From 6th April 2020, the government is introducing regulations which mean new agency workers must be given a ‘Key Information Document’ (KID) containing important information before agreeing terms with an employment business (or agency).
The regulation doesn’t apply to agency workers with existing terms with an employment business, but these workers must be provided with a KID when they sign up with a new employment business.
The Key Information Document is intended to improve the transparency of information provided to workers, particularly around pay, including an overview of how any fees and deductions will affect the worker’s pay throughout a labour supply chain. The KID will enable an agency worker to make a more informed decision about taking on an assignment based on how their take-home pay is affected by agency fees and other deductions.
Information a Key Information Document must provide
The government has published detailed guidance which states the information which must be included in the KID. This covers basic items such as the name of the employment business (or agency), rates of pay, who will pay the worker, and the level of fees and deductions a worker can expect.
The government has published various templates that agencies, umbrella companies and Personal Service Companies can use to provide the necessary information to individual workers.
An employment business can provide any additional information the worker may find to be useful, such as the period of notice to be worked.
Umbrella companies and other intermediaries
Where there is an intermediary or umbrella company involved in the labour supply chain, the KID must still be produced by the employment business and provided to both to the umbrella company and the individual agency worker. This is to ensure that workers are aware of the deductions made throughout the labour supply chain.
The worker should be able to see the difference between the gross amount paid by the employment business to the intermediary or umbrella company and the net sum the worker receives.
The Employment Agency Standards (EAS) inspectorate is responsible for the rights of Agency workers and will enforce the new requirement. EAS can be contacted at email@example.com.