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Is there a simple AWR solution for agencies

Paystream News

Julian Ball

Wednesday 15th Jun, 2011

AWR is obviously a hot topic in our industry at the moment so we wanted to share our thoughts with you, on the options agencies have, when it comes to the implementation of these new regulations.

Most agencies have now undergone an internal assessment of their risk under AWR and have either:

  • Concluded that AWR will be not a problem since their workers are generally better paid than comparable employees. These workers will often work through PSCs and be outside the scope of AWR because they are "in business"; or
  • Identified that there is a discrepancy between their workers' pay and comparators on site. These agencies are hoping that there may be a workable model to take workers outside the scope of AWR because to get increased rates from clients will not be easy.

One model that is being promoted is the "Swedish Derogation" model. This works such that workers with contracts that guarantee that they will be paid even when the agency cannot find them work are outside AWR. The Government believed that this would apply only to a small number of people already on such contracts and therefore included the derogation in AWR. Some agencies have however identified that this could be used to take all agency workers outside scope.

There are different interpretations of how such a contract would work in practice but is safe to say that few, if any, of these will be acceptable to Government. For this reason it would be dangerous for agencies to pursue this as their sole solution to AWR. Comparator data should be obtained from clients and the risks assessed. Where there is an identified risk and an uplifted rate cannot be agreed with the client a Swedish Derogation model may be appropriate if properly operated.

At PayStream, we have the knowledge and expertise to guide you through the introduction of AWR which will help you avoid any unexpected surprises.

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