Recent legislation affecting temps
The legislative environment for temporary workers is constantly changing; below, we have summarised recent and forthcoming changes that may affect you as a temporary worker.
VAT charges on supplies of temporary workers
In March 2008, ‘Budget the Government’ announced that the Staff Hire Concession and the Business Brief 10/04 concession would be withdrawn on 1 April 2009. These concessions have been in place in various guises since the mid 1990s, permitting temp agencies to charge VAT only on their commission and not the overall cost of placing the temp.
As of 1 April 2009 employment agencies will charge VAT on overall cost, adjusting contracts, charges and invoicing arrangements accordingly. Despite attempts across the recruitment sector to find a workable solution, alternatives have been rejected by clients as carrying additional employment risks.
Particularly affected are banks, financial institutions, charities, private hospitals and care homes, none of whom can reclaim the VAT charged to them. This change does not effect the temporary worker as it effects the total cost a client pays rather than the pay rate of the temporary worker.
The Equality Bill
The Equality Bill was published in mid May 2009. As a temporary worker, these provisions are designed to protect your interests. The main provisions are explained below:
Public Sector Equality Duty and procurement processes
Currently, Public Sector bodies must take steps to promote equality on the grounds of gender, race and disability. The Equality Bill brings all the discrimination laws into a single unified duty. This will extend to matters relating to discrimination on the grounds of age, sexual orientation, religion and belief, pregnancy and maternity and gender reassignment.
Rather than taking steps to promote equality, the Bill requires public authorities to take steps to advance equality as this is regarded as a more flexible provision. The Bill will also look at how public authorities will implement this duty when they are procuring, which will have a significant impact on suppliers in the Public Sector.
Gender pay gaps
The Bill proposes reporting gender pay gaps in any public authority with over 150 employees and seeks to place the same voluntary reporting requirement on the Private Sector for businesses with over 250 employees. Depending on how successful the voluntary reporting is, this may be made compulsory after 2013.
The Bill contains proposals on positive action
Under these proposals it would be made explicitly possible to pick a candidate from an under-represented group if the other candidate(s) were equally suitable. This would not allow positive discrimination, where candidates from underrepresented groups are picked over those who are more suitable. Lobbying groups are pressing for clear guidance on this matter so employers are aware of the boundaries.
Agency Workers Directive
The Agency Workers Directive was published by the European Parliament in December 2008. The UK Government has three years from that date to implement it into UK law and this week it published its consultation paper on draft regulations that will do just that.
These will entitle temporary workers, where an assignment has run over 12 weeks, to the same basic pay and employment conditions (such as paid holiday) as someone who was recruited directly. The Government has not yet published its timetable for implementing these regulations – it could be this year or as late as the end of 2011.
The important point from a recruiter’s point of view is that the UK legislation be sufficiently flexible to ensure the UK temporary worker market is not overly restricted. As soon as further information is available, Michael Page will update you.
