Agency Workers Regulations

Agency Workers Regulations (AWR): a summary

Agency Workers Regulations 2010, or AWR, came into effect in 2011 in the UK.

If you’re a hirer of temporary agency workers (temporary workers) please make sure you have completed the following.

Read and understood the regulations.
Assessed what effect the regulations have on your organisation.
Work closely with us to minimise the costs and any potential disruption the regulations may cause.
Put in place systems that ensure compliance with the regulations.

What are the Agency Workers Regulations?

The regulations stem from the 2008 EU Directive on Temporary Workers. The directive gives temporary workers the right to have the same pay and working conditions as your own comparable workers/employees. The regulations don‘t change the agency temps' employment status, i.e. rights granted under these regulations do not grant them employment status in law.

Who is a temporary agency worker?

A PAYE temporary worker, whether employed by the supplying agency under a contract of employment or engaged as a worker under a contract for services.
A PAYE temporary worker supplied via an umbrella limited company either directly or through an agency.
Workers who are genuinely in business on their own account, like a genuinely self-employed, one person limited company contractor, are outside the scope of the regulations.

What is an agency under the regulations?

The agency supplying the temporary worker to the hirer.
Umbrella limited companies, whether supplying through an agency or directly to you.
Any master or neutral vendors in the supply chain.

What do the regulations do?

The regulations grant two types of rights to temporary workers.

Day one rights – these are enforceable directly against you, the hirer of the temporary worker, from day one of an assignment

From day one in an assignment temporary workers are entitled to the following.

Same access to collective facilities as if they were directly employed by you, e.g. company canteen, gym membership, car parking facilities, subsidised transport etc.
Right to be informed of suitable internal vacancies at your place of work e.g. if you post internal vacancies on the company intranet site make sure you give temporary workers access to it.

Liability for noncompliance rests with you.

Week 12 rights – these are enforceable primarily against agency. Liability switches to you if the information you provide us with, about the pay and paid holiday the worker would be entitled to if directly employed by you, is shown to be incorrect.

After working for the same client hirer (you) in the same role for 12 weeks a temporary worker becomes entitled to the:

same pay -explained later in article and
working conditions -explained later in article

It's as if they had been directly employed into that role by you at start of the 12 week period (12 weeks explained later in article).

Primary liability for noncompliance rests with the agency. Liability switches to you if you give the agency incorrect information on which they rely to comply with the above.

What is ‘pay’ under the regulations?

Pay includes

Salary or wages.
Commission.
Shift, difficult/dangerous work premia.
Holiday pay*.
Overtime pay.
Vouchers - with a fixed monetary value.
Individual performance related bonuses - explained later.
Other money benefits referable to the work undertaken during the assignment.

*Temporary workers are already given statutory paid holiday. This is paid in addition to the hourly/daily rate as rolling it up in the rate is unlawful. The definition of pay under the AWR includes holiday pay but in reality this will be limited to any additional contractual paid holiday over and above the statutory minimum already given. This additional contractual holiday pay can be rolled up with the pay rate and we will ensure any additional contractual holiday is accounted for in the rate agreed with the temporary worker.

Pay does not include

(temporary worker not entitled to)

Benefits in kind.
Occupational sick pay.
Pension payments.
Maternity, paternity and adoption pay.
Redundancy pay.
Share and option schemes.
Loyalty bonuses - such as a Christmas bonus - or any bonus payments which are not directly attributable to the amount or quality of the work performed by the temporary worker.
Guarantee payments.
Company car.
Health/life insurance.

What is meant by ‘working conditions'?

This refers to any working time entitlements – working hours, rest breaks, paid holiday.

When has a temporary agency worker worked for 12 weeks?

When they have performed work in 12 consecutive calendar weeks, subject to the following types of absence which will pause the clock, but not break continuity.

Absence of up to six weeks.
28 weeks’ sick leave.
Statutory or contractual holiday.
28 weeks’ jury service.
A planned temporary work shutdown - such as a Christmas closure.
A strike, lockout or other industrial stoppage.

Continuity will be broken in the following circumstances (and the 12 week qualifying period reset).

A break of more than six weeks - but beware the anti-avoidance provisions – explained later.
The commencement of a new and substantively different role either with a new hirer or within your organisation.

Maternity rights

Pregnant 'temps' will be entitled to paid time off for ante-natal care after 12 weeks and other pregnancy related entitlements.

Anti-avoidance

The regulations include anti-avoidance provisions to prevent a hirer from structuring assignments to prevent a temp from acquiring 12 week rights. A penalty of £5k is payable if the temp succeeds before a tribunal.

Individual performance related bonus payments

A bonus you would pay the temporary worker if you directly employed them and which is directly attributable to their individual performance falls within the definition of 'pay'.

Where this applies the temporary worker does not have to receive exactly the same bonus as your comparable direct employee but should have the same opportunity to achieve it and be assessed using the same criteria. By contrast, bonuses or any part of them, directly linked to an individual's length of service/the company’s performance will not count.

The Page Personnel approach

Page Personnel deals mainly at a level where temporary workers supplied are paid at least at market rates. Therefore, we do not anticipate making significant adjustments generally and aim to ensure the temps' packages are compliant from day one.

We do not think it appropriate in the case of valued, high-level agency temps to pay them less in the first 12 weeks of an assignment than they would be paid had they been directly engaged by you at the start of it. Indeed, it could lead to a situation where clients who only pay AWR compliant rates after the 12 week qualifying period are unable to attract high calibre temporary staff.

We will complete a questionnaire with you ahead of each assignment to determine what the temp’s pay would be if you were to directly engage them. This would include determining the relevant:

basic pay and
contractual paid holiday.

And determining whether:

any individual performance related bonus would be due,
any commission would be payable in the role,
overtime or other premium rates would apply or
any vouchers with a monetary value would be due.

The information you give may be based on a comparable employee or a pay grade but must be accurate as it will be relied on to ensure the worker is receiving the correct package. Where there is no comparable employee/pay grading equal treatment will be deemed.

Individual limited company contractors, set up as a business on their own account for tax purposes, will be treated by us as outside the scope of the regulations.

There are derogations from the regulations such as the managed service company exemption and the Swedish derogation but we do not consider these to be generally viable for our business.