AWR & Contractors

AWR Quick Reference Guide

Much is being said about the Agency Worker Regulations, however what will it really mean for you?  To enable you to get a feel for AWR, we've summarised what this actually means for contractors below.

AWR - What is it?

EU legislation that came into force from 1^st October 2011, aimed at ensuring temporary agency workers receive equal treatment after a 12 week qualifying period when compared to their directly hired, permanent counterparts.

AWR - Who is affected?

All contractors/agency workers are within scope of AWR if they work through an umbrella company or via agency PAYE system, unless:

• They operate through a Limited Company (PSC) and are in business of their own account (outside IR35)
• There are aguements that where a worker is in a 'Profession' and the hirer is a client of that profession (i.e. a certified accountant working for an accountancy firm) there is an excemption from AWR

AWR - The main points

There are two main areas within AWR you will need to know about - the first is benefits that begin from Day 1 of your assignment.  This is the responsibility of the Hirer to enforce.

Day 1 entitlements

• Access to client facilities (canteen, crèche, transport services etc)
• Access to all internal job vacancies

Week 13 entitlements

The second is regarding entitlements that kick in once you have completed a 12 week qualifying period at your end client/hirer and include:

• Basic pay
• Annual leave
• Overtime
• Bonus or commission
• Vouchers/stamps

AWR - So what will be different?

There will be some differences to how contractors work through umbrella companies come October 2011.  There are several models that you will come across particularly when using umbrella companies:

1.     Matching Permanent Pay Model

In many respects, this model will see the minimum amount of disruption to your assignment.  Here Umbrella Company, Agency and End Client will all communicate and provide what is called 'Comparator Information' when you reach 12 weeks in your assignment.  This data will ensure that you receive at least equal treatment with regard to the 12 week rights above, particularly for Basic Pay.

Many contractors will already earn more than their perm counterparts anyway, so you will already be receiving these minimum benefits.

You are entitled to request this comparator data once you have completed 12 weeks at your assignment from either Umbrella Company or Agency.

Please note - this is the DEFAULT service model offered by Nasa Umbrella.

2.     Swedish Derogation Model

This is an alternative model to the above which sees some slight differences in your set up as a contractor.  These include a Permanent Contract of Employment and the entitlement to Payt between Assignments should you be available for work but not currently in contract.

By agreeing to a 'Permanent Contract of Employment' with your umbrella company you may be entitled to receive up to 4 weeks' pay whilst you are in-between assignments.  By doing this you agree that you will forego your right to basic pay under AWR.  This is commonly known as Derogation Pay (or Pay Between Assignments PBA).

Where you are in-between assignments, the pay will be at least 50% of your highest payment within the previous 12 weeks.

There are number of variations as to how the scheme is operated, particularly relating to the accrual or payment of the Pay between assignments,or Derogation Pay.

Please note that by agreeing to this model, you will forgo your entitlement to basic pay under AWR.

Nasa Umbrella does offer this service model and please note, we have maintained our £9.99 weekly fee for this service however - so there are no additional costs.

3.     Profession Exclusion

There are arguements that the regulations allow for an exclusion from AWR for those contractors who are classed as working in a profession and where the client is a business operating in that profession.

The guidance is very ambiguous but under standard definition of a profession, we believe the following are criteria that demonstrate you to be working in a profession and will be able to use the profession exclusion:

• Hold professional qualifications or certifications in your field
• Member of professional industry body (Chartered Institute etc)
• Perform a role involving high levels of skill (i.e. average person could not perform your role)

Nasa Umbrella does not offer this service model.

4.     Limited Company Services

If you are a higher earner (>£200 per day), and intend to contract long term, a limited company may be a preferable option.

Where you are genuinely in business on your own account AWR will not apply.  As such many agencies and clients may prefer that you set up a Limited Company as they will have less admin and compliance to undertake when placing you.

Nasa Consulting offers services of this nature from £99 + vat pcm and further details can be found here.  Should you wish to contact us to discuss this further please call (0117) 929 7683 or click here.

Summary

AWR guidance from BIS can be found here (aimed more at clients, agencies & umbrella companies), or for the braver souls the legislation is available in full here.  There is a more contractor/temp focused summary at Direct.gov.uk which you can find here.