Reforming the recruitment sector

The government intends to replace the current legislation with a new regulatory framework which will remove some of the burden from business but continue to protect people who are looking for work. The government’s proposals for the new regulatory framework include:

• Ensuring that employment businesses do not withhold payment from a temporary worker.
• Restricting employment agencies and employment businesses from charging fees to work-seekers, with exemptions as in the current legislation.
• Preventing employment businesses and employment agencies from penalising a temporary work-seeker for terminating or giving notice to terminate a contract.
• Preventing employment businesses from enforcing unreasonable terms on a hirer when a temporary worker takes up permanent employment with that hirer.
• Ensuring that employment agencies and employment businesses keep sufficient records to demonstrate they have complied with the regulations.

The government also intends to change the enforcement strategy in the recruitment sector by moving to a more focussed and targeted enforcement regime. In future, resources will be focussed on helping the most vulnerable workers who need protection, particularly those on the National Minimum Wage (NMW). Resources will be moved from the Employment Agency Standards Inspectorate to HMRC’s NMW team, with a small team continuing to enforce the other regulations that apply to employment agencies and employment businesses.