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Agency workers face an average pay penalty of £400 a year compared to direct employees with identical qualifications doing identical jobs, according to a new report by the Resolution Foundation think tank.
The report, Secret Agents, found Britain employs around 950,000 agency workers – more than the number of people on zero-hours contracts and that despite the fact many workers enjoy the flexibility that agency work brings and are positive about the agencies that employ them, there is widespread experience of poor and sometimes unlawful practice.
The report finds agency workers are often unclear about their entitlements and rights. It says an analysis of the Labour Force Survey shows that agency workers are four times more likely to think they have no paid holiday entitlement than non-agency workers, and almost twice as likely not to know whether they have a right to holiday pay at all.
The Foundation estimates that in 2017, agency workers collectively missed out on as much as £500 million of unpaid holiday pay. It says the government could boost awareness of rights by requiring agencies to provide a written, standardised statement outlining workers’ entitlements on the first day of work.
It says agency workers’ power – which influences their ability to demand rights and respect in the workplace – depends on the local labour market with those that work in more buoyant local economies being able to up and leave assignments or agencies that offer fewer benefits or treat them poorly.
Previous research by the Resolution Foundation found agency workers are disproportionately likely to be young, low skilled, from an ethnic minority or foreign born; that they work across all industries and occupations (especially manufacturing, transport, warehousing and communications); and that they are found across the pay distribution, although they are more likely to face lower pay than employees.
The report recommends the repeal of the pay-between-assignment (PBA) contract which allows employers to pay agency workers less than a directly comparable employee. It says agencies should be required to provide a written, standardised statement outlining workers’ entitlements on their first day of work and calls on the Employment Agencies Standards (EAS) Inspectorate to take a lead role and pilot enforcement task forces comprising the local authority, the police, the Gangmasters and Labour Abuse Authority (GLAA), HMRC and the Health and Safety Executive in key agency worker hotspots.