Anyone who has worked in recruitment for a while knows how important legislation is. Whether you’re working hard to stay compliant, or are supporting temporary agencies like we do, it’s vital that you know what changes are coming up and plan accordingly.
To help with this, today we’re going to talk about some upcoming legislation changes that will affect your agency, your clients, and your temporary workers.
Why Legislation is So Important in Temporary Recruitment
Most legislation is in place to protect the temporary workers that are the lifeblood of any agency. Without this, agencies would be able to provide unfair pay, restrict the rights of workers, and fail to protect them during their work placement. Thankfully, an upcoming legislative change will fix this, giving temporary workers peace of mind.
Airtight legislation is also required to prevent some agencies or their umbrella companies from avoiding their tax obligations. If your agency, or any company you are connected to, is found guilty of this, it will destroy your reputation overnight; something few temporary agencies are able to recover from in such a competitive industry.
Thankfully, all recruitment legislation is made as transparent as possible, and any agency owner should be aware of changes long before they arrive on your doorstep. But it’s still possible to be tripped up, especially if you’re a relatively new agency.
That’s where we come in, providing insight into legislation and helping our clients to plan well in advance.
Statutory Sick Pay (SSP) Legislation Changes
There are two significant changes to SSP that will come into effect on the 6th of April 2026.
The first is the removal of the lower earnings limit. Up until now, SSP wasn’t always a guarantee, and was only available for workers with a certain amount of income.
But from April, all employees will be entitled to SSP. It will be paid at 80% of their normal weekly earnings or an increased flat rate of £123.25, whichever is lowest.
There will also be a removal of the waiting period for SPP. At the moment workers need to wait until day four in order to receive SSP. Instead, it will soon be available from their first full day of sickness absence. This will begin on the 6th as well, so the current rules will apply until then.
Increase to the State Pension Age
Also from the 6th of April, the state pension age will increase from 66 to 67.
This looks like a small change on paper, but will impact temporary recruitment agencies. Your team will need to check that pension continues for workers around this age in order to stay compliant and ensure no future issues.
The change will apply to any individuals born between 06/04/1960 and 05/03/1961.
Director Identity Verification – Companies House
Under the Economic Crime and Corporate Transparency Act, all company directors and Persons with Significant Control (PSCs) are now required to verify their identity with Companies House before they can act, be appointed, or file a confirmation statement.
- The key requirements for this are the following:
- Existing directors must verify their identity with Companies House before they file their next confirmation statement.
- New directors must verify their identity before appointment.
PSCs must verify their identity within 14 days of registration. Those already registered must verify within a timeframe linked to their date of birth.
The goal of this change is to ensure that companies cannot be used for illegal purposes and reduce the risk of fraud.
It may seem like a hassle to some, but it’s beneficial for any business or agency owner.
New HMRC Changes to Protect Contractors
Another piece of legislation designed to benefit business owners comes from the HMRC. Their new ‘Don’t Get Caught Out’ campaign aims to help contractors recognise tax avoidance schemes, particularly those that involve umbrella companies, so they can avoid any financial or legal trouble.
The campaign includes:
- Guidance on how to spot tax avoidance schemes
- Interactive tools for checking payslips and contracts
- Case studies of individuals affected by tax avoidance
- A YouTube video that outlines how umbrella companies work and the associated risks
- Information on how to get support or report any concerns
This campaign aims to do two things: first, educate contractors so they aren’t taken advantage of. And second, send a message to the umbrella companies who might seek to take advantage.
As a temporary recruitment agency, it’s vital that you have the best interests of your workers at heart. If you can provide them with support and information, even if it’s as simple as pointing them towards these HMRC resources, it reflects well on your business.
The HMRC themselves are encouraging agencies to share these resources as much as possible to get the word out there. It might be the thing that convinces someone to try temporary working, which could benefit you in the future if they choose your agency.
More than Just a Service
Although our recruitment funding service will always be our bread and butter, keeping you abreast of legislation changes is just as important to us. Whether you’re a new agency or an established one, knowing about upcoming changes is vital to your success.
Keeping our clients up to date with this information is just one of the many ways we go the extra mile. We do everything we can to immerse ourselves within the wider recruitment industry, so you’ll be surprised how deep our knowledge pool goes.
If you ever have any questions about recruitment or legislative changes, we’re always happy to help.
