Written by FCSA Business Partners, My Digital Accounts
In March 2019 legislation was introduced that requires employment businesses to provide job seekers with a Key Information Document (KID). Crucially the KID must be given to the worker before the business reaches an agreement on terms with that job seeker and before a contract is issued.
The change in legislation follows the Governments Good Work Plan, published in December 2018, of which one of the key aims was to provide better clarity for both employers and workers when it comes to their engagement.
Overview of the changes
The legislation comes into force in April 2020 and, amongst other requirements, must include;
- How the work-seeker will be engaged contractually
- Rate of remuneration and pay frequency
- Costs and statutory and non-statutory deductions
- Fees and margins charged for services/goods received
- Annual leave entitlement
The legislation is compulsory and there is no option for the employment business or the job seeker to ‘opt out’.
More detail on the KID requirements can be found here
As with the majority of the legislation that the government introduces to the UK gig economy it will require the supply chain to work closer together in order to comply.
Contractors will become better informed and agencies and payroll providers will need to work closely together in order to produce KID to ensure they are ready before terms are agreed with the worker.
Necessarily, this will require Agencies and payroll providers to work closer together as the Agency will need to understand the payment model (frequency and type) which will apply to the contractor. In addition, those in the supply chain will need to demonstrate that this has been complied with, meaning that a record needs to be applied to the contractor record in the database (much in the same as IR35 is expected to operate).
Agencies and payroll providers that have processes in place sooner rather than later will be best positioned to benefit from these changes.