Worryingly, I’m often asked by people who own recruitment agencies, or less worryingly those looking at starting up their own recruitment agency, “what are the things that I need to do to be compliant?”
You could spend a small fortune on ‘external experts’ (solicitors, trade bodies, consultants, et al) to tell you what’s already in the public domain, and with the power of the internet, its never been easier to DIY a little and save some of that fortune.
A great place to start is the Employment agencies and businesses page on the very useful www.gov.uk , as this gives a really simple start to the understanding process of compliance, with some simple do’s and don’ts such as:
Charge a fee to a work-seeker for work finding services
Stop someone from working elsewhere or terminating their contract with you
Make someone tell them the name of any future employer
Withhold payments or wages due
Supply a temporary worker to replace someone taking part in industrial action
Charge for a uniform without telling the worker in advance
Make unlawful deductions from pay
You must also make sure workers are:
Paid for all the work they do
Not forced to work longer than 48 hours a week
Paid at least the National Minimum Wage
Protected under health and safety laws
Given written terms of employment
Ask the question: “what are the things that I need to do to be compliant” and it will never be a simple answer as compliance is as broad as it is long and can be put into many contexts… Usually there is a lot of worry and concern, a lot of it unnecessary, about the ins and outs of legislation. Much of that worry is fuelled by the myriad of ‘experts’ offering advice and opinion.
In my 19 years working at all levels in the recruitment industry and providing services into e-staffing and recruitment sectors it's never ceased to amaze me how ‘creative’ service providers can be with their products and offerings, and how they skirt around legislation and make a case by having “strong QC Opinion”.
I’m staggered at how many agencies think they are operating compliantly and are “safe from HMRC” when in fact they are not, and it’s only a lack of resources on HMRC's part that keeps so many agencies and contractor intermediaries in business, and in some cases individuals solvent and out of prison.
Many trade bodies purport to have compliance as their very beating heart, but if all their members were compliant, then how come there are so many non-compliant contracting businesses out there…. Someone’s not been totally honest, let’s face it.
In the UK recruitment sector there are various legal and compliance issues that need to be addressed, and ultimately as a director/owner of an recruitment agency, it’s your responsibility to keep up to date and ensure your business is compliant, as it's you who will suffer most should HMRC knock on your door.
In my mind there is much over-legislation, prompted by well-intended and poorly drafted/implemented legislation, usually with a quick consultation that is not broad enough so has unforeseen consequences and a negative knock-on-effect to the recruitment industry.
So, if your still with me then get reading and understand these little gems:
National Minimum Wage Act 1998 (NMW)
Intermediaries Legislation April 2000 (IR35)
Pensions Act 2014 (Auto Enrolment)
Equality Act 2010
Data Protection Act 1998
Agency Workers Regulations 2010, Formerly EAA 1973 (AWR)
The Conduct of Employment Agencies and Employment Business Regulations 1976 (EAR)
Managed Service Companies Regulations 2007 (MSC)
Onshore Employment Intermediaries Legislation 2014 (False Self Employment)
Offshore Employment Intermediaries Legislation 2014
The Gangmasters (Licensing Authority) Regulations 2005
If you want to get deep into the detail with these, then its worth a visit to http://www.legislation.gov.uk and have a browse.
As I said earlier on, there is a lot (maybe too much) out there which probably explains why so many experts make so much money out of us all. All those trade bodies out there talk the talk but do they walk the walk? Remember they are membership organisations first and foremost, so is it in their interests to push all members to be whiter than white, and holier than thou? If you look at the detail on their codes of conduct, compliance audit criteria, charters and ethical codes, then you see that they are all a little nuanced and there is a greyness about so much of what they say and infer.
The issue at the heart of the matter is there is no one single compliance standard, and much of the legislation is unclear and a lot untested, so my advice is:
- Do as much research as you can on independent sites that are black and white
- Seek out information on trade bodies (IoR, REC, APSCo, ALP, ARC) compliance pages
- Do after these first two steps seek out independent advice from a respected and trustworthy ‘specialists’ in Accountancy, Tax and Employment Law