Due to come into force in October 2011 the Agency Workers Regulations aim to ensure "“the basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job”.

There had been some specualtion that although contractors working through Umbrella Companies were initially going to be caught by the new regulations the new Tory Government would review this and make them outside their scope (as contractors working through their own limited companies are outside the scope).

A Ministerial statement from Edward Davey, the Minister for Employment Rights, Consumer and Postal Affairs has however confirmed that no further review is possible. An extract reads:

"The Secretary of State and I have therefore discussed this matter on a number of occasions with both the CBI and the TUC, seeking agreement on changes that we consider would have improved the implementation regime, to the potential benefit of both employers and agency workers. Unfortunately it has not been possible to find a way forward that would be acceptable to both parties.

This outcome is clearly disappointing. However, the Government has taken the view that the absolute priority must be not to take any steps that could put at risk the 12-week qualifying period, which significantly mitigates the burdens the legislation will place on employers. The Government will not therefore be proceeding with any amendment of the Regulations themselves. We will instead now use the time that is still available before the Regulations’ entry into force to develop the best possible guidance to help employers comply with their new obligations".

Apsco reports that Umbrella Workers employed in accordance with the Sweidsh Derogation will be outside the scope of the regualtions: http://www.apsco.org/Article/Detail.aspx?ArticleUid=2f708325-a2a1-4b30-af30-561c982f7079. "Obligations under Regulation 10 include paying the agency worker a minimum amount between assignments. The minimum payment must be 50% of the highest level of pay paid to the agency worker in the 12 weeks preceding the end of the last assignment subject to the payment being no less than the national minimum wage".

Apsco feel many Recruiters and Umbrella Companies may use this as a way round the regulations and are seeking further guidance to confirm that the exemption would apply.

PayMatters LLP, Contractor PAYE Umbrella