Employment Agencies Act (EAA)
The Employment Agencies Act 1973 (EAA) is in place to protect the best interests of the candidate, as well as the interests of the hirer. These regulations also provide protection for job-seekers and companies using recruiters and stipulate how recruitment businesses should operate.
The main points to be aware of are:
A work-seeker cannot be charged a fee by an agency for work-finding servicing. This is illegal. The only time a candidate could be charged anything is if they’ve taken advantage of other services offered, like CV writing.
They must be provided with a written contract, which includes details including pay, holiday entitlement, hours, notice periods, etc., as well as whether the contract is a contract for services or is a contract of employment.
An agency workers' pay cannot be withheld. Even if there is reason for an employer to believe they shouldn’t pay the worker, this issue is to be dealt with between the agency and the employee.
The recruitment agency is responsible for ensuring the work-seeker is suitable for the role. It is their legal obligation to ensure that they have the skills and qualifications required to carry out the duties.
It must be clear that it is a recruitment agency that’s advertising the vacancy, and that the candidate will not be applying directly to the employer when they send in their CV or application.
Limited Company contractors
Limited Company contractors do have the option to ‘opt out’ of the regulations. The regulations have been developed in order to provide candidates with better legislative protection, but there is potential for issues to arise with regards to IR35 rules.
Every action should be taken to avoid falling within IR35 rules if you are self-employed, so by opting out you are giving yourself more reasons for HMRC to identify that you are legitimately self-employed. This is because, by opting out, you will no longer receive the same protection as a PAYE worker would be.
Be aware – you must opt-out prior to your contract starting. You do this by informing us and signing an EAA opt-out form.
Want to learn more about the pros and cons of opting out of these regulations? Check out the resources below for more information and places where you can seek advice.