Agencies could face massive costs post implementation of AWD

High fives all round we hear you cry! Well, not quite…

The AWD is designed to ensure that agency workers have the same rates of pay and employment benefits as their permanently-employed colleagues. The latest timetable means that the regulations will become UK law before the next general election, and possibly as soon as February 2010.

So while the vast majority of limited company contractors breath a collective sigh of relief, not everyone in the industry is smiling.

Although recruiters now have extra time to prepare for the new regulations, many are concerned about the costs associated with becoming compliant under AWD, particularly at a time when volume and margin targets are being squeezed.

Martin Totty, MD of umbrella company Pulse, said the government had ignored industry concerns and that Pulse would be helping agencies to meet their new obligations.

Mr Totty said, "This is another unnecessary burden on recruitment agencies. Service professionals usually have better terms than the permanent workforce anyway, and many lower-paid workers will be encouraged to seek self-employment status so they can continue to compete.

"But in all cases, recruitment agencies are going to be at risk from employment tribunals. It would be easy to make the wrong assessment about self-employment status or to fail to secure the same terms for temporary workers as permanent colleagues. Agencies could face massive costs if they get it wrong.

"We are in discussions with our agency partners about how we can help. "

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