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  • #998878
    JohnQuixote
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    Hi everyone,

    I’m a financially hapless scientist and was hoping to get some advice from the community.

    I’m taking the majority of the current financial year off work due to illness, but have just undertaken 5 weeks of intense work for a recruitment agency and am owed around $35,000.

    I was told in my initial agreement that the hospital in which I was working would pay this money, however now that I have finished the placement I’ve been informed that the recruitment agency should pay me.

    The agency has told me that to get payed I have to join their preferred third-party company (which charges a 10% fee) who will organise my payroll. They have said they will only pay me directly the full sum if I am registered as a Company or a Trust (I’m currently registered as a Sole Trader).

    So, basically, I was hoping to get some information on registering as a Company or Trust for the sole purpose of obtaining this money from the forces of evil who are trying to siphon off as much as they can. I don’t know anything about finances or business, but was hoping someone could give me some general pointers about the costs/complexities of utilising either of these tools.

    I could always just acquiesce and go through the third party, but given how poorly the situation has been managed I’m not keen to be co-erced into using them.

    #1216477
    Paul – FS Concierge
    Keymaster
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    Hi And Welcome to Flying Solo [USER=111806]@JohnQuixote[/USER] . It is great to have you!

    Thank you for joining our community and posting today.

    I am sorry to hear of your situation.

    It is particularly sad to hear that this is coming to light now, after the work has been done.

    I paid for a trust online and it cost around $120 or so.

    It has to be said, that I did not need financial advice – this is normally recommended for new business people.

    Cheers

    #1216478
    James Millar
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    JohnQuixote, post: 261051, member: 111806 wrote:
    Hi everyone,

    I’m a financially hapless scientist and was hoping to get some advice from the community.

    I’m taking the majority of the current financial year off work due to illness, but have just undertaken 5 weeks of intense work for a recruitment agency and am owed around $35,000.

    I was told in my initial agreement that the hospital in which I was working would pay this money, however now that I have finished the placement I’ve been informed that the recruitment agency should pay me.

    The agency has told me that to get payed I have to join their preferred third-party company (which charges a 10% fee) who will organise my payroll. They have said they will only pay me directly the full sum if I am registered as a Company or a Trust (I’m currently registered as a Sole Trader).

    So, basically, I was hoping to get some information on registering as a Company or Trust for the sole purpose of obtaining this money from the forces of evil who are trying to siphon off as much as they can. I don’t know anything about finances or business, but was hoping someone could give me some general pointers about the costs/complexities of utilising either of these tools.

    I could always just acquiesce and go through the third party, but given how poorly the situation has been managed I’m not keen to be co-erced into using them.

    What state are you in John? It may be cheap enough to setup a trust with an individual trustee. Probably around $500. Then you may be able to source accounting and trust reporting for the one year and close it – probably another $1000. So I think its probably close to $1500. Company would add too much. $1500 beats their $3500 fee though.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1216479
    bb1
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    Great advise as usual by [USER=5318]@JamesMillar[/USER] , but I am thinking about your statement above ”I was told in my initial agreement that the hospital in which I was working would pay this money, however now that I have finished the placement I’ve been informed that the recruitment agency should pay me. ”. Sounds like they are now changing the rules to suit their own needs, if that is in fact what your agreement says, hold them to it, and don’t let them change the rules.

    #1216480
    James Millar
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    bb1, post: 261061, member: 53375 wrote:
    Great advise as usual by [USER=5318]@JamesMillar[/USER] , but I am thinking about your statement above ”I was told in my initial agreement that the hospital in which I was working would pay this money, however now that I have finished the placement I’ve been informed that the recruitment agency should pay me. ”. Sounds like they are now changing the rules to suit their own needs, if that is in fact what your agreement says, hold them to it, and don’t let them change the rules.

    Yeah was thinking the same. Check your contract of engagement. Often these conditions are buried away somewhere and the intent is to protect the payer from compliance exposure to PAYG withholding, Super, Workcover and Payroll tax.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1216481
    ModernDayPA
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    Hi John,
    Sorry to hear about this worrying situation.
    In my past experience working within big organisations, I have found that employees within, generally avoid arranging payment of suppliers, as it is usually quite a complex internal process filled with approvals and forms.
    I suspect that the hospital is just throwing the hot potato over to the recruitment agency, as they can’t be bothered doing what they are OBLIGATED to do, to pay their supplier (you), who has performed the services.
    If you have an agreement that states that the hospital is the employer/hirer/engaging party, then I’d push back quite heavily on the person who engaged you and advise them that you will escalate this further if they don’t get the payment process sorted out ASAP. I’d mention to them that they could be subject to internal repercussions with their internal Procurement/HR department, for engaging a contractor/employee then not following due process.
    Then if they fob you off, I’d then find out how to contact the head of HR department and head of the Procurement/Supply department and advise them of the breach in their process.

    P.S. To the point of the agency taking 10% cut, that cut usually gets charged to the employer, not deducted from the employee payment. That’s how it has always worked for me, when I’ve done temping/casual work through an agency.

    #1216482
    JacquiPryor
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    bb1, post: 261061, member: 53375 wrote:
    Great advise as usual by [USER=5318]@JamesMillar[/USER] , but I am thinking about your statement above ”I was told in my initial agreement that the hospital in which I was working would pay this money, however now that I have finished the placement I’ve been informed that the recruitment agency should pay me. ”. Sounds like they are now changing the rules to suit their own needs, if that is in fact what your agreement says, hold them to it, and don’t let them change the rules.

    Second this and others’ follow up comments. Check the terms of that initial agreement. If unsure, seek some advice from a lawyer in the space. Might cost you a couple of hundred dollars, which if found the hospital should be paying you directly is still cheaper than setting up an entity and/or paying the recruitment agency.

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