AWOL Payroll outfit Plutus says it's very solvent, but can't say when it will pay workers Stricken Australian payroll-services-for-contractors outfit Plutus Payroll is “very solvent” and has “no prospect of receivership”. Plutus came to The Register's attention earlier today after readers told us the company had “suspended” its operations due to a dispute that left it unable to pay its customers. Vulture South has …
Employees cost money. It also costs money to give them this money. Then there are the compliance and direct costs of tax and employment, equality legislation etc. It is no wonder that the smaller companies out source these aspects so they can actually get on with running the company and making the money needed to keep afloat.
There are, of course, risks in outsourcing. Never run my own company so can't really make any sensible comment beyond if you do do it, go to one of the big boys and employ someone to monitor their performance.
I'd be surprised if the actual company employing the contractors can contract out of their responsibility for paying them simply by outsourcing the job - you certainly can't outsource workplace safety, so I suspect the agencies or whoever the contractors signed their contract with will still be on the hook, regardless of whether they've already given the money to Plutus or not.
I'd be surprised if the actual company employing the contractors can contract out of their responsibility for paying them simply by outsourcing the job
Can't speak for Australia, but I know of at least one case in the UK where the contractor agency folded (turns out the directors were embezzling the money and had now skipped the country), leaving the contractors out of pocket.
The actual client stated that as far as they were concerned they'd paid, and thus their obligations had been discharged - the quarrel lay with the agency (which, to be fair, it did).
However, in that case the contractors were industrial designers - so they pointed out that until they were paid, the IP on their work remained with them and the client had no product. They'd be wide open for a lawsuit if they started shipping product containing unpaid IP.
It really depends on what you do, how much leverage you can bring against the client (who will then have paid twice until/unless they can recover their cash from the agency), and how willing you are to burn your bridges with them on future work.
I am a contractor at Peoplebank caught in this debacle and the statement quoted from their CEO is incorrect:
"Acheson had some good news for the 150 Peoplebank contractors who use Plutus for payroll, as his company has not forwarded any cash to Plutus since before April 24th."
My account manager says money was sent on the April 27th. So someone is not providing the correct information ...
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