From the 6th of April 2020, agencies will be required to provide a Key Information Document (KID) to candidates in order to comply with regulation 13A of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (the ‘Conduct Regulations’).
All agency workers must be given this document before agreeing any terms with an agency. This does not apply to agency workers who signed up prior to 6th of April 2020, and with existing terms with the agency.
The intention of this document is to provide transparency of information to the agency worker and, in particular, how their prospective terms of engagement affect their pay over the course of their assignment. This includes paying through an intermediary such as an umbrella company, a Personal Service Company (PSC) or PAYE.
Our Clients are preparing systems to provide recruitment agencies with the ability to obtain all necessary information required in the most efficient manner.
Information that is required to be included is dependent on how the worker is due to be paid. For the purpose of this article we will look at an example, for an umbrella company employee:
- Name of worker
- Contract type (e.g. Contract of service, apprenticeship, or contract for services)
- Name of the recruitment agency
- Name of the umbrella company
- Who will employ the worker
- Who will pay the worker
- Any business connection between the agency and the umbrella company
- Pay intervals or frequency of payments
The illustration must include both Umbrella company pay and Worker pay information as follows;
“You are being paid through an intermediary or umbrella company: a third-party organisation that will calculate your tax and other deductions and then pay you for the work undertaken for the hirer. We will still be finding you assignments.
The money earned on your assignments will be transferred to the umbrella company as part of their income. They will then pay you your wage. All the deductions made which affect your wage are listed below. If you have any queries about these please contact us.”
The information should detail all pay related information, including statutory and non-statutory deductions. It should also included any fees charged to the worker for goods or services, any other non-monetary benefits, leave entitlement as well as any opt out agreement.
Whilst the KID will need to include an illustration, this does not need to be the precise figure that the individual worker will receive on that particular assignment. It can simply be an example.
Gross rate of pay to umbrella company
Deductions from umbrella company income required by law (Nicers, AL etc)
Any other deductions from umbrella’s income (eg. Margin)
Example rate of pay to you (this is the gross taxable)
Deductions from your pay required by law (Nicees, PAYE, etc)
Any other deductions or costs from your wage (Pension contribution)
Any fees for goods or services and their frequency (eg DBS, once off)
Example net take home pay
You can read the full guidance here:
Should need any further information, please feel free to get in touch with us: 0207 808 6405