Contractor Accountants London will be feeling the pinch or walking away in response to a 'take it or leave it' cut in their pay that is set to be enforced by BNP Paribas from early July. The French bank informed all of its temporary IT workers that they would need to work for less money or accept the termination of their contracts. |
The lowering of pay by at least 4% is said to have "practically wiped out" some teams of IT contractors in Paris, where the bank's headquarters are situated. A BNP spokesman said to the ContractorUK website - which reported the story - that "external market conditions" were to blame for the cut.
The company's IT contractors were sent an internal memo stating that "Following a due diligence process, a decision has been taken to reduce spend on contractor workers within IT. We would like to assure you that this initiative bears no reflection on the skills or the services that have been provided to BNP Paribas."
The slash in IT contractor pay rates comes amid news of an almost £1 million fine handed to BNP by the securities regulator in Hong Kong, due to a 10-year failure to report so-called 'cross trades'. Last July, US authorities also imposed a record £5.1 billion fine on the bank after it broke American sanctions against trade with Sudan, Iran and Cuba.
However, the minimum 4% figure by which IT contractor pay rates were lowered points more to a market alignment than a knock-on effect of those penalties. BNP does, after all, have a history of cutting the pay of its IT contractors, having done so amid the 2008 financial crisis as well as by a non-negotiable 15% in 2011.
While there are also officially no exemptions in the case of the most recent announcement, some UK-based IT contractors have claimed that they are using it to get the bank to agree to flexible working arrangements. But there have also been suggestions that many of the bank's current IT contractors could simply walk away. That was certainly the view of one IT recruitment agency director, who told ContractorUK: "Of those IT contractors affected by the [only] reduction [our agency has experienced in the last 12 months], about 15% chose to not accept it and took on assignments with other organisations.
"IT contractors are free to operate in an open labour market and while income isn't the only driver it is a significant influencer. Enforcing 'take it or leave' rate cuts mid-contract in most instances will cause Contractor Accountants to look at the market and see what other options are available".
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