Holiday Pay for Temporary Workers – an Update for Recruiters
A recent ruling on calculating holiday pay could have significant implications for any recruitment agency that has temporary workers on ...Read more
2018 could be seen in years to come as the beginning of the end of the “Gig Economy” and how employers treat contractors and employees in general. That is certainly what the Good Work Plan has set out to do, which has been published as the Government response to the Taylor Review, published in May 2017 and recommended wide spread changes to the way that the “gig economy” should operate.
For some, it doesn’t go far enough or barely scratch the surface of the problems. UNISON branded it useless with general secretary Dave Prentis quoted as saying “The government’s good work plan looks set to fall at the first hurdle. It’s no good, it won’t work, and it isn’t a plan.”
But regardless of whether it will do what it is required, it has sparked further debate with consultations announced on other areas including Employment status, Increasing transparency in the labour market, agency workers and employment rights enforcement.
So as the discussion continues, and the changes slowly come into force, let’s look at how it’ll affect certain sectors;
The Good Work Plan is going to affect zero-hour workers in several ways. With nearly a million currently working this way, the plan is asking the Low Pay Commission to consider the impact of higher minimum wage rates for workers on zero-hours contracts.
The plan introduces a right for all workers with variable hours to request a more predictable and stable contract. Other changes include extending the reference period for holiday pay from 12 to 52 weeks, meaning people who work irregular hours have their holiday pay calculated over their average earning for 52 weeks rather than 12, meaning more even representation of their working hour, The Good Work Plan also recommends gathering evidence of the level of abuse of the “Swedish Derogation”, also known as “pay between assignments” in the Agency Workers Regulations 2010 (with a view to strengthening enforcement or repealing it) thereby leaving “Match perm Pay” which has established itself as the preferred route with contractors and agencies alike.
Although designed to help ensure rights for agency workers, the Swedish derogation model has been manipulated for some considerable time with many umbrella companies simply “cutting the cake” differently by assigning an apportion of the invoice value to represent advanced pay of “pay between assignments”, meaning the contractors don’t get anything more should they qualify and where the assignment comes to an end.
So where does this leave recruitment agencies?
It may well be business as usual for a little while; although a keener approach to ensuring workers have the plans set in place from day one will be required. But there is no doubt that there will be many more changes in the future as the government and industry tackle the gig economy and how to regulate it. Of course, for recruiters, that will mean adapting and we’ll help you wherever we can Call 01260 280290