Guide to Key Information Documents for Agency workers

The KIDS are alright, check out this information on Key Information Documents

Dec 7, 2020
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Intended to give level-playing field transparency for pay and assignment details, this new regulation took effect from 6th April 2020 and meant that all agency workers must be given a key information document before agreeing terms with an employment business.

In practice this will mean that the key information document will be one of the first things they receive. The regulation does not apply to agency workers with existing terms with an employment business, but they will be entitled to a key information document when they sign up with a new employment business. Changes to regulations around written statements also come into force on 6 April 2020. From this date, all agency workers classed as employees or workers will be entitled to both a written statement and a key information document. Separate guidance will be available on written statements.

What do Key Information Documents mean for workers?

Key information documents are intended to give agency workers a number of pay related facts, along with some other details about their engagement, prior to agreeing terms with an employment business. This is so they have more information about their pay at an earlier stage, particularly so that they can see how deductions and fees affect their pay through the supply chain.

What do Key Information Documents mean for agencies?

From April 2020 it will be a requirement for agencies to provide the KID to all workers, ideally at the point of registration. Although this is the agencies obligation, help in preparing the KID can be obtained from a third party that you work with e.g. your Umbrella provider and a new KID will have to be produced if any of the facts within them change.

The Employment Agency Standards inspectorate will enforce the new rules.

What will workers see?

Transparency - the facts about how they are engaged and more importantly what deductions are involved in the process from gross to take-home pay.

The document must be concise, ideally no more than two pages and should include the following headings:

  • Worker name
  • Contract engagement type
  • Party responsible for paying the wages
  • Payment frequency
  • Statutory deductions
  • Non-Statutory deductions
  • Fees for services
  • Additional Benefits
  • Holiday entitlement

Need help or advice?

If you are a current client needing reassurance on your process or a new contact just wanting to seek another opinion, please contact us at: compliance@orbitalservices.co.uk

Resources:

Here are a few more details about the process:

  • As key information documents must be given to agency workers before agreeing terms, the figures given within them do not have to fully reflect the precise figure that workers will make on an assignment-by-assignment basis. They must, though, clearly reflect the minimum amount an employment business expects to achieve for an agency worker (for example, not less than national minimum wage). They must also include a description of all deductions to be made to a worker’s pay. For statutory deductions (e.g. income tax), this can just be an explanation that the deduction will be made. For non-statutory deduction and fees (e.g. an umbrella company’s margin), the key information document must EITHER state the amounts to be deducted OR explain how they are calculated.
  • Key facts pages must also include representative example statements to demonstrate how the listed deductions will be made to a rate of pay. Real numbers must be used in the example statement: actual figures must be given as opposed to simply listing the types of deductions made and their method of calculation, as is acceptable in the rest of the key information document. These figures may be estimated and do not need to exactly reflect the specific rate of pay subsequently received by the agency worker, but they should demonstrate in a realistic way the deductions made to a proposed rate of pay and how these affect a worker’s take home pay.
  • Where employment businesses have multiple ways of paying an agency worker (e.g. subject to PAYE or through different umbrella companies) it is expected that the business will have a standard key facts page corresponding to each payment method. It may be helpful to show each new worker the different key facts pages corresponding to those payment methods, so they can understand the different deductions they lead to and help them choose which method to use. However, this is not required by the regulation. Ultimately, an individual worker must at least receive a key information document that reflects the payment method that they are to be contracted under.
  • Because the figures in a key information document do not need to be precise final figures, they do not necessarily need to be revised for every assignment. They only need to be updated as and when the information contained within them changes. This might for example be when a new deduction is made, such as student loan repayments or contributions to a private healthcare scheme, or when a worker’s right to equal treatment under the Agency Workers Regulations 2010 takes effect.

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