For contractors working through a recruitment agency, an understanding of legislation is essential to remain compliant and in control.
The Agency Workers Regulations (AWR) were introduced in 2011 as a measure to protect agency workers by granting them the same rights as employees. We’ve looked at AWR and what this could mean for you.
What is an agency worker?
This term refers to an individual who is either:
- Supplied by a temporary agency. Temporary workers must have an agreement or contract to carry out work for their hirer and work under their supervision and direction.
- A worker who supplies their service through an umbrella company (known as an intermediary). These workers will have an employment contract with the umbrella company.
A genuine self-employed individual will not be classed as an agency worker, so these rules will not apply to them.
What is Agency Workers Regulation?
The Agency Workers Regulations (AWR) came into effect on the 1st October 2011. It protects temporary workers hired through an agency, or those working through an umbrella company. Temporary workers and contractors working through their own limited company are unaffected by AWR.
The AWR legislation ensures that any temporary worker who is working for a company after 12 weeks in the same job role, will have the same working conditions to that of a permanent employee in the same job. This means that temporary workers will benefit from a whole host of employee benefits from their employers.
As a result, 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.
However, the following are excluded from AWR:
- Sick pay
- Loyalty bonuses
- Pensions
- Maternity pay
- Redundancy payments
Limited or umbrella?
If you’re considering working under an umbrella company, you should be aware of the key distinctions between contracting through your own limited company, how your working practices will differ and what support is available to you. For more information about working through an umbrella company, our sister company, Parasol, is here to help.
Who is affected by the Agency Workers Regulations?
AWR only impacts contractors who are not operating through their own limited company. The table below shows if you would be affected by the scheme.
State of Individual | Affected by Agency Workers Regulations? |
Supplied by temporary work agencies | Yes |
Supplied by intermediaries e.g. umbrella companies | Yes |
Limited company contractors | No |
What does AWR mean for me?
Once you have successfully completed the qualifying period of 12 weeks, 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 of these terms and conditions. If, after 28 days they have not responded, you can ask your employer directly who then has 28 days to reply. If, after 28 days no information has been provided, you can take both parties to an industrial tribunal.
There is no maximum limit 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 AWR legislation have no choice if they participate 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 of 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 this timeframe, you would still be entitled to the 12-week agency workers regulations. If, however you changed agency and your temporary role was different, you would not apply for the 12-week AWR rule.
How will AWR impact me if I hire subcontractors?
If you are a contractor, AWR will not impact you if you are legitimately in business on your own account. However, if you provide contractors to clients to undertake work, this legislation will impact them.
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