Agency Workers Regulations - Swedish Derogation

A recent poll carried out by contractors' organisation, PCG, found that the recently implemented Agency Workers Regulations have had a very limited effect on most freelancers.

Almost 80% of contractors unaffected by new rules

The AWR came into play on 1st October 2011, and provides additional rights to agency workers after they have been working for the same client for 12 weeks or more.

Although the majority of professional contractors will work via their own limited companies and be in business on their own account, the AWR has caused uncertainty for clients, contractors and agents alike due to the ambiguous way many parts of it are worded.

According to the contractors' group, the vast majority (77%) of participants said that they had not been affected at all by the AWR rules.

Just over 16% said that they had been affected a little, and around 7% had been affected 'a lot' by the implementation.

These findings tally with an initial assessment carried out by REC in December 2011, which found that 'higher end' contractors (which is likely to include most of the respondents to the PCG poll) are unlikely to be affected by the AWR.

Firms report increased hiring costs due to AWR

In another recent poll, carried out by Eversheds, the impact of the AWR on companies appears to have been more profound.

According to this poll, the cost of hiring new staff had risen by 10% on average as a result of the AWR, with some firms reporting hikes in hiring costs of 25% to 50%.

Overall, the majority of firms have found ways to absorb the extra costs, by relying on AWR exclusions, such as the so-called Swedish Derogation Model.