AWR advice needed

Dexie

My boyfriend has been working for a local authority since February this year through an agency. He is paid through an umbrella company and was not given any choice in this matter. He does not benefit substantially from this arrangement, as any small tax saving is offset by the payroll admin fee charged by the umbrella company.

After twelve weeks he became aware that under the AWR he was entitled to pay and benefits the equivalent of a permanent employee. He was advised that the equivalent rate was £16.67, a rate substantially higher than the starting rate. Following months of pushing, the agency implemented the increase and backdated it to the 13th week, but they only increased it to £13.38 rather than the £16.67 advised by the council. After some pestering, they stated that their reasoning for this is that, because he is paid through an umbrella company, he is liable for his own Employer’s NICs and in the absence of what they call ‘agency uplift’, which I assume is an extra fee that they expect the council to pay, this cost is to be deducted from his wage.

In addition to this, his holiday has been rolled up with his basic rate i.e. the rate of £13.38 is separated out into basic of £11.94 and holiday pay of £1.44.

As far as I can see he is not getting equivalence with a permanent employee on two counts: 1) he is not receiving the full basic rate of £16.67 as he has been made liable for Employers NIC and 2) he is effectively not getting holiday pay as it is being rolled up into his basic rate.

Does he have a claim against the agency or have we misunderstood what AWR means? And does anyone have any advice on how he should go about resolving this? The agency seem to be pretty intransigent, so is it worth approaching the council and asking them to pay the ‘agency uplift’? (this is a term used by the agency).

Thanks in advance for any help.

Dexie

Quick update on this.

The local authority my boyfriend is working for have confirmed the agency's position on this. They state that he would only be entitled to the 'full' equivalency rate of £16.67 if he were set up as a limited company. As he is PAYE (albeit through an umbrella company) he gets a lower rate of £13.38 which is meant to cover the umbrella company's liability for Employer's NIC. They have not responded to his queries about holiday pay.

As I see this, the result of this is that my boyfriend is not receiving equivalence with his permanent equivalent, as he is neither receiving the same rate of pay through being compelled to bear the cost of Employers NI, and through not being paid holiday pay.

Am I correct in thinking this, and any ideas on what we should do next?

keyser666

That doesnt make sense to me that it covers the umbrellas liability. The umbrella company pays it on his behalf and they should still be paying the Umbrella company £16.67.

Other option is to setup a LTD company for as little as a tenner and pay an account