Agency Workers Regulations: Dispelling The Myths

April 25, 2012 by  Filed under: Taxes 

Since the launch of the Agency Workers Regulations (AWR) there have been many misconceptions on the impact the new legislation will have on contracting in the UK. Because of this many myths have been surrounding the new legislation.

The Agency Workers Regulations (AWR), also known as the Agency Workers Directive (AWD) was launched on 1 October 2011. This new legislation was important to umbrella contractors because this now entitled agency workers to employee benefits from the first day of working. Ensuring that over time, agency workers would receive the same entitlements and benefits as employees at the company.

Not long has passed since it’s launch, but thankfully there has been little impact on contracting figures in the United Kingdom, across many industries. Many believed that the impact would be much greater, with large debates over the interpretation of the new legislation. That ultimately affects every party involved. Such as agencies, agency workers and other intermediaries.

Therefore it’ easy to imagine why there are different opinions on the matter, created many myths and misconceptions that are now surrounding the agency workers regulations. So what are these myths and misconceptions and how do they impact on contractors?

Myth 1: A common myth is that after the launch of the AWR, ‘all contractors must work through an umbrella company’. This is false, because there are many different ways that contractors can choose as their method of processing their payroll, meaning many will be with umbrella companies and others choosing to create a limited company. Even though limited company contractors fall outside the scope of AWR, this will have no bearing on companies wishing to work with those, who do not fall into the scope of the agency worker regulations.

Myth 2: ‘All contractors will be much more expensive, after the AWR launch’, is also false. The AWR does not affect the cost of contractors, regardless of the perception of the new legislation has had in the press and by word of mouth.

Myth 3: ‘All liability must be transferred to the contractors in new contracts, under the AWR’, is yet another common myth, that exists today.

These misconceptions, along with many others, have been alive ever since the new regulations were first discussed and introduced. But hopefully by clearly dispelling some of these myths, will help clear any confusion surrounding the AWR, and it’s reason for being introduced. For both contractors and for any umbrella company.

Harvey McEwan writes to offer information and advice on a variety of areas, from technology to holiday destinations. Read through Harvey’s other articles here to find out more.

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