Any contractor who has ever worked hard on a contract, only to then be paid late, will know the frustration that scenario brings.
If you’ve been fortunate enough to avoid this in your career to date as a contractor, well done! But it’s likely to be a niggling worry at the back of your mind regardless. A slight sense of relief when the sums reach your account is likely.
Thankfully, the government is stepping in to help ensure workers such as contractors are paid on time.
Large IT contractors employed by the government will now run the risk of losing their contracts if they fail to pay sub-contractors on time.
Plans are in place to make it easier for contractors to lodge a formal complaint when they are paid late.
This will force the bigwigs running these government projects to keep better tabs on payments. They will need to show data to the government to prove that they and the sub-contractors they employ are benefiting from government contracts.
The reforms have been welcomed by the Federation of Small Businesses.
“As such a large and prominent customer in the economy, the Government has a pivotal role to play in demonstrating what it is to be a good client,” said Mike Cherry, National Chairman of the federation. “It is right then that the Government today announces a package of measures aimed at clamping down on poor payment practices running through its own supply chains.”
Any contractor still operating in the public sector will be pleased to hear about the changes. How many of those are left however is another matter.
Though the government is acting in a positive way for contractors in this instance, it’s not been the case often enough of late. Reforms around late pay are all well and good, but they’re just a drop in the ocean compared to the IR35 reforms they have instigated within the public sector.