PayMatters Guide to Agency Workers Regulations (AWR)

3 October 2011

AWR is now in force and although comparable pay rights only come in after 12 weeks qualifying (24th December), certain other rights come into force immediately.

What is AWR?

The Agency Workers Regulations are being introduced to protect all temporary workers to ensure they receive the same pay and working conditions as their permanent colleagues at the end client. They come into practice on the 1st October and 24th December is the end of the 1st 12 week period.

Who will be affected by AWR?

Contractors working through a Limited Company and deemed outside IR35 are exempt from the AWR regulations.

Contractors working via an Umbrella company or via Agency PAYE will come under the scope of AWR.

There are two sets of rights that workers will benefit from following the introduction of AWR:

Week 1 Rights are available to workers from day one – Workers will have access to the same facilities

as their permanent colleagues and the opportunity to apply for internal job opportunities as and when they become available. It is important that the end client is reminded of their responsibility regarding these rights.

Week 12 Rights are available to workers following 12 weeks of continuous employment in the same role and with the same end client – Workers are entitled to the same rates of pay, holiday entitlement and holiday pay as their permanent colleagues. Pregnant workers are also entitled to paid time off for ante-natal care after this period.

What does this mean for Agencies?

There are two options available to agencies:

The first and most favoured by the majority of agencies is the compliant solution, we will support agencies that choose to do this via our Equal Treatment Form, by completing this we can ensure contractors are being offered comparable pay.

The second option is the Swedish Derogation Model in its simplest form removes the rights to equal pay from the AWR regulations. The following conditions apply when using this solution:

The contractor had a permanent contract of employment in place with either an Umbrella Company or Agency before the start of their 1st assignment.

The Agency or Umbrella Company will have an obligation to pay the contractor when they are not working, referred to as ‘Pay between assignments’.

Provide reasonable options of employment for the worker.

Provide the contractor a minimum payment for four weeks, this minimum amount should be 50% of the contractors’ basic pay for the contract and is not allowed to be less than minimum wage.

How can PayMatters help?

As a market leading provider of Limited Company accountancy and Umbrella company services , PayMatters are keen to support agencies and the recruitment industry helping them through the challenges faced with the implementation of AWR. We are happy to support either solution from both a contractual and process perspective to ensure the contractor continues to receive the best service. Call us today to discuss how we can help.