AWR and Swedish model - will I pay more?

[LisaContractorUmbrella]

At Nasa Umbrella, we are not fans of the Swedish Derogation Model. It does not fit will with our ethos for full HMRC compliance and putting the contractor first. The Swedish Derogation will punish agency workers by removing their right to a pay increase after 12 weeks. Under the AW Regulations agency workers are entitled to the same income as comparable workers at the end client, but if temps sign up to the Swedish Derogation Model, they give up this right!

Not only will this mean you potentially paying higher fees, but they will also be holding back some of your income to ‘pay’ you after assignments and be forcing you to give up on higher pay.

That’s why a compliance driven employer like Nasa Umbrella is not ‘offering’ to force their temps to a Swedish Derogation model.

Why would there be a 'right' to a pay increase after 12 weeks?

[NasaConsulting]

At Nasa Umbrella, we are not fans of the Swedish Derogation Model. It does not fit will with our ethos for full HMRC compliance and putting the contractor first. The Swedish Derogation will punish agency workers by removing their right to a pay increase after 12 weeks. Under the AW Regulations agency workers are entitled to the same income as comparable workers at the end client, but if temps sign up to the Swedish Derogation Model, they give up this right!

Not only will this mean you potentially paying higher fees, but they will also be holding back some of your income to ‘pay’ you after assignments and be forcing you to give up on higher pay.

That’s why a compliance driven employer like Nasa Umbrella is not ‘offering’ to force their temps to a Swedish Derogation model.

[Steven@Parasol]

Hi Sarah

We will be adopting the Swedish Derogation Model - in real terms it is a natural progression for compliant umbrella companies; we already pay our employees a monthly salary regardless of whether we have received funds from the agency/client and we make payment between assignments as required to fulfil the requirement for mutuality of obligation under an overarching contract of employment. Although there will be additional administration involved in implementing the AWR & SDM we currently have no plans to increase our fees

Completely agree - I've heard Lisa and our own CEO Rob make the point on numerous occaisions that the 'true correctly structured' umbrella companies are not far off from being compliant AWR solutions as they currently are.

[LisaContractorUmbrella]

Hi Sarah

We will be adopting the Swedish Derogation Model - in real terms it is a natural progression for compliant umbrella companies; we already pay our employees a monthly salary regardless of whether we have received funds from the agency/client and we make payment between assignments as required to fulfil the requirement for mutuality of obligation under an overarching contract of employment. Although there will be additional administration involved in implementing the AWR & SDM we currently have no plans to increase our fees

[Contractor UK]

AWR

Hi Sarah

If you look at the main site we've got a whole section on the Agency Workers Regulations.

These two articles in particular may interest you:

Will the Swedish Derogation model boost my pay?
Umbrellas size up Swedish Derogation model

HTH

[Steven@Parasol]

Hi,
Have been working through my umbrella company for just over a year and all is pretty good. They have recently contacted me about the new AWR that comes in later this year and they say they will operate under the Swedish Derogation model. I have done some research, all seems OK ish, and they say I will get paid even if I am not in a contract which sounds great. But one question - how will they fund this extra cost that they will incur? They have many contractors so surely paying everyone who isnt working will be very expensive? I am worried they will either increase their fees or will they start keeping money back from me and then just release this if I am not in a contract ? Anyone else had anything on this from their umbrella?

Hi there, we will be offering a full employment model based on the swedish derogation as part of our solution to the AWR and there will not be a significant increase to our fee. It might be pence not pounds and this is to cover the additional admin etc.

We have made our decision to go down this route based on a risk analysis of our base. We have almost 9,000 contractors and the majority of them do not have significant gaps in between contracts so we have the financial strength to cover the pay between assignments when necessary.

If you think about the insurance market, we all pay our premiums to cover the cost of the few claims that are made, so the many covering the few. Our AWR solution is along similar lines.

Pay between assignments lasts for up to four weeks so based on this risk analysis we've made a business decision that we can afford to honour this obligation without a significant increase to our fee.

I would have thought that the other 'true' umbrella companies, i.e. those that offer the full contract of employment, will be doing something along the same lines.

[Sarah2010]

Hi,
Have been working through my umbrella company for just over a year and all is pretty good. They have recently contacted me about the new AWR that comes in later this year and they say they will operate under the Swedish Derogation model. I have done some research, all seems OK ish, and they say I will get paid even if I am not in a contract which sounds great. But one question - how will they fund this extra cost that they will incur? They have many contractors so surely paying everyone who isnt working will be very expensive? I am worried they will either increase their fees or will they start keeping money back from me and then just release this if I am not in a contract ? Anyone else had anything on this from their umbrella?