As part of the Agency Workers (Amendment) Regulations 2019, the employment regulations made it a legal requirement for agencies or end clients to issue a Key Information Document to agency workers before agreeing to any terms of employment. This requirement aimed to enhance transparency and ensure that agency workers have access to essential information about their assignments or employment contracts before agreeing to the job.
So, what is included in a Key Information Document and why is it so important that businesses are providing this crucial document?
What is a Key Information Document?
A Key Information Document is a short document whereby agency workers find specific details on their assignment, before agreeing to any terms of employment.
These documents allow agencies to sufficiently highlight any fees and deductions made within the supply chain which may impact the workers’ pay, such as intermediary or umbrella fees and worker fees. It also allows contractors the opportunity to highlight any underlying concerns regarding their pay and make informed decisions before entering a new employment contract.
Agencies should provide a Key Information Document to each agency worker at the beginning of every new contract.
Why is it important that a Key Information Document is provided?
It’s important for businesses to provide a Key Information Document to each worker at the beginning of every new contract to:
- Demonstrate compliance with employment law and UK labour market regulations
- Demonstrate compliance of the business towards contractors and others in the supply chain
- Support the government’s aim to improve transparency of information
- Support contractors with transparency for assignments
- Empower workers to make informed decisions about their employment contracts
- Demonstrate your commitment to upholding workers' rights and ensuring fair treatment within the supply chain
Key Information Document benefits
Below are just a few examples of where having a Key Information Document would benefit both agency workers and businesses:
Example 1: clarity on pay structure
An agency worker is considering a new assignment but wants to understand the breakdown of their pay and any deductions that may apply.
Benefit of issuing a Key Information Document for the worker:
- The worker can review the pay structure, including any statutory and non-statutory deductions, ensuring transparency and enabling them to accurately assess their potential earnings.
Benefit of issuing a Key Information Document for a business:
- Ensures transparency in the pay structure
- Reduces misunderstandings and disputes between the worker and business
- Fosters trust between the worker and business
- Enhances the business's reputation as a fair employer
Example 2: understanding leave entitlement
An agency worker is considering a new assignment but wants to know about their entitlement to leave and holiday pay.
Benefit of issuing a Key Information Document for the worker:
- The Key Information Document specifies the leave entitlement and any additional details about holiday pay, enabling the worker to plan their time off and understand their rights.
Benefit of issuing a Key Information Document for a business:
- Providing clear information about leave entitlement, the Key Information Document helps the agency worker feel valued and supported, contributing to employee satisfaction and retention.
- Ensures compliance with legal requirements regarding leave entitlement
What should be included in a Key Information Document?
A Key Information Document should include essential details about an assignment or employment contract. Below shows a breakdown of the information typically included in a Key Information Document and why each piece of information is important:
- Name of worker – This identifies the specific individual to whom the document addresses, ensuring clarity and accuracy between the worker and the business.
- Contract type – the type of contract the employer will be engaged under. For example, temporary, fixed-term or permanent. Contract type must be included to provide clarity on the nature and duration of the employment.
- Rate of pay – You should clearly state the exact rate of pay the worker will receive or the minimum rate of pay you expect to achieve for the worker. This information ensures transparency and helps prevent misunderstandings surrounding pay. For the latest update on the April minimum wage increase visit our blog here.
- Pay intervals – This indicates how often the worker can expect to receive payment and is beneficial in supporting workers with budgeting and planning their finances accordingly.
- Statutory deductions – You should outline any deductions that are legally required to be deducted from the worker’s pay to ensure full compliance with tax and employment law. For example, Income Tax and National Insurance.
- Non-statutory deductions – This should detail any additional deductions that may be made from the worker's pay and include how they’re calculated to help the worker understand the total deductions from their earnings. For example, pension contributions or union fees.
- Any fees for goods or services – It’s important to specify any fees charged to the worker for goods or services related to the employment, such as DBS (Disclosure and Barring Service) checks or uniform costs. This will prevent any surprises and will allow the worker to budget accordingly.
- Any other benefits – You should outline any other benefits that the worker may be entitled to as part of their employment to provide a comprehensive overview of the employment package. For example, healthcare benefits or bonuses.
- Leave entitlement – It’s important to specify the worker's entitlement to paid leave, including details about annual leave, public holidays, and any additional holiday pay arrangements to help the worker understand their rights.
Employment regulations set the legal framework for the provision of essential information to agency workers. Key Information Documents serve as a tool for businesses to meet these regulatory requirements and are important in promoting transparency and empowering agency workers in the employment relationship.
For examples of what a Key Information Document should look like, click here.
Bar2 simplifies compliance by effortlessly creating tailored Key Information Documents for all contractors, saving you time and ensuring smooth on-site placements.