QUESTION: A question on payment, or a lack thereof. My contract with a new client states that I get paid in full 30 days after my candidate starts employment. The client company gets a 90-day guarantee, but this is effective only if they pay within 30 days of the start date. I have not received payment, and I called the Controller who signed my agreement right after the 30-day mark. He told me he had not yet received his 30-day review from HR to gauge whether the candidate was working out.
I explained that we had a 90-day guarantee, and the payment was due 30 days after the start. I followed up with the Director of HR to ask him about the review and confirm that the candidate is solid. I took this assignment because I knew the CTO, and he is an honorable person who matches my client avatar. I helped him find an IT Manager, and within a week of the IT Manager’s start, the CTO resigned for health reasons. I have also been asked to backfill the CTO role and never made them engage because I want to get paid for the first placement, and I want to do right by my candidate. How would you handle that? – Felicia
ANSWER: That is a great question, and I am going to give you a few strategies to help you sort through his, but I never want to tell someone how to run their business. You are asking me how I would do it. When I was meek and timid earlier in my career, I had a mentor who coached me through a similar situation where a company was not honoring their agreement. I was trying to be flexible and nice. I remember talking to my mentor about this, and he goes, “Mike, if you let yourself get screwed here,” he goes, “What you tell this client is that you are screw-able.” He goes on to say, “That will be the tone of the whole relationship.”
I did not take his advice, by the way, and that is the exact outcome that I experienced. I wanted to play nicest the client would like me and do lots of business with me. You know what, I found that when you hold someone accountable to an agreement and they get upset with it, and Felicia, I will show you how to handle that, they actually respect it.
Often, recruiters get frustrated with clients, and they will say to me, how do I handle the situation? The client is not getting back to me. I always ask, what was the agreement on the communication protocol? Inevitably the answer is that they did not set an expectation, which is when I say that the client is technically not out of compliance. Everything in this business relies on an exchange of commitments.
Your situation is a perfect example of an exchange of commitments in the form of your contract. One, I would contact the hiring manager and let him know what is going on. You can share that you know he is an honorable person, but the company is not honoring its contract. Share what you have done to follow up thus far, that the 30-day review is still pending, and there is an agreed-upon 90-day guarantee. Emphasize that the contract does not say payment conditioned upon a 30-day review with HR; the conditions are payment is due in 30 days.
If the hiring manager cannot help solve the problem internally, I would call, not email, the HR person and say, I got your email, and we need to discuss this. I am very disappointed because you are in breach of contract.
Yes, I would be that blunt and use the words disappointed and breach of contract. I would say that you have fulfilled your service, and they are not fulfilling their obligation. And then I would ask, What do we have to do to fix this?
If they go, well, I really need to hear back. Then explain that you should have put that as a condition in the contract and remind the HR Director that they have a guarantee if the person leaves in 90 days.
At this point, you can offer a one-time extension. You can say I will extend it – let’s say you are at 30 days today – to 37 days to get it out this week, but I am just putting you on notice. You are in breach of contract.
They may be difficult and say that you need to be flexible and understanding if you want to work with them. This is where you stand your ground and say that you do not understand. You can reference the contract and ask them where the contract states payment depends on a 30-day review from HR.
And then be quiet. If they try to challenge you, repeat that you are looking for the place in the contract where payment is dependent upon a 30-day review from HR. Continue to repeat this same line until they understand that you are not going to budge.
I have walked away from clients who have not honored the contract or tried to change the terms after the agreement is in place. I am okay not working with a company where they know that my contract is a mere suggestion from my end but legal from their end. They always hold up, well, in the contract, this is what it says.
There is always a risk when you confront the client in this manner. When I reflect on the contract, anytime something is going wrong, and they are out of the bounds of the contract, then all I do is say, show me in the contract where this condition that you have newly introduced is now valid.
Great question, Felicia.
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