Agency Workers Regulations (AWR) Contractors Guide

Agency Workers Regulation or AWR as it is more commonly referred to came into effect on 1st October 2011 and protects temporary workers hired through an agency or those working through an Umbrella Company, temp workers and contractors working through their own limited company are not affected by AWR.

Download your Agency Workers Regulations factsheet: Agency Workers Regulations (AWR) Fact Sheet

The Agency Workers Regulation rule enforces that any ‘temp’ working for a company after 12 weeks, on the same job role, will have the same working conditions to that of a permanent employee in the same job, putting a whole new spin on the way ‘temporary workers’ are treated.

This means that temporary workers after 12 weeks in the same role must be treated to the same terms and conditions relating to pay as a permanent member of staff, these conditions include:

• Basic pay
• Holiday pay
• Bank holidays
• Overtime pay and some bonuses

However the following are excluded from AWR: sick pay, loyalty bonuses, pensions, maternity and redundancy payments.

Who is affected by the Agency Workers Regulations?

This new ruling does not affect contractors working through their own limited company and who are outside IR35.

The summary table below shows if you would be affected by the scheme.

What does AWR mean for me?

Once you have successfully completed your 12 weeks qualifying period you are entitled to find out about basic terms and working conditions. Typically you will first approach your agency who will have 28 days to inform you. If after 28 days they have not responded, you can then ask your employer directly who then has 28 days to reply.

If after 28 days no information has been given, you can take both parties to an industrial tribunal.

There is no maximum limit to any compensation awarded to successful claimants but a minimum of two weeks’ pay should normally be awarded by the tribunal in relation to a failure to provide equal terms and conditions.

Employer penalties

Employers under the new AWR legislation will have no choice if they take part or not. If they do try and avoid the 12 week qualifying period by rotating agency workers and changing assignments to ensure they do not meet the 12 week qualifying period, they will face fines up to £5,000.

What happens if I change agencies in between my 12 week period?

Nothing…If you were to be in the same role, but re-hired by a different agency within that time, you would still be entitled to the 12-week agency workers regulation rules. If however you changed agency and your temporary role was different you would not apply for the 12-week Agency Workers Regulations rule.

If you are considering working through your own limited company, you may find the following pages useful:

• Limited Company vs PAYE Umbrella – ‘The ultimate (quick) guide’
• Take home pay – Limited company or Umbrella company
• How to Contract through your own Limited Company

If you have any questions or would like any further advice please contact our New business team on 01442 275789 or email: newbusiness@sjdaccountancy.com.