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Becoming an agency worker

Agencies will usually provide a potential new agency worker with all the information they require to register with them and start their first assignment. However, the nature of agency work means that an agency and agency worker may find it useful to have a general understanding of what the options and implications are when registering to become an agency worker.

Registering with an agency

An agency will require information and documentation from an agency worker to match them to the right assignments. This usually includes:

  • proof of identity documents such as a passport, driving license or citizen card
  • evidence of skills and qualifications such as certificates, licenses, authorisations and registrations with professional bodies
  • DBS (Disclosure and Barring Service) checks for roles that involve working with vulnerable people or where specifically required by the hirer
  • references if roles may involve working with vulnerable people.

If the person is unwilling or unable to provide some of the information, the agency may refuse to register them.

An agency worker may register with more than one agency if they wish.

Accepting a contract with an agency

An agency must provide an agency worker with the terms and conditions (the contract) that will apply between the agency and the agency worker. It must be agreed before any offers of work can be made. A signature is not essential but helps to indicate that agreement has taken place.

It must be in writing and include information on:

  • pay
  • holiday entitlement
  • the type of work the agency will try to find and offer
  • if the contract is a contract of service (contract of employment), a contract for service or an apprenticeship
  • the length of any notice period to end an assignment.

Once terms and conditions have been agreed, they cannot be changed without agreement.

Pay between assignments contract  

A pay between assignments contract is sometimes called a Swedish derogation contract.

It is a special arrangement where the agency worker:

  • becomes an employee of the agency, receiving the employment rights that come with being an employee
  • must accept suitable work offered to them
  • (if no suitable work is available) must be paid at least the most favourable rate out of:
    • 50% of their last assignment's highest week's pay
    • the relevant NMW (National Minimum Wage) or NLW (National Living Wage) rate
  • will not be entitled to equal treatment on pay (including holiday pay) as people directly employed by the hiring organisation after 12 weeks in the same job
  • remains entitled to all other agency worker rights.

A pay between assignments contract must include:

  • a reference stating the agency worker is an employee of the agency
  • the minimum pay rate they will receive
  • the type of work that the agency worker may expect
  • the location or locations where the agency worker may be expected to work
  • the expected hours of work during any assignment
  • the maximum number of hours of work that the agency worker may be required to work each week during any assignment
  • the minimum number of hours of work per week that may be offered to the agency worker during any assignment, provided that it is at least one hour.

If the contract does not include all of the above, it is unlikely to be a pay between assignments contract and the standard agency worker rights are likely to apply.

Calculating 50% of the last assignment's highest week's pay is done in one of the following ways.

  • A weekly-paid agency worker who has been on the assignment for 12 weeks or less gets the highest weekly amount they received in any week they have been on the assignment.
  • A weekly-paid agency worker who has been on the assignment for more than 12 weeks gets the highest weekly amount they received in the last 12 weeks of the assignment.
  • An agency worker with a pay period that isn't weekly must use the highest pay period that falls within the last 12 weeks of their assignment and divide it to make a weekly average.

An agency must not try to avoid having to pay the agency worker between assignments by offering unsuitable jobs or providing work in the agency itself.

An agency must not terminate the contract because no suitable work is available until at least four weeks have passed since the last assignment ended.

Working for an umbrella company

Some agencies ask agency workers to sign up with a separate company, often called an umbrella company before they start finding assignments for them.

This arrangement usually means the:

  • agency worker becomes an employee of the umbrella company, receiving the employment rights that come with being an employee. However, they may occasionally be offered another type of contract such as the option of having their own Limited Company to work through
  • agency finds work for the agency worker
  • umbrella company charges the agency for any work the agency worker does
  • money paid by the agency to the umbrella company is the umbrella company's income
  • umbrella company pays the agency worker through the PAYE (Pay As You Earn) system
  • umbrella company can include a charge for processing the agency worker's timesheet.

Umbrella companies do not only act as a payroll service. They usually employ the agency workers and have the same responsibilities and legal obligations as any other employer.

Information about additional services offered by an umbrella company must be provided in writing. For example, fees to process timesheets. This includes who is providing the goods or services, how much it costs, who any money is payable to, and how the agency worker can cancel.

What should an agency worker receive from the agency before starting an assignment?

Before offering an assignment to an agency worker, an agency must:

  • ensure that the agency worker is suitable for the position to be filled, including checking they have the relevant experience, training, qualifications or authorisations, such as a right to work in the UK
  • provide the agency worker assignment details including:
    • the hiring organisation's identity and the nature of its businesst
    • the start date for the temporary work and the likely duration of the work
    • details of the position, type of work, location, working hours, any risks to health and safety and how the hirer has taken steps to mitigate these
    • what experience and training is required
    • whether any expenses are payable to or by the agency worker
    • the rate of pay and any other benefits offered by the hirer.

The agency worker must receive the assignment details at the same time as the assignment is offered to them. It must be provided in writing at this stage or within three working days if the information is initially provided verbally.

Can an agency charge agency workers a fee for their services?

An agency must not charge a fee to register the worker on its books or to find them assignments.

An agency may offer additional services for a fee, such as:

  • help to create a CV
  • training courses
  • providing transport services
  • accommodation
  • DBS checks.

The agency must not pressure an agency worker into using an additional service or treat them differently for not using its services. Therefore an agency must not make their job finding services conditional on paying for an additional service.

The agency must also provide in writing:

  • who is providing the goods or services
  • how much it costs
  • who any money is payable to
  • how the agency worker can cancel the service.

Agency workers that use an additional service must be allowed to change their mind and cancel it, without penalty. They may be required to provide notice. This is usually 10 working days' to cancel living accommodation and 5 working days' notice to cancel other services.