contract vs permanent pay

LegacyUser

I've about 4 years experience in funds industry. IFSC type work.
Office drone

I'm here about 4 months now in a new job and the boss seems to be happy.
I was put in charge of training new hires though I'm new myself.
And the boss is always talking about my experience and giving my tasks like representing the team in department meetings or drawing up procedures, lots of extra stuff as she said I've good experience.
I'm happy to be challenged.

The company is hiring lots of new staff.
Some are on jobbridge and if they are good they get offered a job after 9 months.
Others got 1 year contracts. Most of my new teammates are on contract.
I was made permanent full time straight away, HR sold it to me that this was a great thing.
I'm on probation of course but I am permanent.

My question is does it be usual for contract staff to earn more then permanent staff?
This isn't IT where contractors earn a daily rate. I just assumed we were all on the same money.

I'm only finding out that the contract staff earn 3K more then me.
When their 12 months are up if they are good they are made permanent but get less money.
Some contract staff fight to stay on contract, one girl got a 6 month extension but was told to take the pay cut and go permanent or she wouldn't be renewed next time.


Why do contract staff earn more then permanent?
I'm training people with less experience then me, we are both on probation but they earn more them me??

I'm not trying to be petty, I read my job offer and I accepted it.
Just I thought being permanent was supposed to be a good thing

Mrs OBumble

It's quite common. You've a permanent contract, that's valuable in itself.

whatnext

Contract staff depending on how they are contracted, PAYE direct, PAYE through an agency or Limited Co have different risks/entitlements to Perm Staff employees.

1. they may not be entitled to holiday pay and bank holiday pay.
2. they may not be entitled to sick pay.
3. they may not have pension / health care or other benefits.
4. they may not be entitled to claim social welfare if they lose their job.
5. they may have to pay someone to manage their tax affairs.

all the above are dependant on how they are engaged but 3k would soon be lost if all the above were the case.

tatli_lokma

whatnext wrote: »

Contract staff depending on how they are contracted, PAYE direct, PAYE through an agency or Limited Co have different risks/entitlements to Perm Staff employees.

1. they may not be entitled to holiday pay and bank holiday pay.
2. they may not be entitled to sick pay.
3. they may not have pension / health care or other benefits.
4. they may not be entitled to claim social welfare if they lose their job.
5. they may have to pay someone to manage their tax affairs.

all the above are dependant on how they are engaged but 3k would soon be lost if all the above were the case.

This is not entirely correct - I think you are confusing the situation OP discribes with self-employed contractor (for which what you mention would have relevance).

Agency or contract workers are still entitled to the statutory minimum allowances to holiday pay and bank holidays.

Again, you cannot pay the permanent staff sick pay and not the contract staff. However, it is more common for companies not to pay sick pay nowadays.

Their entitlement to SW is irrelevant to this situation. If they are paying PRSI then their entitlement will be based upon contributions and in some cases means testing. It is not a concern for employers and should not be taken into account when setting wages.

Many companies, however do pay a slight premium to contract workers purely due to the fact that they do not have job security. They might not be in a position to offer permanent roles, but if they want a certain calibre of employee they know they will have to pay a little bit of a premium on the salary to entice people to accept a contract role. At the end of the contract, if the company is in a position to keep them, then they are free to offer a new contract, on a lower salary and the employee either accepts or not - if they accept they are trading the 3k for a more secure position.

It is definitely not unheard of.

Mrs OBumble

Agency workers also often don't have access to training or supervision.

Lots of people hate having performance reviews and regular 1-on-1's with a manager... but in my experience the only thing worse than having them is not having them is not having them for a sustained period - because you don't get suggestions for what you can improve on, any kind of development plan or opportunities, or view of where the team is going.

whatnext

Little Ted wrote: »

This is not entirely correct - I think you are confusing the situation OP discribes with self-employed contractor (for which what you mention would have relevance).

Agency or contract workers are still entitled to the statutory minimum allowances to holiday pay and bank holidays.

Again, you cannot pay the permanent staff sick pay and not the contract staff. However, it is more common for companies not to pay sick pay nowadays.

Their entitlement to SW is irrelevant to this situation. If they are paying PRSI then their entitlement will be based upon contributions and in some cases means testing. It is not a concern for employers and should not be taken into account when setting wages.

Many companies, however do pay a slight premium to contract workers purely due to the fact that they do not have job security. They might not be in a position to offer permanent roles, but if they want a certain calibre of employee they know they will have to pay a little bit of a premium on the salary to entice people to accept a contract role. At the end of the contract, if the company is in a position to keep them, then they are free to offer a new contract, on a lower salary and the employee either accepts or not - if they accept they are trading the 3k for a more secure position.

It is definitely not unheard of.

First line of my post

Contract staff depending on how they are contracted, PAYE direct, PAYE through an agency or Limited Co have different risks/entitlements to Perm Staff employees.

Honey-ec

Little Ted wrote: »

Again, you cannot pay the permanent staff sick pay and not the contract staff. However, it is more common for companies not to pay sick pay nowadays.

Not true. The EU Directive on Agency Staff doesn't apply to sick pay. It's perfectly legal for a company to pay permanent staff for sick days, but not contract staff, and this is the case in my company.

Mr. Loverman

Wages are not a science, but it typically goes like this:

Contractors get paid more than permanent staff
Men get paid more than women
People who ask for more get paid more than people who ask for less or don't ask at all

Moral of the story:

Be a male contractor with good negotiation skills!