Agency Workers Rights: A Complete Guide for Hirers and Agency Workers

The Agency Workers Regulations 2010 (AWR) give agency workers a set of Day 1 rights and, after 12 weeks in the same role, entitlement to the same basic working conditions as comparable permanent employees. Both hirers and agencies need to understand these rules — liability can fall on either party, or both.

1. Who is an Agency Worker?

An agency worker is someone who is supplied by a temporary work agency (TWA) to a hirerto work under the hirer's supervision and direction. The triangular relationship — agency, worker, hirer — is the defining feature. The agency worker is employed by (or contracted to) the agency, not the hirer.

Agency workers should be distinguished from:

• Umbrella company employees — a sub-category of agency workers who are employed by an umbrella company that itself contracts with the agency or hirer. AWR still applies, but with additional complexity around pay.
• Genuinely self-employed contractors— operating through their own limited company and not under the hirer's direction and supervision. AWR does not apply (though IR35 may).
• Permanent employees on secondment — not covered by AWR.

The courts look at the substance of the arrangement rather than the label applied by the agency or hirer. A contractor working under close day-to-day hirer supervision for an extended period may well be an agency worker for AWR purposes despite a contract that says otherwise.

2. Day 1 Rights

From the first day of an assignment, agency workers have two rights that do not require any qualifying period:

• Access to collective facilities and amenities: agency workers must be granted the same access as comparable permanent workers to facilities such as canteens, hot drinks machines, childcare facilities (crèches), car parking, bicycle storage, prayer rooms, changing facilities, and rest areas. These must be provided on the same basis — the agency worker cannot be charged more, placed on a different waiting list, or subjected to less favourable terms.
• Information about relevant vacancies: the hirer must inform the agency worker of any relevant vacant positions (typically via a general notice, such as an internal job board or all-staff email) so they have a fair opportunity to apply for permanent employment. The hirer does not need to give agency workers priority over other candidates — merely the same information.

Denying Day 1 rights is enforceable at the Employment Tribunal without any qualifying service. Compensation is determined by the tribunal and must be just and equitable.

3. The 12-Week Qualifying Period

The main AWR entitlements — equal pay and equal basic working conditions — are triggered after the agency worker has worked in the same role for the same hirer for 12 continuous calendar weeks.

The key rules about continuity:

• The role must be the same or broadly similar — a material change to duties, grade, or location can reset the clock
• The hirer must be the same legal entity
• Breaks of 6 weeks or less do not break continuity (they pause the clock)
• Breaks due to pregnancy, childbirth, maternity/paternity leave, jury service, or other reasons listed in the AWR do not break continuity and may be counted towards the 12 weeks
• Annual leave and bank holidays during an assignment do not break the clock

Hirers who deliberately rotate workers, change role titles, or otherwise restructure assignments to prevent the 12-week clock completing are likely to face anti-avoidance challenges. Tribunals look at the substance of the role, not its label.

4. Equal Treatment After 12 Weeks

Once the qualifying period is met, agency workers are entitled to the same basic working and employment conditionsas a comparable permanent employee. A comparable employee is someone doing the same or broadly similar work at the same establishment (or, if none exists there, elsewhere in the hirer's business).

Equal treatment covers:

• Pay — see Section 5 below for detail on what is included
• Working time — the same hours arrangements, rest breaks, and working patterns as comparable permanent staff
• Night work arrangements
• Rest periods and rest breaks
• Annual leave entitlement (not just the statutory minimum, but any enhanced holiday given to comparable permanent employees)
• Pregnant agency workers — specific provisions apply (see Section 8)

5. What "Equal Pay" Means

Pay for AWR purposes includes:

• Basic hourly or salaried rate
• Overtime rates paid for working beyond normal hours
• Shift allowances and unsocial hours premiums
• Performance bonuses directly linked to personal output (e.g. piece-rate bonuses, individual output bonuses)
• Holiday pay uplift that comparable permanent employees receive

The agency is responsible for paying the worker at the correct rate. The hirer must provide the agency with the information needed to calculate the correct pay — including pay scales, bonus structures, and any contractual pay increases. If the hirer provides false or incomplete information, the hirer bears liability for any underpayment.

6. What Is NOT Included

The following are excluded from the equal treatment principle under the AWR:

• Occupational sick pay (though agency workers have statutory sick pay rights through the agency)
• Occupational pension contributions (auto-enrolment obligations apply separately through the agency or umbrella)
• Maternity, paternity, and adoption pay beyond statutory minimums
• Redundancy pay
• Company-wide performance or profit-sharing bonuses not linked to personal output
• Employee benefits such as share schemes, subsidised gym membership, and mortgage assistance

The exclusions reflect the policy choice to guarantee basic equal treatment while allowing differences in the employment relationship to persist.

7. Swedish Derogation — Abolished

The original AWR 2010 contained a controversial opt-out mechanism known as 'Regulation 10' or the 'Swedish derogation'. Under this model, an agency could pay an agency worker below the comparable permanent rate, provided the agency offered the worker a permanent contract with guaranteed pay between assignments at a minimum of 50% of the preceding assignment rate.

The Swedish derogation was abolished on 6 April 2020 by the Agency Workers (Amendment) Regulations 2019, following recommendations in the Taylor Review of Modern Working Practices. Any contract purporting to invoke Regulation 10 after that date is of no effect. Workers employed under Swedish derogation contracts who were paid below the comparable permanent rate during 2020 onwards may have claims for equal pay.

The abolition was part of a wider package of Good Work Plan reforms, alongside rights to a written statement of particulars from day one and the abolition of the 12-week gap for pay reference purposes.

8. Maternity and Pregnancy Rights

Pregnant agency workers have specific rights from Day 1 of an assignment:

• The hirer must carry out a risk assessment and adjust working conditions or hours if the work poses a risk to the pregnant worker or her unborn child
• The agency worker is entitled to time off for ante-natal appointments from the first day of an assignment (this is a Day 1 right, not subject to the 12-week qualifying period)
• She cannot be treated less favourably because of her pregnancy

Statutory maternity pay is payable by the agency if the worker has sufficient qualifying earnings. The hirer is not responsible for SMP but must cooperate with the risk assessment process and provide time off for appointments.

9. Claiming Rights

Agency workers can bring Employment Tribunal claims for breach of the AWR against the agency, the hirer, or both. The time limit is 3 months minus one day from the date of the act or failure complained of (subject to ACAS Early Conciliation).

Compensation is determined by the tribunal on a just and equitable basis. There is no specific cap on AWR claims, but awards typically reflect the financial loss suffered (e.g. the difference between pay received and comparable pay). Tribunals can also award compensation for injury to feelings if the breach also amounts to discrimination.

The burden of proof initially falls on the claimant to establish a prima facie case of less favourable treatment. The burden then shifts to the agency or hirer to show a legitimate reason for the difference in treatment.

10. Umbrella Companies

Umbrella companies are commonly used in construction, IT, and professional services. The worker is employed by the umbrella company, which in turn contracts with the agency or directly with the hirer. AWR applies to the worker but the identity of the 'agency' (for AWR purposes) may be the umbrella company or the recruitment agency depending on who supplies the worker to the hirer.

Key issues with umbrella companies include:

• IR35 (off-payroll working): the umbrella model is often used to engage workers who might otherwise be inside IR35; workers should check their employment status carefully
• Deductions from pay: umbrella companies can make lawful deductions (employer NIC, pension, apprenticeship levy) from the assignment rate before passing pay to the worker. Some deductions are unlawful and HMRC has published guidance on non-compliant umbrella schemes.
• Holiday pay: rolled-up holiday pay is common in umbrella arrangements but is technically unlawful under the WTR (workers must take and be paid for holiday as it is taken, not receive it as a premium throughout the year). HMRC enforcement in this area is increasing.

Workers engaged through umbrella companies should check pay slips carefully, confirm the umbrella is FCSA-accredited, and take advice if deductions seem excessive.

Key facts at a glance