In a recent employment tribunal (that you can find here) contractual paperwork between a worker and an agency has been examined, resulting in the agency in question being ordered to pay £36,000 to the worker in employment costs for not stipulating a clear breakdown of costs. It’s understood that while income tax was referred to, employment costs such as Employer’s NI and the apprenticeship levy were not, leading to the result. While this case will likely go to appeal and is still ongoing, it’s a timely reminder to agencies of the vital importance Key Information Documents play, and ensuring that all agency workers receive a clear, concise explanation of their method of payment.
Key Information Documents – a recap
Since April 2020, all agency workers must be given a Key Information Document before agreeing terms with a new recruitment business. This written statement will outline key pay related information and is intended to provide more transparency for the agency worker.
As the worker's primary interaction is with the recruitment business, that business is responsible for issuing the KID upon worker registration, usually prior to them choosing to register with an intermediary for payment. KID’s provide agency workers with pay related facts and details about their engagement. They should be able to see how deductions and fees affect their pay through the supply chain.
Key things to remember;
· The KID must include representative examples of all deductions to a worker’s pay (real numbers must be used, but these don’t have to represent the worker’s specific assignment).
· A different type of KID must be issued depending on the type of engagement – for example, is that worker Umbrella PAYE, Agency PAYE or LTD company? This must be made clear.
· A revised KID must be issued each time the facts reflected in the document change; for instance if a worker changes Umbrella company or pay method, a new KID will need to be issued.
· If multiple engagement methods may be available when the worker registers with the recruitment business, it may be good practice to have a key facts page covering all payment methods, with the specific KID issued once a final choice has been made.
Speak to Clipper Contracting; we have the capability to support you issuing KID’s if for whatever reason you cannot. It’s key that agencies are transparent in rates of pay and the paperwork must support this. As ever, we’re on standby to support you where we can.
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