Conduct of Employment Agencies regulations were introduced in 2004 to provide a framework for the minimum standards contractors should expect from private recruitment agencies operating in the UK.
The regulations are aimed at workers operating at the lower paid end of the temporary workforce and those that are controlled by the end client. Most professional contractors are businesses in their own right and therefore the regulations do not apply, however many agencies still require their contractors to “opt in” or “opt out”.
Advantages of opting in
Agencies are required to pay a worker even if they have not been paid themselves – Paid holidays (although most agencies will then say that it is a business relationship and therefore paid holidays to do apply) – Workers are not forced to work more than 48 hours per week – Workers are paid at least National Minimum wage – Typically less onerous restrictive covenants and non-compete clauses
Our advice is that opting in to these regulations sends a negative message if HMRC were to ever carry out an IR35 enquiry, as you may be seen to be agreeing that you are subject to control. It is therefore our advice that genuine “in business” professional contractors opt out from these regulations. If you would like to discuss your specific circumstances please contact us.