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What are the Agency Workers Regulations (AWR)?

Implemented on 1st October 2011, the Agency Workers Regulations were put in place to provide more equal rights to temporary workers after working on an assignment for 12 weeks or more.

What rights does the AWR provide to agency workers?

From Day 1 of a new assignment, agency workers must be provided with access to facilities used by permanent staff members, such as canteens and childcare. They should also be informed of any job vacancies that arise.

After completing 12 weeks in the same job, agency workers will also be entitled to receive equal treatment in terms of pay, holiday entitlement, night work, rest breaks, and working time rights.

What impact have the rules had since October 2011?

Since the ‘go live’ date, successive surveys have suggested that the AWR has not provided any significant benefits to businesses or temps. The most recent, published by the CBI on the anniversary of the implementation date, suggests that businesses have spent £1.5bn in compliance costs, while the demand for agency workers has fallen in 8 out of the 9 months of 2012 (to the end of September).

The AWR and Contractors

Although the Regulations were created to protect the rights of lower paid agency workers, the rules may also affect some professional workers, such as IT contractors who work via recruitment agencies.

Limited company contractors, who are genuinely in business on their own account, should fall outside the scope of the AWR. As one has come to expect in recent years, the official guidance is ambiguous in defining the link between IR35 and AWR. There is no legal link between the two, however a limited company contractor who is not caught by IR35 is unlikely to be affected by the AWR.

Umbrella company contractors – those who work via an umbrella scheme, rather than their own limited company – are affected by the AWR. PAYE umbrella companies have changed the way they operate in order to comply with the new rules. The most popular solution is the ‘Swedish Derogation Model’ which provides pay between assignments. A smaller number of umbrella companies operate a ‘match permanent pay’ model.

Further Information

Contractors’ organisation, PCG, has a comprehensive PDF guide to the AWR – access it here.

A useful guide to the AWR from Professional Passport – access it here.

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