Contractors' Questions: Is my agency facing administration?

Contractor's Question: Is there any way I can tell if my recruitment agency is heading for administration,? Or is not getting paid last month enough of a sign? I understand that going into administration doesn't necessarily mean a company's debts won't eventually be paid in full, but I'd like to avoid this 'have to wait and see' situation.

Expert's Answer: If an IT contractor thinks their recruiter may be heading for administration, they should speak to the agency and make sure it's not a simple case of single late or lost payment. Speak to the client organisation that you're supplying if you can't get a straight answer on the issue from your recruiter, and voice your concerns so they could make enquiries on your behalf.

The expert was Anthony Brown, contract manager at Arrows Group, the technology recruiter.

Expert's Answer: It is good advice to continue to keep your 'ear to the ground' and see how the land lies from the point of view of other contractors, and parties that deal with your agency. You won't usually know with any certainty, before the agency wants you to, that the business is heading for administration.

That said, it is not a good sign if you don't get paid each month in accordance with your contract.

In the event that you don't get paid, you have two choices:

1. Discuss it with your senior representative and perhaps payment will be made, or

2. Issue a claim and obtain Judgment. The latter is sometimes an interesting option as an early judgment is something that a company facing administration may not wish to entertain and may pay at once.

The expert was Michael Coyle, managing director of Lawdit Solicitors.