Agency Workers Regulations - draft guidance released
Posted Apr 4, 2011
Draft Agency Workers Regulations guidance has been released for comment. Limited contractors who are in business on their own account should not be affected by the new rules, but umbrella contractors will.
The Agency Workers Directive will come info force in October 2011. The rules are aimed at protecting agency workers by providing them with 'equal treatment' after 12 weeks in a given job.
The impact of the Directive has been subject to much speculation within the contracting industry over the past few years, particularly over whether limited company contractors will be affected or not.
According to the draft guidance: "Simply putting earnings through a limited company would not in itself put individuals beyond the possible scope of the Regulations."
The draft guidance, which is available for comment until April 15th 2011, makes it clear that individuals who find work through a temporary work agency but are in business on their own account are likely to be outside the scope of the new legislation.
The 'employment status' of a contractor, once again, will seem to determine whether or not a contractor will be covered by the AWR. Essentially, if you are not caught by the IR35 rules, you will not be caught by the AWR rules.
It will be interesting to see how the draft guidance will affect the relationship between contractors, agencies and clients over the coming months, and if incorporation is seen to be a more popular route for contractors to go down or not.
The REC (Recruitment & Employment Confederation) says that recruitment agencies would need to be provided with some kind of checklist to determine whether a contractor is 'in business in their own account' or not. You can read REC's response to the draft guidance here.
For more information, try Barry Roback's recent article - Compliant limited companies have little to fear from Agency Workers Regulations.
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