Rules applying to Employment Agencies

•  All types of employment agency must make it clear in job adverts that they are employment agencies. However watch out because some agencies break this rule.

•  An agency must not charge for finding or trying to find you work (with some exceptions – mainly in entertainment and modeling).

•  If you enter into a contract with an employment agency, it must give you full details in writing of the terms of your employment. This must include: whether you are an employee or are self-employed; the kind of work you might be given to do; and the minimum rates of pay you will receive.

•  If an agency receives any money on your behalf from an employer, it must pay it directly to you within 10 days (less any deductions for tax and national insurance).

•  If your contract is with the employment agency they must pay you, even if they do not receive payment from the employing organization.

•  An agency must not try to stop you from entering the direct employment of the employer.

Things to know about Employment Agencies

•  Most employment agencies work on behalf of the employer and not the employee. They are paid a substantial fee for this (often 20% or more of wages or salary).

•  Agencies’ first loyalty is therefore to the employer. They will try to find the right person for the job, as cheaply as possible, and to keep the employer as their client for the future. Most agencies regard employees as dispensible.

•  You do not owe the agency any loyalty, nor will they usually expect it.

•  The impression you make on the agency is important but not as important as the impression you make on the employer.

•  They can be a good source of work but you may find yourself doing temporary work with long periods not working.

•  Temporary work through an agency can lead to permanent and full-time employment.

Things to have ready before applying to Agencies – General

•  British nationals will need to produce a birth certificate or a current passport.

•  People from overseas will need to produce a passport or other proof of identity. They will also need to prove their right to work.

•  National Insurance Number

•  Contact details of a recent employer to obtain a reference.

•  P45

•  A Schedule D tax reference number if you are to work as self-employed.

•  Bank details.

Requirements for Specific Jobs

You may need to show you have the following:

•  Construction site workers – hard hat and boots, CSCS card and CIS registration if you are to work as self-employed.

•  Hospital staff – injections against certain diseases like hepatitis B (may be given free).

•  Catering staff – Food Safety Certificate and you may require the agency’s medical questionnaire signed by your GP.

•  Waiting staff – likely to need your own black trousers / skirt, white shirt / blouse and black shoes.

Who will I be working for?

If you get work through an employment agency, you will be one of the following:

•  An employee of the organization you are placed with. In this case you will be paid directly by the employer who will deduct your tax and national insurance under the PAYE scheme. The agency will probably have received a one-off introduction fee in this case.

•  An employee of the employment agency. In this case the employer will pay the employment agency on an ongoing basis and the agency will pay you, after deducting tax and national insurance under PAYE.

•  Self-employed. In this case, your ongoing relationship may be with either the agency or with the organization using your services. In the first case the agency will pay you and in the second case the organization using your services will pay you. In both cases you will be paid without tax or national insurance being deducted because you are self-employed.

Special Tax Rules for the Construction Industry – the new CIS

There are special rules about deducting tax if you work as a self-employed sub-contractor in the construction industry – see generally CIS registration. The way this applies if you get construction work through an agency depends on who you are working for (see above):

•  If you are an employee of the organization you are placed with, then that organization will simply deduct your tax and national insurance under the PAYE scheme.

•  If you are an employee of the employment agency, then the CIS scheme will apply because the agency is regarded as a subcontractor. The agency will usually be paid less a 20% deduction under CIS. However the agency must pay you your agreed wage less normal tax and national insurance under PAYE.

•  If you are self-employed, deductions will normally be made under CIS at 20% by either the employer or the employment agency, depending on who you have a contract with.