With IR35 dominating the headlines, the Good Work Plan has fallen a little under the radar. However, with legislation changes taking place in April 2020 and effecting all agencies and employment businesses in the UK, it’s time to take note.
Recap: what is the Good Work Plan?
The Good Work Plan was released by the government back in December 2018. It includes a range of policy and legislative changes that aim to improve the quality of work in the UK and is described as “one of the biggest shake-ups of employment law in a generation.”
Fundamental changes introduced by the Good Work Plan include the right to a payslip for all workers, itemised payslips for hourly-paid workers and now Key Information Documents for agency workers.
Key information documents
A significant concern highlighted by the Good Work Plan was the lack of transparency surrounding agency worker contracts and pay. In particular, it found that payment terms were commonly buried in lengthy contract terms, resulting in confusion or, even worse, exploitation.
To resolve this issue, the idea of a “key fact page” was introduced – a document that details remuneration clearly and precisely. This idea is now becoming a legal requirement, thanks to a reform to the Conduct of Employment Agencies and Employment Businesses Regulations 2003.
Responsibilities from April 2020
From 6 April 2020, all agencies and employment businesses must issue work-seekers with a Key Information Document. This document must be issued before the terms of a contract or assignment are agreed to and separate from any other documents or contracts. If an intermediary or umbrella company is involved, the document must also be given to that organisation.
Contents of a Key Information Document
The Key Information Document must begin with a summary statement, per the legislation, and include details such as:
- The type of contract and parties involved;
- The person or business responsible for paying the work-seeker;
- The rate of pay or the minimum rate expected to be paid;
- The intervals of pay;
- Any costs or calculations of statutory and non-statutory deductions that will affect the amount paid;
- Any fees for goods or services that may be charged to the work-seeker; and
- The entitlement of any non-monetary benefits and annual leave.
The document must also include representative example statements to demonstrate pay and deductions.
Should any of these details change, a revised document must be issued no later than the fifth business day following.
Format of a Key Information Document
The legislation also prescribes the format that a Key Information Document must take. This includes being clearly labelled, written clearly and succinctly, no longer than two sides of A4 paper and easy to read, using appropriately sized characters.
How to prepare
With the deadline for compliance fast approaching, it’s essential to prepare for the Key Information Document changes now. This includes:
- Reviewing and understanding the changes and how they impact your business.
- Creating a template Key Information Document that complies with the new legislation.
- Implementing a process for updating Key Information Documents with all relevant information and ensuring that this is issued to work-seekers before signing a contract.
- Implementing a process for retaining evidence of compliance for up to 12-months after the work-finding services last occurred, including proof that the information was correct and delivered to the work-seeker.
The government has issued 24-page guidance on compliance, along with examples of Key Information Documents. However, if you’re struggling to make sense of the changes or find time to ensure compliance, we can help.
At Mango Pay, our specialist team can assist with creating a Key Information Document that complies with the changes on 6 April 2020. To find out more, get in touch today.