We recently attended an excellent KPMG Conference on AWR and thought the following points they made were key to considering the risk of AWR to Recruitment Agencies:

Example 1:

A business engaging 200 temps paid £1 per hour less than their permanent staff will face an increase pay bill of approximately £500,000 per annum.

Example 2:

A hirer with 500 agency workers, who are paid £2 less per hour than comparable workers recruited directly by the hirer, will have to pay an additional £1,000 per hour to agency workers to give them pay parity once they have completed the 12 week qualifying period.

That equates to £40,000 per week and approximately £2 million per year, a huge liability or potential claim!

At PayMatters we can help by offering a fully AWR Compliant solution or by offering alternatives such as Swedish Derogation or Contractor Own Limited Companies (both of which put the contractor outside the scope of AWR).