What is an "Opt-Out Notice"?

Under Regulation 32(9) of the Conduct of Employment Agencies and Employment Businesses Regulations (the "Conduct Regulations"), if a Limited Company Contractor (LCC) and it's Consultant both agree that the Conduct Regulations should not apply and give notice of that agreement to Technology Resourcing, provided such notice is given before introduction*, the Conduct Regulations do not apply. This notice is commonly known as an "Opt-Out Notice".

If an LCC gives Technology Resourcing an Opt-Out out notice, this reduces the level of administrative bureaucracy for Technology Resourcing and gives Technology Resourcing greater scope to charge temp-to-perm and temp-to-temp fees to the client.

* It should be noted that, between the time of opting-out and the date of commencement of supply of the services, LCC’s can opt back in (see FAQs below).

Why does Technology Resourcing recommend that LCCs opt-out of the application of the Conduct Regulations?

It is the choice of the LCC whether or not to opt-out and we recomend you seek your own advice on whether or not to opt-out. However, Technology Resourcing recommends that LCCs opt out for the following reasons:

Technology Resourcing complies with best practice and are Members of the Recruitment & Employment Confederation (a voluntary corporate membership which ensures we work to an additional Code of Conduct, over and above that required by law), which already gives sufficient protection to limited company contractors and consultants.

Technology Resourcing believes that the Conduct Regulations are designed to protect workers at the lower end of the market (for example, low paid workers in the hotel and catering industries) to ensure that they are paid a living wage, are not exploited and are told in clear terms what services the staffing company will provide them with.

Limited Company Contractors and Consultants are at the top end of the market, are highly paid and Technology Resourcing always makes them aware of the terms and conditions between them and Technology Resourcing and finds them assignments with reputable clients.

If LCCs do not opt out of the Conduct Regulations, this may compromise their tax status under IR35, ie it may increase the chances of an assignment falling within IR35. This is for the following reasons:

• the Conduct Regulations provide quasi-employment protection to contractors
• the Conduct Regulations state that the services provided by Technology Resourcing are to find assignments where the contractor acts for and "under the control" of the client. The concept of "control" is an employment indicator. When assessing whether or not an assignment falls within IR35, the Inland Revenue looks for employment indicators.
• Technology Resourcing is able to offer LCCs more assignments because some clients require opted-out contractors only, especially where clients require reassurance about workers not, whilst providing the services, undertaking any other role involving a conflict of interest (such a restriction is unlawful unless the contractor opts out).

FAQs from Contractors:

Q. Do I have to opt-out for Technology Resourcing to find me assignments?
A. No, it is your choice.

Q. I've heard that if I don't opt-out Technology Resourcing cannot impose restrictions on me going temp-to-perm or temp-to-temp, surely that’s a very good reason for me not to opt-out?
A. True, Technology Resourcing cannot restrict you going temp-to-perm or temp-to-temp if you do not opt out of the Conduct Regulations. However, most clients require Technology Resourcing to restrict contractors from taking up assignments, which may cause a conflict of interest with the assignment for that particular client. This means that Technology Resourcing would not be able to offer you assignments with those clients unless you have opted out, reducing the number of assignments open to you. In addition, if you opt out, Technology Resourcing only restricts you for the term of the assignment and for 3 months after expiry or termination of the assignment. After that you are free to provide services without restriction.

Q. Can I opt back in if I change my mind?
A. Yes, but not in relation to the assignment you are working on, only for the next assignment if it is a different "position". You must opt out before supply commences. If you have opted out, but have not commenced supply of services, you can opt back in again, but Technology Resourcing would have to give you a different contract, and you may not be able to take up the assignment if it is an "opt-out only" assignment.

Q. What's in it for Technology Resourcing if I opt-out?
A. It reduces Technology Resourcing's administrative burden and record keeping requirements and means that Technology Resourcing has greater scope to charge clients temp-to-perm and temp-to temp fees and hence recover the loss to the business. From your point of view, you will always receive excellent service from Technology Resourcing whether or not you choose to opt-out.

Q. Can I agree to opt out by email?
A. Yes. Remember that agreement to opt out must be given by the limited company contractor and the consultant.