Understanding temporary and agency workers

This section explains who qualifies as a temporary or agency worker and outlines some of their rights and what you need to do to work towards compliance.

Who classifies as a temporary worker?

Temporary workers fall under the category of non-permanent staff as opposed to permanent employees. Agency work is a form of employment where individuals are supplied by an agency to work temporarily for the organisation. This type of contract gives rights and legal obligations to the agency, the employer and the worker. The employer pays the agency, including the employee’s National Insurance contributions and Statutory Sick Pay.

Temporary workers can include: 

• Short-term employees
• Short-term self-employed workers
• Casual workers
• Agency workers contracted by an employment business

Some staff may work temporarily for your business under agency arrangements.

Hiring temporary workers: some helpful information

If your organisation is planning on hiring temporary workers, remember to take into consideration employees’ rights according to UK legislation. In addition, have your HR team conduct  pre-employment checks to make sure that the legislation is applied.

The law that covers the rights of agency workers came into play on 1 October 2011. Whether the person you recruited falls under this legislation depends on the following circumstances:

• The employment status of the worker
• They are defined as a ‘worker’
• They qualify for employee rights due to having completed any required continuous employment

Understanding the difference between employees, workers and independent contractors is important, as each group is entitled to different rights. When hiring agency workers, both you and the agency share responsibility for ensuring they receive the correct pay, conditions and legal protections. Additionally, when considering the composition of your staff, remember that agency workers are part of your overall workforce. 

Differences between workers and employees

In the United Kingdom, courts use certain tests to decide if someone is a worker or an employee. Employees have a full contract and generally more rights, while workers have fewer rights but still get things like minimum wage and paid holidays. Part-time staff are also legally protected in some areas. 

Note that after 12 weeks in the same job, agency workers should be treated the same as permanent staff when it comes to pay, benefits and working conditions.

Employment agencies vs employment agency businesses

There are some essential differences to consider between employment agencies and employment agency businesses. 

Employment agencies

Employment agencies connect candidates with permanent jobs, but do not pay them. Once hired, the worker becomes an employee of the business with full employee rights. 

Employment agency businesses

Employment agency businesses pay the temporary workers they supply to your business. These workers work on fixed-term assignments under agency arrangements and are paid directly by the employment agency business, not your company.

Temporary workers hired through an employment agency business have the same rights as the employees of the company they work for. The agency provides them with written documentation confirming their temporary status, as required by the Agency Workers Regulations 2010.

Hiring employment agency business workers: a guide for employers

If you hire agency staff, they require fair treatment. Workers that are supplied to you by an employment agency business are entitled to many of the same rights as your permanent staff, especially after 12 weeks in the role. We have listed below some of an employer’s obligations when it comes to this kind of employment.

Equal treatment and legal obligations for agency workers

When your organisation takes on an agency worker, the agency should be given accurate details about pay and working conditions. This transparent communication ensures the worker receives the same treatment as your employees after 12 weeks, under the Agency Workers Regulations 2010.

From day one, agency workers have access to shared facilities like canteens and parking. After 12 weeks, they’re entitled to equal pay, holiday entitlement and working hours as your staff in similar roles. These rights apply to most agency workers, except those who operate as one-person limited companies.

Employers and agencies share the responsibility of following the law and communicating clearly with agency workers.

Job vacancies and ongoing entitlements

Temporary and agency workers do not have an automatic right to a permanent contract, regardless of how long they have worked for you. However, they can be considered for permanent roles based on your business needs. Some employers offer what is referred to as temp-to-perm positions, where a temporary role becomes permanent after a set period.

In order to give agency workers the same career opportunities as your permanent staff, bring any internal job vacancies to their attention from their first day. This can be done by posting notices or by giving them access to your intranet. 

If a worker feels their rights are being ignored, they can request written details from you or the agency that facilitated their recruitment. You have no more than 28 days to respond. Ultimately, it’s up to both you and the agency to make sure workers are informed, fairly treated and supported throughout their time with you. Doing so helps promote your employer brand.

Equal treatment rights: a step-by-step guide

Agency workers and temporary workers can have two types of rights depending on how long they have been working with you for. Agency workers are entitled to rights that come into force from day one, as well as week 12 rights. Here is a step-by-step guide to help you understand agency workers rights:

Stage 1, rights for temporary and agency workers

From their first day, agency workers have the same access to shared facilities. They’re also entitled to the same rest breaks and working conditions. Temporary workers and agency workers are also entitled to the following rights:

• Deductions from wages cannot be made unlawfully
• You cannot discriminate against them on the basis of sex, race, religion or orientation according to the Equality Act 2010
• They have the right to work in a workplace that is safe
• They can be accompanied at grievances or hearings

Before they start, make sure agency workers get appropriate employment information, such as a written statement or key facts sheet, just like permanent staff.

Stage 2, week 12 rights for temporary and agency workers

After 12 continuous weeks in the same role, a temporary or agency worker gains extra rights under the Agency Workers Regulations (AWR). These include:

Paid annual leave

Holiday pay should reflect the hours they’ve worked. For example, if a worker did 30 hours a week for 12 weeks, use those hours to calculate their holiday entitlement. Their contract or key information document clearly states how much leave they get.

Enrolment in the same pension scheme

Workers who meet eligibility criteria must also be enrolled on your workplace pension scheme, just like permanent staff.

Equal pay

Equal pay means treating agency workers the same as permanent staff for:

• Basic salary
• Overtime and unsocial hours pay
• Annual leave pay
• Commission or performance bonuses
• Non-cash benefits like lunch or childcare vouchers (if they don’t replace salary)

You can conduct job evaluations to ensure a fair, transparent pay structure. 

The 12-week qualifying period starts on the first day of the assignment. The count is not restarted if there are short breaks for sick leave, jury service, annual leave, industrial action and breaks of six weeks or less. Time off for pregnancy, maternity, paternity or adoption leave also counts towards the 12 weeks.

The restart of the period is applicable for significant changes in the role, if the worker starts working in a different place or if they take a break longer than six weeks between assignments with the business. 

It is the business’s responsibility to keep track when the 12-week period starts and whether any resets apply. This helps you know when the worker becomes entitled to equal treatment.

What rights do agency workers not have?

There are a few rights that agency workers are not entitled to that your employees are. These include:

• Statutory and contractual redundancy pay
• Unfair dismissal
• Maternity, paternity and parental leave (although you may choose to offer this)
• Employment terms and conditions
• Occupational pensions (agency workers receive automatic pension enrolment from October 2012)
• Occupational sick pay

It is important to understand the rights of agency and temporary workers and how they may vary depending on how long they work for the company.

Frequently asked questions about agency workers and temporary workers

How do you know if workers supplied by agencies are taxed as employees?

If a worker is supervised by the employment business, they are treated as an employee for tax purposes. This means their pay is subject to PAYE and National Insurance contributions.

What should I do if I don’t have employees with a similar role to my temporary workers?

You should assess their rights based on comparable pay scales in your business or market rates for the role. This helps ensure fair treatment even without exact employee matches.

Do the Agency Workers Regulations 2010 apply to self-employed workers or those supplied via umbrella companies?

Self-employed workers are not covered by the Agency Workers Regulations 2010, but umbrella company workers are. Self-employed individuals still have protections against discrimination and should receive the same health and safety standards as your employees.