The Agency Worker’s Regulations (AWR) are a part of an EU directive and aim to ensure that temporary workers are treated fairly, and ultimately have the same pay and conditions as permanent employees.
Whilst they were expected to have perhaps the biggest impact on the way contractors and freelancers are engaged since IR35 and MSC, the impact has been slightly less than was expected. You can read all the latest live AWR updates on our news blog.
John Lyon, Managing Director of ICS, commented in the October edition of Recruiter magazine about the expected implications of the AWR, and as mentioned, our free AWR Guide for Recruiters is available to download below.
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Click here to download our FREE Agency AWR Guide |
Three main parties are affected under AWR
- The Temporary Worker – who will have additional protection under the new regulations.
- The Hirer – who provides a contract or assignment for a temporary worker.
- The Temporary Work Agency – any recruitment agency or umbrella company involved in the process.
At ICS we work closely on a daily basis with workers, hirers and agencies. This gives us a unique insight into the ongoing impact of AWR.
AWR Outcomes
It was initially unclear exactly how many contractors would be affected by AWR, as many temporary workers already benefited from higher pay rates than permanent employees. As anticipated, many white collar workers are not affected, but it is critical that the same procedures and attention to detail are followed to ensure full compliance for every contractor.
We will continue to work even more closely with agencies and hirers in the future given the greater flow of information required between the parties to mitigate risk for those involved. We see this as a positive change, as the flexibility of our business model is attractive to a wider range of agencies.
More than ever, agencies are seeking the reassurance of tight operational procedures, clear understanding of regulations, and a choice of solutions available for their contractor’s. We are already seeing agencies consolidating their PSLs to include only partners who have the depth and experience to deliver.
The liability for non-compliance rests with both the agency and the hirer. In the absence of test cases to see the extent of each party’s responsibilities it is critical to ensure that robust processes are in place. For example, in the event of the hirer failing to notify the agency of an increase in comparable workers pay, will an employment tribunal place the full responsibility on the hirer, or will the agency be in anyway liable (even though it was entirely out of their control)? Until we see test cases go before the courts we recommend leaving nothing to chance.
ICS is built on a culture of care, compliance and trust. After years of successfully navigating the complexity of IR35 and MSC legislation we are applying the same robust processes to AWR.
Contracting is a huge driver for the economy, especially in the current climate. We believe it is vital that AWR legislation comes into effect with the minimum disruption for our clients and partners, and we will play a leading role in ensuring this happens.
What solutions are available?
ICS offers a range of AWR compliant services:
- Contractors that are genuinely Self-employed will not be affected by the legislation and may continue to utilise our Limited Company and Sole Trader Services.
- Our Umbrella Service or “Match Permanent Pay” model ensures the regulations are addressed making it a suitable and effective solution. One key aspect is the provision of comparable pay information from the hirer, enabling us to use our existing overarching employment contract. This risk-based approach ensures we have the relevant information to assess that the Temporary Worker is treated fairly.
- In addition to our core services, our employees will now also have the option to enter into an employment contract under what is known as the Swedish Derogation Model. This ensures that the Temporary Workers contract sits outside AWR as a result of additional commitments made to them. This needs careful thought and consideration by all parties, particularly in respect of any additional responsibilities to the Temporary Worker. After all, who wants to increase costs when margins are already fine?
If you are interested in finding out how our AWR compliant solutions could benefit you, please contact us.
We are happy to shape appropriate solutions and share best practice with our agency partners so talk to us about your requirements.
If you have questions about AWR now call Daniel Lovett-Horn, our Senior Agency Specialist, on 0800 195 3750 or daniel.lovett-horn@ics.me.uk for more details.
