Agency Worker Regulations (AWR) - Opt in or not?

Lafuma

I've recently applied for a position via an agency, and it's all looking very promising

However, when I spoke to the agency about pay rates, they offered one rate but said they would pay about 10% more if I opted into AWR.

1. Is AWR something that I can decide whether or not to opt into?

2. If so, other than the extra 10% they will pay me, what are the advantages and disadvantages of opting in or not opting in?

I thought AWR was simply legislation to protect agency workers and ensure they have (mostly) the same pay & conditions as permanent workers after 3 months.

skyshadow

I've never heard of any agency offering more for you to Opt Into AWR.

There is a Swedish derogation clause which might be what they meant which is a loophole that while sounding good protects the agency by meaning they only need to offer you an hour a week of work which you're entitled to refuse.

AWR is a great scheme that ensures you get equal pay and conditions as perm employees so if you have been offered if I would say to take it

patman99

If you are working under the AWR(2010), then after a period of 12 weeks (in the same position), you are entitled to the same hourly rate as a permanent employee doing the same job.

The 'same position' aspect means that if, for instance, you are sent to work as a FLT driver and work in this position for 10 weeks, then the firm reassigns you to cover another role due to illness, then the clock stops on the FLT role and anew 12 week clock starts on your new role.
You will not get an equal wage for the FLT role after your employment reaches 12 weeks.

If, after 3 weeks, you return to the FLT role, the clock stops on the other role and restarts on the FLT, so 2 weeks later, you will get the same hourly rate as the permanent FLT drivers.

However, if you are employed under the Swedish Derogation, the Agency is lawfully required to pay you inbetween placements (they cannot employ you on a zero-hours contract). As a result, you give up the right to a matched hourly rate after 12 weeks in the same role, and no longer have the option to refuse an assignment as you are classed as a permanent employee of the Agency.

When on the S/D you still have the same 'day one rights', the same rights to holidays and the same rights to the same breaks as the directly employed staff after the initial 12 week period as you would under the AWR.


Personally I would only work under the AWR and never under the Sweish Derogation as you may well find that any extra they offer you to work under the Swedish Derogation is much less than you would get once 12 weeks have passed and you end up on the same hourly rate as the direct staff.

TheTracker

Check any restrictive covenant clauses in the contract with respect to opt in or out.

Lafuma

TheTracker wrote: »

Check any restrictive covenant clauses in the contract with respect to opt in or out.

The underlying contract for this position between the agency and my limited company makes no mention of AWR.


The specific additional agreement with regards to AWR simply states:

"It is agreed that contract number ****** will be deemed for all legal purposes as being opted into the Agency Worker Regulations 2010 (AWR)"

Hence my question.

lemontart

before I became ill all agency staff where I worked had no choice but to sign the new contracts under the Swedish directive or loose our jobs, no actual benefits such as equal pay or gain in equal paid holidays. etc

WolfSong2000

If you're working via a Ltd company rather than being employed directly by the agency then this may impact whether you are entitled to AWR - may be worth checking.

My understanding is that contractors working through Umbrella or Ltd companies get paid more, however this additional pay is intended to incorporate holiday, NI, etc.

Lafuma

WolfSong2000 wrote: »

If you're working via a Ltd company rather than being employed directly by the agency then this may impact whether you are entitled to AWR - may be worth checking.

My understanding is that contractors working through Umbrella or Ltd companies get paid more, however this additional pay is intended to incorporate holiday, NI, etc.

Thank you for your advice.

The rates quoted are indeed for me working via my own limited company. However, they are saying they will pay 10% more if I opt into AWR.

That would appear contrary to the advice you have given. But thanks anyway.

patman99

People paid via an umbrella company are paid more because they pay less Tax/NI.
The way the umbrella company pays the worker is to pay all the mileage as an allowance along with a £5 p/day allowance for food and a tool allowance. Thus, the worker gets paid a big chunk of their wages as tax-free allowances.

However, a lot of umbrella companies take a big cut of the wages for proccessing them. Even though it is highly illegal to charge a fee for handling a persons wages, they get around this by acting as the employer. They bill the company you are working at for the hourly rate you had agreed with the company, then pay you at a reduced hourly rate.

This shonky behaviour has actually lead to the Welsh Assembly banning the use of umbrella companies to pay contractors on Govt. contracts.

WolfSong2000

Lafuma wrote: »

Thank you for your advice.

The rates quoted are indeed for me working via my own limited company. However, they are saying they will pay 10% more if I opt into AWR.

That would appear contrary to the advice you have given. But thanks anyway.

Look into IR35 - bsically legislation that states that you can run into trouble if you are a Ltd company contractor who is behaving as if they were an employee of the organisation you're working for. Opting into AWR as a Ltd contractor would, I would imagine (and happy to be proved wrong) raise a red flag for HMRC who believe that if you are an employee, then you owe the necessary taxes associated with that, so you could not only lose the benefits of working through a Ltd company but also potentially be fined.

I've simply summarised my understanding IR35 as it is rather complex, but definitely worth investigating.

pooch

WolfSong2000 wrote: »

Look into IR35 - bsically legislation that states that you can run into trouble if you are a Ltd company contractor who is behaving as if they were an employee of the organisation you're working for. Opting into AWR as a Ltd contractor would, I would imagine (and happy to be proved wrong) raise a red flag for HMRC who believe that if you are an employee, then you owe the necessary taxes associated with that, so you could not only lose the benefits of working through a Ltd company but also potentially be fined.

I've simply summarised my understanding IR35 as it is rather complex, but definitely worth investigating.

I don't think what you imagine to be correct, is the current, correct interpretation

IR35 and the AWR are not linked, despite initial indications to the contrary in the first publication of the BIS guidance. The second issue of the BIS guidance has removed reference to IR35 tests following consultation with the Association of Recruitment Consultancies (ARC).

...

The intention of the AWR is not to establish whether an individual has an employment relationship, but rather whether they are an agency worker. The definition of an agency worker in the AWR is broad; an individual is an agency worker if they are (i) supplied to a hirer; (ii) work under the supervision and direction of that hirer, and (iii) there is a third party involved in such arrangements. This does not relate to the employment status tests under IR35.

It is possible for a contractor to be agency worker and not have employment status under IR35 tests....

Source: http://www.lawspeed.com/news/awr/IR35_and_the_AWR.aspx (July 19, 2011 )