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Agency Worker Regulations 2010

The EU Directive of 2008 or AWR 2010 as it is now more commonly known came into force on the 1st of October 2011 and although it has now been in effect for a number of years, some hirers of agency workers have adopted a “head in the sand” approach and are only starting to realise that there is no “get out clause” if they are anywhere in the “contractor chain”.

The above however has not been the case with our umbrella company, i4 Pay Partners, which along with along with our legal advisors have insured that all aspects of our service are compliant with the new legislation.


The main purpose of the Agency Worker Regulations (AWR) is to ensure the appropriate protection of agency workers through the application of the principle of equal treatment and to address unnecessary restrictions and prohibitions on the use of agency work. They will give agency workers the right to the same basic employment and working conditions as if they had been recruited directly by the hirer - if and when they complete a 12 week qualifying period in an assignment.

Minimising the impact of AWR

The AWR is not designed to cover limited company contractors or any individuals who are in business on their own account. The law does however cover those working via an Umbrella Company and are considered to be “In Scope”.

The Umbrella Company and AWR

With ongoing advice from our legal advisors we are in a position where we can work with any agency whether their assignments are Matching Permanent Pay (MPP) or under Regulation 10, the Swedish Derogation Model (SDM). We have always offered a full employment contract and therefore comply with all of the conditions in clauses 10 and 11 of the legislation.

Our Umbrella Service is ideal for contractors that still want a tax efficient and hassle free way to receive their earnings. As stated, Umbrella contractors are generally within the scope of the AWR, however we will work with the individual on an assignment by assignment basis to ensure that the “chain” from End Hirer to Contractor are all working on the same basis.

Should a Contractor be working under SDM some Umbrella Providers however may well discover that implementing a single method of funding inter-assignment pay from the “contractor gross” is disproportionately detrimental to some of their employee’s finances. We however have the systems that will allow the Company to adopt the position where it will look at each employee individually and offer the solution that is best suited to them thus ensuring the legislation is implemented in the best interest of each individual.

Agencies and AWR

In addition to implementing AWR for their own PAYE contractors they are also required to ensure that all necessary information relating to the scope of the legislation flows smoothly from the Hirer through the agency to the umbrella company and the contractor to ensure full compliance.

If such information including exact assignments dates etc. are not made available when requested then should a claim be brought by a contractor, a tribunal could rule that the umbrella company did all it could and judgment could be made against the agency. It is not possible for one party in the chain to indemnify another party against any claim under the legislation.

Agencies will also need to ensure that any contractors working through their own limited companies are in fact in business on their own account to ensure they are “Out of Scope”.

Agencies can also minimise risk where in situations where they cannot confirm MPP they can use an umbrella such as ours where their Swedish Derogation Model will ensure compliance.


AWR has an impact on the industry by adding additional administration procedures on all concerned, however by working closely with our many agency partners the impact can be minimised. We have the resources and a full range of services, PAYE Umbrella as well as Accounting and Tax Services for Freelance Contractors and by working together we can ensure a smooth implementation of the legislation.

Should you require any additional or more specific information with regards to AWR then please do not hesitate to contact us.