Despite the fact that it’s been a legal requirement since April 2020, many recruitment agencies are still not reliably supplying Key Information Documents (KIDs) to their contractors before they start work. In this article we’ll look at what you need to know about KIDs, why they’re a good idea for recruiters and why it’s so important to comply with the rules.
What do recruiters have to do?
Under the legislation, workers are entitled to receive a KID from their recruitment agency before they commit to a new contract. The document must detail:
The relationship between the agency and the worker
The nature of work and the number of hours along with any remuneration or fees which may impact the worker’s pay
Entitlement to employee benefits such as holiday pay and sick leave
An estimate of the net payment to be issued to the worker after all deductions have been taken into account
Who the employer is and who is paying the worker.
Responsibility for providing a KID rests with the recruitment agency, but you may rely on information provided by a third party – for example you may need the umbrella company to supply an example calculation and details of their margin and deductions.
Isn’t this just more red tape?
On the surface, this may look like yet more red tape for recruiters to negotiate, and when it’s treated as such it’s easy to see why so many are reluctant to invest in compliance. Isn’t this just one more useless piece of paper that the candidate won’t read?
The truth is that this is one recent regulation that might actually have the power to improve things, for those who embrace it and give it the importance it deserves.
Ensuring that your candidates know how they will be paid, what their employment status will be and have a realistic expectation of their take home pay can go a long way to helping your supply chain run smoothly, and reducing the risks that misunderstandings can create. For example, we know of several legal cases that were brought for “unlawful deductions” because the candidate didn’t understand how umbrella pay was calculated and objected to the deduction of employer’s NI.
The risks of non-compliance
This legislation is intended to protect contractors from perceived exploitation derived from misrepresented or misunderstood details about their pay and conditions, and those who fail to comply can easily look like they have something to hide. In a market characterised by competition for candidates, this kind of publicity could be very expensive indeed. And of course, there’s always the direct risk of enforcement, where you could face legal action and penalties for failing to comply with the law.
How your umbrella company can help
You need to issue each worker with KID, no matter how they are engaged, but when there’s an umbrella company involved you should have a bit more support. The umbrella should be familiar with the regulations, be able to supply all the information you need and even help you put the document itself together.
If your KID process is not yet up and running, or you’re not confident that all your candidates are getting an accurate KID at the appropriate moment, Orange Genie will be able to help. Please contact our expert team on 0129 468483 or email email@example.com.