The Conduct of Employment Agencies & Employment Businesses Regulations (2003), also known as Conduct Regs, establishes a set of minimum standards that recruitment agencies must adhere to to ensure fair treatment of both end clients and candidates. These regulations apply regardless of the employment model you operate under, whether it be Umbrella, CIS Self Employed, or Limited Company. Before introducing you to the end client, the agency must have a signed Opt-Out form, indicating that the regulations will apply.

The regulations cover several key areas, including the exchange of information between the contractor and the client, the necessary contractual documents, the timing of contractor payments (especially in cases where payment has not been received from the end client), and the circumstances under which a fee can be charged to the client for a transfer. If you would like to review the full text of the original Regulations, including any amendments made in 2007, 2010, and 2016, you can find them here.

An ‘Opt-Out’ provision is available for those who work through a Limited Company (including an Umbrella Company) or do not work with vulnerable individuals. When you register with an agency or apply for a new role, you will be given the option to Opt Out of the regulations. It is important to note that choosing to opt out is entirely up to you.

What are the advantages of choosing to opt in?

1. The agency is obligated to pay you for the work you have completed, even if they haven’t received payment from the end client yet. This ensures that you will be compensated for your efforts.

2. You will not be charged for any work-finding services by the agency. This means that you won’t have to bear any additional costs for securing employment.

3. The agency cannot withhold payment from you under certain circumstances or for an unreasonable amount of time. This ensures that you will receive timely and fair compensation for your work.

4. You will be provided with clear terms outlining important aspects of your assignment, such as the length of the contract and the rate of pay. This ensures transparency and clarity in your working arrangement.

5. Upon completion of the contract, the agency will not restrict you from working directly for the end client. This allows you to explore further opportunities and potentially establish a direct working relationship with the client.

What are the implications if I choose to opt out?

1. Contractors who opt out of the Regulations may face certain disadvantages. For instance, a recruitment agency is not obligated to pay workers who have opted out, even if they haven’t been paid by the end client. This means that you may lose the protection of guaranteed payment.

2. If you opt out, the recruitment agency can impose restrictive covenants that prevent you from working for a client’s competitor or using a competing agency. This limits your options and flexibility in terms of future employment opportunities.

3. There are additional considerations regarding temporary-to-permanent fees. If you opt out and the client wishes to hire you directly, they may face financial implications or obstacles in doing so.

4. The agency must agree with you, as a contractor or umbrella company, before introducing you to a potential client. This can potentially limit your flexibility as a highly skilled labour resource, as the terms of the agreement may restrict your options.

If you have any further inquiries, please feel free to contact us.