Agency Workers

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Agency Workers
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Peninsula Group, HR and Health & Safety Experts

(Last updated )

In this guide, we'll go over the definition of an agency worker, how the law protects their employment rights, and what employers should know about them.

As an employer, you might need to hire temporary agency workers to complete a certain assignment for you.

In these circumstances, you need to understand their employment rights and the benefits you may be required to provide.

If an agency worker believes their rights have been breached, they can file a claim with the employment tribunal.

In this guide, we'll go over the definition of an agency worker, how the law protects their employment rights, and what employers should know about them.

What is an agency worker?

An agency worker is an individual provided to you by a Temporary Work Agency (TWA) or an employment business to work temporarily under your supervision and direction.

The following are the essential requirements of an agency worker:

  • There is a contract between the worker and a TWA.
  • The worker is temporarily supplied to you by the TWA.
  • When working on an assignment, the worker is subject to your supervision and direction.

The individual in issue shouldn't be running their own company. This means that you shouldn't have a business-to-business relationship with them.

The definition also covers those people who are self-employed.

Employment rights for agency workers

All agency workers have different rights based on their length of service: day one rights and 12-week rights.

Day one rights

Agency workers are assigned a specific set of benefits from their first day of temporary work. These are:

  • National minimum wage.
  • Statutory sick pay.
  • Health & safety protections.
  • Access to the same onsite collective facilities as an employee. For example, car parking, on-site gyms, shower facilities, etc.
  • To be notified of any job vacancies.
  • An itemised payslip.

If they believe they are not being treated fairly in your company, they may enquire as to why. In this case, you must provide them with a written statement that explains the reasons and the rights of a comparable employee.

12-week rights

The UK law gives agency workers some rights after a specific duration of work. This applies when they finish a qualifying period of 12 weeks in a certain job.

After 12 weeks in the same job, an employer cannot treat agency workers less favourably than permanent employees in terms of pay and other rights.

Following 12 weeks on an assignment, their rights as an agency worker are as follows:

  • Same basic pay as a permanent employee doing the same job with the same client.
  • Automatic pension enrolment.
  • Night work.
  • Rest periods and rest breaks.
  • Paid annual leave.

The number of weeks they've built up is paused if they stop working for up to 6 weeks and then go back to the same job.

Most agency workers are unable to make a claim for redundancy pay or for being unfairly dismissed. This is because they are not considered "employees."

However, they can join a union and have the right to be accompanied by a trade union representative during a workplace disciplinary or grievance hearing.

Agency Workers (Amendment) Regulations 2019

The basic idea of the law is that agency workers shouldn't be treated differently because they were hired through a temporary employment agency rather than being directly employed by the employer.

The rights of agency workers have been improved because of a law amendment that went into effect on April 6, 2020, in the UK.

Following the amendments to the regulations, the opt-out provision after 12 weeks for agency workers to get a guaranteed level of pay was removed. This means that all agency workers are entitled to equal pay, whether they are paid between assignments.

Key Information Document (KID)

Key Information Document was introduced in an effort to improve pay transparency for agency workers and offer important information about their assignments.

It's the responsibility of employment businesses to provide agency employees with a KID in all situations. The documents should outline the following:

  • Name of the worker.
  • Contract type.
  • Start date and working hours.
  • Identity of the employment business.
  • Who will pay wages to the worker.
  • Statutory deductions (for example tax and national insurance).
  • Any fees for goods or services.
  • Any other employee benefits.

The agency must inform the agency worker of any changes to the terms and conditions of the contract in a new document.

How do agency workers get paid?

You are not responsible for paying the agency workers directly. Instead, you have to pay the employment agency so that they pay the individuals who worked for you.

When making the payment to the agency, make sure to include the individual's national insurance contributions and statutory sick pay.

The recruitment agency deducts a fee for placing the workforce with you and pays the rest of the money (known as the "assignment rate" or "limited company rate") to the umbrella company.

After the 12-week qualifying period, these people must be paid equal to permanent employees in the same role. Employment agencies must give them equal treatment pay after this period.

The agencies will also be responsible for settling any maternity pay for them.

Agency workers' holiday pay

Their annual holiday entitlement is 5.6 weeks which equals 12.07 percent of the total working time. This includes bank holidays prorated throughout the year.

After completing a qualifying period of 12 weeks in a certain booking, the extra holiday element of any additional holiday pay will be shown on their payslip.

How much is the agency workers' notice period?

Before an agency starts finding work for temporary workers, they should agree upon the length of notice periods with them.

The law doesn't impose any particular obligations on employers (service users) in this regard.

However, you can require that the temporary staff give you the same amount of notice before taking a leave of absence as your permanent staff do.

Get expert advice on agency workers

You may require agency workers to carry out tasks within your company on occasion. Employment businesses have access to these types of workforces.

In these circumstances, you should understand the workers' employment status and the duties that you and the employment agencies bear regarding these individuals.

Employers who don't have sufficient knowledge about their duties or get the wrong advice are more likely to face tribunal claims.

Peninsula offers 24/7 HR advice on agency workers which is available 365 days a year. Need further information? Contact us on 0800 028 2420 and book a free consultation with an HR consultant today.

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