As the date for the implementation of the Agency Workers Regulations (AWR) draws closer, PAYE umbrella contractors across a wide range of sectors and skills may be wondering what, exactly the implications may be for their umbrella companies.  The EU regulations, which come into effect on October 1st 2011, were designed to protect low-paid temporary agency workers from exploitation by obliging firms to pay them the same rates as their permanent counterparts and give them the same conditions after 12 weeks.  The difficulty posed for PAYE umbrella contractors, however, is that they are often highly skilled professionals who command pay rates significantly higher than permanent employees in a company do.

The Recruitment and Employment Confederation (REC) has moved to reassure its members that discussions with the Department for Business Innovation and Skills about the AWR are proceeding well.  The issue of the possible unintended consequences of AWR for umbrella companies is actively under consideration by BIS.

REC spokesman Phillip Higgins, recent talks have highlighted the importance of greater understanding about the role of umbrella companies vis-à-vis AWR and other legislation.  He described PAYE umbrella firms as a “rapidly evolving market”, and added, “…recruiters engaging candidates who use umbrellas should ensure they keep up with these changes.”

The Government, he went on, does genuinely appear to be focussing its efforts specifically on people who are intent of avoiding their legal obligations rather than on recruiters who make honest mistakes with the Agency Workers Regulations.

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