Are you up-to-date with the Agency Workers Regulations 2010?

Following a review of the Agency Workers Regulations 2010, the Government announced in October 2010 that these new rules will be coming into force as previously drafted. The implementation date will remain 1 October 2011.

Are you aware of the challenges and risks for your business?

Overview of the regulations

The Regulations are being introduced to enact the EU's Agency Workers Directive in the UK. The main feature of the Directive is the requirement of ‘equal treatment’ for agency workers engaged on assignments lasting 12 weeks or more.

The employment business (agency) will have primary legal responsibility to ensure compliance with the Regulations, but in reality if hirers do not provide the information required they could find themselves involved in employment tribunal litigation.

What are the definitions of an ‘agency’ and an ‘agency worker’?

In brief, the Regulations define an ‘agency’ as an organisation which is engaged in ‘supplying individuals to work temporarily for and under the supervision and direction of hirers’. An ‘agency worker’ is an individual who is supplied to work temporarily for and under the supervision and control of a hirer and has either a contract of employment or self-employment with the agency.

In most cases we would expect tax and NICs to be collected under PAYE via the agency’s payroll.

What does this mean for your business?

• All businesses will need to review and assess their arrangements for engaging agency workers and introduce procedures and controls to monitor the length of agency contracts and assignments for individual agency workers.
• Employers will need to work with procurement teams to understand what contractual arrangements exist with the agencies and with their HR departments to determine comparator groups for agency workers engaged on terms of 12 weeks or more. Agency contracts may well need to be renegotiated.
• CFO’s, commercial sales directors, procurement teams and HR will need to consider the financial impact of additional labour costs on existing customer contracts and pricing structures.

Why PwC?

PwC have developed a series of tools and methodologies which will help you to:

• Identify and assess the extent to which agency labour is used throughout your business.
• Evaluate the costs of using agency labour and the financial impact for your business in 2011.
• Develop alternative, cost effective resourcing structures.
• Review contractual engagements with suppliers of agency labour.

Our People

• PwC Legal can ensure that all the complex legal angles are covered
• We work closely with multi-disciplinary teams from PwC, enabling us to deliver employment solutions which are both appropriate and relevant to your business needs.

If you would like to find out more about the Agency Workers Regulations and the impact that this new piece of legislation will have on your business, please contact Nick Willis.