Agency charging to process wages

mncollyer

My son is working for an agency and they are charging him a fee to pay a company to process his wages, surely they should pay this fee not my son, is it even legal

Dazed_and_C0nfused

https://www.citizensadvice.org.uk/work/rights-at-work/agency-workers1/check-if-your-agency-is-paying-you-the-right-amount/

diystarter7

They need to pay the min wage and costs are on top of that. So it has to be minimum wage and the rest sould be in the T&C's of the contract along with the gross hourly rate that may be subject to NI/taxes/pensions/unions fees it.

mcpitman

mncollyer said:

My son is working for an agency and they are charging him a fee to pay a company to process his wages, surely they should pay this fee not my son, is it even legal

Yes it's legal.

Assume this is Agency, short term work? Then he requires an umbrella firm to process his PAYE and NI and also offer things like pension contributions and holday pay (if long term agency/contracting).

Unless of course he can do his own taxes or get someone to do all that weekly, for less than the fee the agency are charging.

Is it the agency charging the fee or the umbrella company?

JonVarnas

I have worked for agencies pretty much all my life and have never been charged a fee to process my wages. Sounds dodgy.

Sandtree

JonVarnas said:

I have worked for agencies pretty much all my life and have never been charged a fee to process my wages. Sounds dodgy.

Welcome to the world of IR35... in the past with the setup the OP is describing they'd have been told they were "self employed" and just handed the gross monies and have to do their own taxes

MrsStepford

Husband has worked for agencies in managerial roles. It means that the client employer pays agency and doesn't pay pension etc for employee. Yes the agencies do charge for processing wages. The person working for the agency can negotiate a deal that they're happy with. If the agency is getting feedback that the client employer is happy and their employee is building up a good rep and can be placed anywhere suitable and earn them more money they will be happy to pay a higher hourly or dily rate. 

Sandtree

MrsStepford said:
If the agency is getting feedback that the client employer is happy and their employee is building up a good rep and can be placed anywhere suitable and earn them more money they will be happy to pay a higher hourly or dily rate. 

Once you are in managerial or specialist roles it tends to be that there is an agreement between the client and the agency that the total paid to the agency will be the day/hour rate plus a set percentage - depending on exclusivity, size of client etc this can be 12-20%. There are certainly circumstances where the candidate and the agency can come to an agreement that the agency shares some of its margin with the candidate, often unbeknown to the client. 

In more volume based roles agencies tend to get given a fixed hourly/daily rate and its purely down to them what proportion they choose to offer the candidate.

It doesn't always require you to have built up a good reputation etc, it can happen off the bat where the candidate says they want £X which is above the advertised monies, the client interviews and says they like them but cannot increase the rate and so the agency has to make the choice if to take the hit on their margin or say to both client and candidate that the deal doesn't work so some more CVs will be coming across.