What the Agency Workers Regulations (AWR) could cost you

21 June 2011

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).