AWR / Guidance on Dealing with Temp Workers

AWR Overview

•  In 2008 the bill was passed and the Agency Workers Directive became European Law.
• Britain was then in a position where we had to adopt the law and put the required legislation in place.
• This resulted in the Agency Workers Regulations, which come into force on 1^st October 2011.
• AWR states that temporary workers with 12 weeks service are entitled to the same pay and benefits as the permanent employees they are working with.
• The official statement is “to provide agency workers the entitlement to the same or no less favourable treatment with respect to basic employment and working conditions, if and when they complete a 12 week qualifying period”
• The key areas for equal treatment are – pay and bonuses, duration of working time, annual leave and access to training &facilities.
• Equal treatment does not include pension, or occupational sick pay.

Russell Taylor Approach

 Our approach is to proactively adopt robust procedures with customers, candidates and commercial contracting partners to ensure that compliant and effective solutions are planned to the benefit of all parties. We are a strong advocate of compliance, and the stabilisation of good working relationships within the contractor marketplace.

Minimising Risks and Potential Liabilities

The key factor in managing and dealing with AWR is to develop a close relationship between client, recruitment agency and commercial contractor.  It is key that proper processes are conducted between both parties at the point of hire, and that the following information sharing is on-going :

• What method of payment do the workers contract on?
• Is the pay and conditions comparable on “site a” for both temporary and permanent workers, and if not what are the average pay rates for employees doing comparable work?
• Where comparative issues apply;
  • what was the previous contractor 12 weeks employment history
  •  how many workers are reaching their 12 week period?

 Suggested Options

These would obviously need to be tailored to meet a client’s circumstances;-

• Operate under the Construction Industry Scheme – (CIS) – if the worker is genuinely self-employed then can be paid through this scheme
• Operate a compliant product for genuinely self-employed, for those not eligible for CIS
• Allow some workers have their own limited company – contractors with their own limited company fall outside of the directive
• Give  equal treatment where workers are to be contracted under Umbrella or PAYE if the candidate is working for more than 12 weeks

Note, that in some circumstances AWR would not be a concern, where;-

• Temporary workers are on higher rates of pay to compensate for the short term nature of their assignment
• The net, ‘take home’ pay of the worker is greater, because of the tax effective Umbrella, payment method

What Should be Avoided - £5,000 fine possible

•  Offshore payroll companies – MSC legislation states that HRMC can transfer debt for unpaid tax or NI to end client or the agency.
• The gross payment method – to simply pay your own staff gross pay and leave them to sort their own tax – this doesn’t sit comfortably with the Inland Revenue!
• Changing employment agency, job location, job title, contractor’s line manager etc., does not stop the 12 week ‘clock’.
• Patterns of duration of temporary work less than 12 weeks, ( i.e. 11 weeks ), that diod not exist before 1^st. October, 2011

N.B.

• It is not possible to ask PAYE / Umbrella payment staff to opt out of these regulations.
• Any successful claim for unequal treatment after 12 weeks will be backdated to day 1 of the assignment.

Our Advisors

Russell Taylor Associates have invested heavily with the advisors listed below:

• Accountax Consulting – industry renowned specialists in payroll and employment law
• Recruitment and Employment Confederation – our ruling body
• Priory Partnership – Chartered Accountants
• Professional Passport – Recruitment Industry Advisors
• The Department for Business, Innovation & Skills (BIS)

If you wish for more info please don’t hesitate to contact RTA’s Peter Russell, on 0151-737-5560 or peter@russell-taylor.co.uk. We would also be very happy to meet with you to discuss your needs and concerns.

Or alternatively, The BIS guidance to AWR is available to view and download at:

http://www.bis.gov.uk/assets/biscore/employment-matters/docs/a/11-905-agency-workers-regulations-guidance.pdf