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Weird employment arrangement

Schnifty

Hello all,

My wife has a very weird employment arrangement and it bothers me because I think she may be being taken advantage of.

Her profession is a Coru regulated one.

She gets all her work from a company that refers clients to her, lets call them Foo Ltd. She is not employed by Foo Ltd, but acts as an independent contractor for them.

Foo Ltd advertises their services and when a new client approaches them they pass their details on to my wife. My wife then contacts the client directly and sets up appointments and provides the service to them. All invoices are issued in the name of Foo Ltd, all payments are made directly to Foo Ltd. Foo Ltd takes a 25% cut of all my wife's income. Foo Ltd is not involved in the delivery of services to the client and all they provide my wife is access to a web app for storing clients medical records and a Google Suite subscription. She has to do her own taxes. Since Covid she has worked from home doing teletherapy, before that she had to visit clients in their home.

Here are my concerns...

The 25% cut Foo Ltd takes seems excessive since they are not involved in delivering the service. I can understand them wanting a finder/introduction fee, but the fact they keep taking that cut just seems wrong - especially since she could have the same client for years.

My wife is not allowed to offer her services to anyone else. She must take all her work from Foo Ltd. If a someone approaches her directly looking for services she must refer them to Foo Ltd.

They pay her at the end of every month, but they only pay her for clients who have paid them. This month about 40% of clients did not pay by the cut off date so that means my wife's payment is 40% less than it could be.

She writes a hell of a lot of reports which go to schools, doctors, HSE etc, they must be written in her name along and not reference Foo Ltd. This is odd because most clients think they are engaging with a Foo Ltd employee, plus that is who they make payments to.

She is also required to appear in promotional material such as leaflets and on the company website. No mention of her being a contractor is ever revealed in such materials.

All this just feels wrong to me, can anyone advise me if I am right or wrong in my thinking?

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Deeec

Sorry Op your wife is not employed by Foo Ltd - she is a contractor. This arrangement is not uncommon. They subcontract the work to her and She does the work on their behalf. She either accepts the terms or she sets up fully on her own. Would she be able to get clients in her own right if she set up a website etc?

Schnifty

She could set up by herself, but there would be some time needed to build up a client base.

The exclusivity thing is the biggest issue. They have forced her to turn down certain part time job offers (e.g. working for a charity) because of that clause.

[Deleted User]

https://www.boards.ie/discussion/comment/117700814#Comment_117700814

Her options seem clear, either she continues as a contractor taking referrals, or sets up on her own and referrals go to another contractor, leaving her to build up her own client base from those who don't wish to avail of the services of Foo ltd. It is a common clause in contract work, Foo Ltd does not want one of their own contractors competing against them, though the charity work may not be in direct competition, once they allow it, it is hard to row back.

Deeec

https://www.boards.ie/discussion/comment/117700814#Comment_117700814

It does sound very unfair of them that they dont want her doing work for any other parties. In my opinion they shouldnt be doing this - they are trying to suit themselvesevery way - I think she could argue this point with them and demand earlier payment aswell. Is there anywhere else that would be willing to refer clients to her without a fee

dennyk

The exclusivity clause is potentially problematic. It's not the only factor involved in determining whether a worker is an employee or an independent contractor, but it is one of the criteria considered. That alone probably wouldn't be sufficient to make her an employee, though, and by the sound of it she meets most of the other criteria for being an independent contractor (especially if she is under no particular obligation to take on any of the clients that Foo Ltd sends her).

Assuming she is properly classified, then this really just comes down to her contract terms. If she doesn't find the terms in her current arrangement satisfactory, she's generally free to terminate her arrangement with them and find another source of clients for her business. A 25% cut might seem a bit steep, but if Foo Ltd is providing name recognition and advertising and marketing that generates a steady flow of customers and is also handling all of the billing and collections work for said customers, that might not be such a bad deal; those services do have value, after all. Your wife might end up spending just as much in terms of money and/or her own valuable time to handle those aspects of the business herself if she were working on her own. She could always sit down and run the numbers herself to see if she could do better on her own, or look around at other similar agencies to see if any would offer her a better deal than Foo Ltd (taking into account whether they would also provide the same level of service), but it's perfectly normal for an agency to take a decent cut of the income that a contractor brings in with an arrangement like that.

qwerty13

It doesn’t seem weird at all to me. Your wife gets paid as a contractor for services that Foo agree to provide to their clients. Foo is service provider here, who may be engaged to provide a service to private clients and the HSE

The cut that Foo get seems steep - except when you realise that the client base is a pretty uncertain thing, as in they’re not placing her for a year contract - they’re giving her lots of leads on short term contracts that may be quite temporary. And leads that she may not be able to generate on her own.

If your wife can’t live with Foo’s cut, then she has the chance to strike out on her own.

Victor

The poor collections would seem to be an issue. Why aren't the clients paying at every appointment? No money, no appointment.

Exclusivity looks like an issue, but if they are providing full time work, it wouldn't be such an issue. Exclusivity and not full time work would be a problem.

In writing reports, etc. does your wife have suitable insurance?

spaceHopper

She's not paying for all their back end IT associated with the web app or securing the medical records they are. She could get private clients but than how does she interacts with the HSE and pass on records.... it's a big headache that they are taking care of for her. Where I would take issues is they bill the client and take 25% and pay her. If they don't get paid on time then she's at a loss. She should put it to them, she provides the service on behalf of Foo Ltd and they pay her. She's not involved in the money collection and if they don't get paid on time that's not her problem, she still gets paid on time.