The new regulation- 13A of the Conduct Recruitment Agencies will take effect from 6th April 2020. From April 2020, all agency workers will issue Key Information Document before agreeing their terms with employment businesses. So the first thing the agency will receive is this document. The Key Information Document does not apply to the existing business but the document will be required with the new employment businesses. Also, all agency workers are entitled to provide written statements along with Key Information Document.
Objective of the New Regulation:
- The intention of the Key Information document is to provide transparency of information for agency workers in terms of payment. It will give a clear idea relating to deductions and overheads that might affect their pay before agreeing on any terms with the employer.
- Businesses need not provide all the information but only the “key information”- an overview of how their pay will be affected over a specified period of time. The information need not be the exact figures, but a minimum amount an employment business expects for agency workers.
- It is also expected to mention the list of tax and NI deductions made on their PAYE income to propose their take home pay.
- It will help workers to choose the payment method (PAYE or umbrella company) as the document will show various key facts corresponding to the payment method.
- The Key information document must be updated at all times whenever there is any change in the information relating to deduction, or PAYE method or any other key aspect.
What You should Know:
- The Key Information Document must be labelled and must include a brief explanation of its purpose on the top. It should also contain the contact details of the agency workers at the top of the page.
- The document should be easy to understand and confined to two pages.
- The key information document must be given to both the company and the agency worker. The employment business must ensure that the agency worker document reflects the details of the choice of method made by them.
- This 13A regulation is applicable only to agency workers who signup to an employment business after 6th April 2020.
- If an intermediary or an Umbrella Company is involved, the employment business has to gather information from the intermediary or umbrella Company as required in the Key Information Document.
- Employment businesses though, will not be held responsible for any inaccuracy in the document.
- Umbrella Company has to notify employment businesses for any changes in the document.
- An agency worker may request a copy of the information document and employment business has to provide it within 5 business days.
Information to include in Key Information Document
When the agency worker is in a relationship with the employment business where an employment business will be engaging with the agency worker and paying them (PAYE), the following facts need to be included:
- Name of worker
- Contract type
- Identity of the employment business
- Payment Method
- Rate of Pay
- Pay Intervals
- Statutory Deductions (Income tax, NI, student loan etc.)
- Non-statutory deductions (Private healthcare)
- Any fees for goods and services
- Any other benefits (gym membership)
- Leave Entitlement
When an intermediary or an Umbrella Company is used to employ agency workers and pay them, the following facts need to be included:
- Name of worker
- Contract type
- Name of employment business
- Name of intermediary / an umbrella company
- Who will employ the worker
- Who will pay the worker
- Pay intervals
Agency workers must keep up to date information about the terms of their engagement and hence revised Key Information Document must be issued when the information changes. From 6th April 2020, employment businesses have to keep records of the revised and finalised information in the key information document. The information must be correct and up to date at all times.