who Pays You

When working for a Recruitment Agency on a Temporary or a Contract Basis it’s the Recruitment Agency that’s normally responsible for making sure you get paid.

In most cases you’ll be offered a choice about HOW you will be paid. You may be asked if you want to be paid PAYE or Limited Company.

The best option on how to be paid will depend on your own circumstances and the type of contract you’re working on.

I’ll cover the options for you as best I can but as always before making a decision you should consult your financial advisor or local tax office. (I am NOT giving financial or Tax advice here)

The Options

PAYE

This is fairly straightforward and will be familiar to you if you’ve ever been an employee of a UK company and been paid PAYE.

The net amount of wages agreed is paid to you MINUS deductions such as tax, and national insurance

Holiday is also accrued on your behalf, in line with the working time directive.

Umbrella Companies

Umbrella Companies are a commercial organisation that will provide a payment service to you.

There will be a small fee for their service which will be agreed with you at the outset.

This isn’t an uncommon way to be paid; hundreds of thousands of contractors use the services of these companies every day.

You can find out more about them at this Wiki page about Umbrella Companies.

Limited Companies

This is normally the option used for individuals that are intending to freelance on a long-term basis and build a serious business.

You would establish a limited company that would be registered at Companies House and you would become a Director of it.

Money would be paid to your company in exchange for the work you do and you would then pay yourself wages from any of the profits.

If you intend to establish a Limited Company it’s important you speak to an Accountant and your local tax office.

The Next Step

You need to check with the Employment Business what options they can offer to pay you and then decide which method is best for you.

If you have any further questions about any of these methods of payment please leave a comment and I’ll do my best to help.