Ready for full transparency on your agency workers’ pay?October 21, 2019
The Good Work Plan’s Key Information Document is your responsibility as a recruitment business
– make sure you know the rules.
If you’re using an umbrella payroll service or managing your own temporary workforce PAYE payroll, new regulations mean you need to get ready to significantly change your current process, and they’re coming soon so now is the time to start preparing.
What are the new regulations?
A new piece of law derived from the ‘Good Work Plan’ has introduced the requirement for recruitment agencies to provide a Key Information Document (KID) for each agency worker. Taking effect from 6 April 2020, 13A of the Conduct of Employment Agencies and Employment Businesses Regulations requires a Key Information Document to be supplied to any agency worker before agreeing on terms with any employment business.
In short, any recruitment business must clearly communicate to their temporary workers the minimum amount they expect to achieve with a full breakdown of all deductions to be made to the workers’ pay. It is intended to improve the transparency of information for agency workers, particularly around pay and to ensure that workers have a clear idea of how any fees and deductions will affect their final payment.
Download your free Key Information Documents
What needs to be included in the new KID for each agency worker?
The Employment Business must clearly reflect the minimum amount they expect to achieve for a worker and include a description of all deductions to be made to the workers’ pay. For non-statutory deduction and fees (e.g. an umbrella company's margin), the key information document must EITHER state the amounts to be deducted OR explain how they are calculated.
As an employment business, you will also need to have a standard “key facts” page corresponding to each payment method, e.g. PAYE, different umbrella companies, PSC etc. These should also be revised when a new deduction is made, such as student loan repayments or contributions to a private healthcare scheme, or when a worker’s right to equal treatment under AWR takes effect.
The responsibility to issue the KID is wholly on the recruitment business, even if their temporary workers are paid through an intermediary or umbrella company. This means the recruitment business will need to invest the necessary time in gathering information from these third parties to complete these document fully.
Finally, the worker should be able to fully track the difference between the gross amount paid by the employment business to the intermediary or umbrella company and the net sum that the worker receives.
What details should be included?
Each Key Information Document will need to clearly outline the following (and be updated at any stage as and when any deductions change);
- Name of worker
- Contract type
- Name of employment business
- Name of intermediary or umbrella company
- Who will employ the worker
- Who will pay the worker
- Any business connection between the intermediary or umbrella company and if the employment business
- Pay intervals
- Rate of pay to the intermediary or umbrella company
- Statutory deductions from intermediary or umbrella income
- Non-statutory deductions from intermediary or umbrella company
- The expected or minimum rate of payment to the individual
- Statutory deductions from the workers’ pay
- Non-statutory deductions from the individuals pay
- Any fees for good or services
- Any other difference between the umbrella company's income and the worker's net pay
- Any other benefits
- Leave entitlement
- Any opt-out agreement under Regulation 32
Sound ominous - CONTACT US NOW
Talk to Hive360 about how our outsourced payroll solution can manage this transition efficiently for you, AND unlock an array of added value worker benefits and welfare support that will also help you to increase your competitive positioning.
Call us on 0121 661 4851