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AWR having minimal impact on IT contractor market
Posted Dec 18, 2011
A recruitment body says that the recently implemented Agency Workers Regulations (AWR) appear to be having a limited impact on the professional contract market, and the demand for contractors has remained strong.
These are some of the findings which have emerged from meetings between the Interim Management Association, and the REC (Recruitment & Employment Confederation) since the new agency worker rules came into force on 1st October 2011.
The feedback received from members of the two organisation suggests that the AWR has had only a limited impact on the contracting market. Of course, 'high end' contractors were never the original targets of the legislation, which was created to provide some protection to 'vulnerable' workers.
Although limited company contractors should be excluded from the scope of the AWR if they are 'in business on their own account', umbrella company contractors are affected.
Swedish Derogation solution
Many umbrella providers have implemented the Swedish Derogation employment model in the IT contracting sector, which the REC says is a way of keeping professional contractors on the books of a single recruitment agency, rather than them working via a number of different providers.
Under this model, umbrella company contractors are employed by the agency, and paid between assignments, and therefore they can no longer claim equal pay.
Focus on client awareness
Commenting on the latest findings, Tom Hadley, the REC's Director of Policy and Professional Services said:
"It is encouraging to see that the regulations are having little or no impact so far at the higher end of the market. However, we must not take this for granted and must continue to raise awareness amongst client organisations of what the regulations mean and do not mean.
"The demand for contractors and interim managers remains strong despite the AWR coming into force in October and we will continue to monitor the situation as we approach the first 12 week milestone."
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