AWR Guidance

[LisaContractorUmbrella]

A Contract of Employment which makes payment between assignments would mean that the employee would not fall within the scope of section 5 of the regulations which relate to equal pay. In theory a Ltd Company contractor whose contract falls inside IR35 could make a claim against an agency/hirer for unequal treatment with regard to conditions and also pay.

[Vallah]

How about if the umbrella is paying contractors in between assignments,

Isn't that what you'll have to do if the temporary worker forgoes the equal pay provision after 12 weeks?

[Steven@Parasol]

On the face of it, it seems fairly straightforward. If you're operating through a personal limited company, as long as you're IR35 compliant, then you don't have to worry about the AWR. If you're not IR35 compliant or you're working through an umbrella, then you most definitely do.

How about if the umbrella is paying contractors in between assignments, contributing to a contractor's pension, helping them find their next assignment etc?

[Vallah]

I think the intention is to exclude workers who are in business on their own account - unfortunately I don't think the powers that be include inside IR35 Ltd co contractors. As you say - I think we will need guidance on the guidance - nothing new there then

On the face of it, it seems fairly straightforward. If you're operating through a personal limited company, as long as you're IR35 compliant, then you don't have to worry about the AWR. If you're not IR35 compliant or you're working through an umbrella, then you most definitely do.

[LisaContractorUmbrella]

But the word from the BIS people talking to PCG on this subject is that the intention is that Ltd Co contractors are not in scope. The qualification in the wording is, IMHO, to do with the same logic as keeping IR35, to deter against false incorporation. Agreed, though, that it needs qualifying properly; there;'s no way I will submit to the constraints of the AWR, nor do I need their "protections".

I think the intention is to exclude workers who are in business on their own account - unfortunately I don't think the powers that be include inside IR35 Ltd co contractors. As you say - I think we will need guidance on the guidance - nothing new there then

[malvolio]

Looking through the draft guidance for the AWR due out in October it would seem that Ltd company contractors will fall under the scope of the regulations:

"Simply putting earnings through a Limited Company would not in itself put individuals beyond the possible scope of the Regulations.....Where the relationship between the individual, the Agency Worker and hirer remains, in essence, a tripartite relationship and a hirer is not a client of customer of such individuals, the are likely to be in scope."

It goes on to state that someone working through their own company would be outside the Regulations if they were outside IR35 but not if they were inside.

Full document here: Agency Worker Directive and Regulations 2010 | Policies | BIS

But the word from the BIS people talking to PCG on this subject is that the intention is that Ltd Co contractors are not in scope. The qualification in the wording is, IMHO, to do with the same logic as keeping IR35, to deter against false incorporation. Agreed, though, that it needs qualifying properly; there;'s no way I will submit to the constraints of the AWR, nor do I need their "protections".

[LisaContractorUmbrella]

Looking through the draft guidance for the AWR due out in October it would seem that Ltd company contractors will fall under the scope of the regulations:

"Simply putting earnings through a Limited Company would not in itself put individuals beyond the possible scope of the Regulations.....Where the relationship between the individual, the Agency Worker and hirer remains, in essence, a tripartite relationship and a hirer is not a client of customer of such individuals, the are likely to be in scope."

It goes on to state that someone working through their own company would be outside the Regulations if they were outside IR35 but not if they were inside.

Full document here: Agency Worker Directive and Regulations 2010 | Policies | BIS