The Government’s ‘Make Work Pay: Modernising the Agency Work Regulatory Framework’ consultation, is open for responses until 1 May 2026. It sets out proposals across key areas, including transparency, security, and worker choice, with a clear focus on improving worker protections while ensuring the framework remains proportionate and workable for businesses.
As these proposals could have a meaningful impact across the labour supply chain, we’d encourage you to review the consultation and consider submitting a response to ensure your views are represented. Here are some of the key points we’ve highlighted for your attention.
Transparency
Commercial arrangements, such as rebates, are a feature of some supply chains and can form part of standard agency & Umbrella company relationships. This consultation places a strong emphasis on improving transparency and clarity across the supply chain, particularly in how pay, deductions, and commercial arrangements are communicated.
For agencies, this means an increasing focus on ensuring workers have clear, accurate information about how they are engaged and paid, regardless of the underlying commercial structure.
With transparency in mind, not just for workers but across the entire supply chain, there’s also growing focus on how and when funds flow. Where extended credit terms exist, there is increasing scrutiny on how these impact downstream parties, particularly umbrella companies and umbrella employees.
Our view is that clear, predictable, and proportionate payment structures will become increasingly important, especially as regulatory attention grows around payment practices and worker protection. We work with agencies to ensure transparency in financial flows while maintaining operational flexibility.
Our approach is to support agencies in delivering simple, transparent worker journeys which show how financial flows operate, while maintaining operational flexibility and aligning with the direction of travel in the consultation.
Security
One of the most significant areas under consultation is the proposal to extend worker pay protections across extended supply chains, including umbrellas. While the principle that workers should always be paid for work carried out is widely supported, there’s also recognition across the industry that placing disproportionate liability on a single party risks destabilising the supply chain. This is particularly relevant given the recent Joint & Several Liability provisions coming into force.
Our position is that security should be achieved through balanced responsibility across all parties, supported by clear payment flows and robust compliance processes. This helps protect workers without creating unintended financial risk for agencies or intermediaries.
Worker Choice
As the consultation pushes for greater worker choice in engagement models, agencies that don’t currently offer PAYE may come under pressure to introduce it. However, doing so can create significant operational and compliance burdens, particularly for agencies without in-house payroll infrastructure.
There is also a risk that introducing PAYE without the right controls could lead to inconsistent worker experiences or increased administrative complexity. In addition, recent and upcoming increases in employer overheads, such as Statutory Sick Pay changes, alongside the wider economic context, could place further financial strain on agencies if they were required to offer this option.
Although the consultation promotes increased worker choice, particularly around engagement models, it sits alongside other regulatory developments, such as Joint and Several Liability. These are driving agencies to tighten control over their supply chains and reduce risk exposure. This creates a clear tension: agencies are being asked to expand choice while simultaneously being held accountable for the compliance of that choice.
Our view, aligned with broader industry feedback, is that the most practical solution is controlled choice. This means offering workers a selection of vetted, compliant options that balance flexibility with the need for risk management and regulatory compliance. As always, we’re on hand to support agencies in offering compliant, scalable solutions that preserve flexibility while meeting evolving expectations around choice.
Have your say
We appreciate that the consultation raises a number of complex and evolving considerations, and the practical implications will vary across different operating models. We encourage you to have your say by responding to the consultation by 1 May 2026. Both the number of responses and their content matter.
In the meantime, we will continue to monitor developments closely and share further updates as the consultation progresses and greater clarity emerges.
If you’d like to discuss any of the points raised, or how they may impact your business specifically, reach out to your Key Account Manager. We’re always happy to help you explore the options and prepare for what’s ahead.
