Agency Worker Guide

By April Harrington
04 Jul 2024

Employers sometimes need to hire temporary agency workers to help in certain areas of the business, such as seasonal work. In these cases, employers must be aware of what the rights of their agency workers are, and what they are entitled to.

If you happen to find yourself in a situation where an agency worker believes that their rights or contract has been breached, they are able to submit a claim with an employment tribunal.

In this article, we are going to cover what an agency worker is, what their rights are and what the law says about them.

If you need immediate support, get in touch with one of Croner's dedicated experts on the partnership line 0844 561 8133.

What is an agency worker?

An agency worker is a person who has been provided to your business from a temporary work agency (TWA), a recruitment agency or an employment business, to work with your company for a temporary time period.

Essential requirements for an agency worker

  • A contract between the worker and the temporary work agency.
  • The worker is temporarily supplied by the temporary work agency.
  • The worker is supervised and directed  a member of your company while they are working with you.

What employment rights do agency workers have?

Depending on how long the agency worker has worked for your business will depend on what their rights are entitled to.

Rights from day one

From day one of work with your business your agency workers will be entitled to the following:

  • Statutory sick pay.
  • All health and safety protections.
  • Notified of job vacancies.
  • An itemised payslip.
  • National minimum wage.
  • Access to the onsite facilities, (for example, car parking, on-site gyms, etc.)

In case that an agency worker makes a request, you are required to provide them with a written statement outlining the reasons.

Rights from 12 weeks

Employment law in the UK states that agency workers have certain rights after a specific period of time. This is when an agency worker has completed the qualifying period of twelve weeks.

If an agency worker has spent more than twelve weeks in the same job, hirers are not allowed to treat agency workers less favourably than their permanent employees when it comes to pay and benefits.

If an agency worker feels they aren't being treated in the same way as their permanent employee counterparts, they have the right to ask you why.

After the twelve-week period, agency workers have the following rights.

  • Automatic pension enrolment.
  • Rest periods and rest breaks.
  • Same basic pay as permanent employees who are doing the same job.
  • Paid annual leave.
  • Night work.

The number of weeks an agency worker has worked is paused if they stop working for a period. Breaks of 6 weeks or less do not count towards the qualifying period. There are other scenarios that do not count i.e. sick leave for up to 28 weeks.

As your agency workers aren't classified as employees most of them will be unable to claim unfair dismissal and redundancy pay.

How do agency workers get paid?

Hirers aren't responsible for paying their agency workers directly. An employer will pay the employment agencies and employment businesses who will then pay the agency workers.

Employers should ensure that when they pay the agency, that they include the workers national insurance contributions and statutory sick pay.

The agency will take a fee for placing the agency workers with you, and then pay the remaining money (also referred to as the assignment rate or limited company rate) to the agency worker.

As mentioned above, after the 12th week in the qualifying period, any agency worker needs to be paid equally to the permanent employees who are working in the same role. It's also the responsibility of the agency to process any maternity pay for the workers.

Agency workers and Holiday pay

Agency workers used to be entitled to 5.6 weeks including any bank holidays. However as of April 1st the rules for agency workers who work irregular hours or part of the year have changed. Employers now have a choice as to how to deal with this (Subject to contractual entitlements). They can either:

  • Provide for annual leave accruing based on 12.07% of hours worked in the pay period and then pay holiday pay at the time that leave is taken (based on average normal pay over the previous 52 weeks in which wages were payable).

  • Roll up annual leave pay by paying holiday pay, at the rate of 12.07% of total pay earned for every hour worked. This method means workers are not paid when they take leave.

Do agency workers have a notice period?

When an agency places a temporary agency worker with your business, they will agree the length of which their notice period is. There isn't presently a law that puts an obligation on the employers to agree to a notice period for agency workers.

Although, employers can ask any temporary agency workers to give them the same amount of notice for absences as your permanent employees.

Agency workers regulations 2019

By law, agency workers shouldn't be treated differently than permanent employees (after 12 weeks). Since April 6th 2020, agency worker rights have been improved. Following the regulation amends, the opt-out provision after the 12 weeks for agency workers to receive the guaranteed level of pay was removed.

This means that agency workers are entitled to equal pay, if they are paid between assignments.

Key information document (KID)

A key information document (KID) was developed to improve pay transparency for agency workers, and will offer individuals key information about the assignment they are working on.

The agency are responsible for providing the agency worker with key information documents. You should ensure your documents include the following pieces of information:

  • Worker name.
  • Type of contract.
  • Start date and working hours.
  • Employment agency business name.
  • Identify the party who is responsible for paying worker wages.
  • Statutory deductions.
  • Any fees for goods and services.
  • Holiday entitlement.
  • Rate of pay.
  • Sample payslip (giving estimate of take-home pay after deductions).
  • Other employee benefits.

The agency business should tell the agency worker if there are any changes to the terms and conditions of their contract, and provide them with new documents.

Get expert support

Agency workers can help your business get through busy periods and help alleviate the pressure put on your permanent workers. But it's imperative that business owners and employers know what their agency workers rights are.

If you need further support on hiring agency workers into your organisation, get in touch with one of Croner's dedicated experts, they are on hand 24/7 to help you deal with any HR and employment law issues. Get in touch today on 0800 561 8133. 

About the Author

April Harrington

An experienced Senior Employment Law Consultant, who has worked for the group for over 9 years. April specialises in discrimination legislation. April has an extensive background in training, as well as recruitment and hospitality.