Tutors and Agencies – the ‘old’ way
As a Tutor you probably work with Tutor Agencies.
The Tutor Agency finds clients/parents who are looking for tutors. The Tutor Agency introduces those clients to you. You provide the tutoring service. The Tutor Agency bills the client for
- your fee AND
- their (Tutor Agency) fee or commission (payment for finding the clients and any other services)
The client pays the Tutor Agency. They keep their own fee. They then pay you.
It’s an arrangement that’s worked well for a long time. Unfortunately, it’s probably going to have to change.
As a result of a recent legal case, Tutor Agencies must review the way they work. Agencies must review whether they are operating as a Tutor Business or Tutor Agency.
Generally, a Tutor Agency is
- An Employment Business if they are a ‘people supplier’. They employ or engage (contract with tutors who operate their own business). The Employment Business is directly responsible for providing tutoring. The parent/client contracts with the Employment Business.
- Employment Agency if they are a ‘people finder’ who finds tutors for parents/clients. The Employment Agency does not employ or engage tutors. They are NOT directly responsible for providing tutoring. Instead, you, the tutor, has an agreement with the parent/client. The tutor invoices the parent/client for the tutor service. The Employment Agency invoices the parent/client for their own fees.
It’s not quite that straightforward. Both business models mean complying with strict legal ‘rules’. For a Tutor Agency that’s operated in the ‘old’ way, many of the rules will be new.
So how does that affect me?
Following a recent Court case, these ‘rules’ will mean that a Tutor Agency must review how their business is run. They need to review their entire business model. Some agencies might decide they need to start operating as both an Employment Business and an Employment Agency if they offer different services.
For most agencies it will mean changes in how they operate.
So what do I have to do?
This means that there will inevitably be changes for you. It will mean, for example:
- A Tutor Agency will review and renew their Legal documents. This includes the terms/agreement with both you and the clients/parents.
- It may change how you work with a Tutor Agency. Each agency you work with may operate in a different way.
- For example, you may be asked to become an ‘employee’ with one agency. You may be offered a ‘zero hours’ contract.
- A Tutor Agency may suggest that you become employed via an umbrella company.
- Another agency may want you to be an agency worker. Are you clear about your rights? If you’re operating as a separate business, you may be asked to sign a new contract.
- The Tutor Agency will probably need to follow new rules for record keeping. For example, a Tutor Agency might ask you for evidence that you operate as a business. They may need to see that you have a right to work in the UK.
- There are likely to be changes to how you get paid. For example,
- You may be paid under the PAYE scheme.
- A Tutor Agency may ask you to invoice clients/parents directly. It will be your responsibility to chase payment.
- You may be asked to sign up to a different payment method/platform, such as Stripe ‘Connect’
- You’ll need to check your accounting records. Are they adequate and sufficient. For example, are you keeping track of all your expenses? Are you clear about what changes if the Tutor Agency asks you to become an employee?
- You need to review whether you need a new or different insurance cover. If you have insurance, is it adequate and right for the new business arrangement?
Will the changes a Tutor Agency makes be right for your business?
This will be a time of change. Change can be painful but it is also an opportunity to review how you work.
You need to understand and be clear
- why there will be changes
- what changes are being made
- how those changes will affect you
Now is a good time to approach the Tutor Agencies and work with them to review and renew your relationship before the new academic year rush.
We’re putting together some free information for tutors. If you’d like us to email it to you, please complete the form below.