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“Borderline unlawful?”: FCSA members report of agencies attempting assignment rate cuts over NI

There are repprts of some employment agencies attempting to decrease assignment rates on grounds that national insurance rates have decreased. This practice should be questioned say several experts.
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Contractor and freelancer experts respond to FCSA receiving reports that some employment agencies are looking to reduce assignment rates on grounds that there has been a national insurance rate cut.

The Freelancer & Contractor Services Association (FCSA) posted an alert on LinkedIn that it is receiving reports from its members that some employment agencies are “trying to reduce assignment rates to workers currently engaged via them.”

According to FCSA, the agencies’ “justification” for this is that since the Nation Insurance Contribution rates have dropped, then so should the assignment rate.

“Our view is clear on this: if agencies didn’t increase rates when the original NICs increases took effect, then how can they have the gall to try to decrease it now?” stated the FCSA.


“We didn’t see assignment rates increase when the extra NICs increases happened and we wouldn’t expect to see decreases in assignment rates now. Furthermore, if there’s nothing in the contract with the umbrella or the contractor which enables them to adjust assignment rates at will, then this strikes me as a) borderline unlawful and b) morally reprehensible,” said FCSA.

When The Freelance Informer alerted Julia Kermode of IWORK of FCSA’s post, she said the news was “outrageous”.

She went on to say:

“This is outrageous. This immoral practice will penalise workers and mean they won’t benefit at all from the change in national insurance. These are the same workers who generate the profits that pay recruiters’ wages and bonuses – yet they are deemed unworthy of receiving the difference resulting from the reduction in national insurance. So many temps have no option but to work second jobs because they can’t make ends meet right now. Every penny counts. I’ve come across plenty of dubious practices in my time but this one is inexcusable.”

As well as not increasing the amount workers are paid when NICs rises, you have to ask – what’s happening in light of the extra holiday pay contractors will receive as a consequence of the Harpur Trust judgment? Agencies and end-clients are rather quiet on this.

Fred Dures, founde rof PayePass

Fred Dures, founder of PayePass, was also surprised that this could happen, and told The Freelance Informer:

“If this is actually happening, it will be interesting to understand which part of the supply chain is the driver – the agencies or the end clients. If either, those involved should come out from the shadows and justify the legal basis for reducing the assignment fee.

“As well as not increasing the amount workers are paid when NICs rise, you have to ask – what’s happening in light of the extra holiday pay contractors will receive as a consequence of the Harpur Trust judgment? Agencies and end-clients are rather quiet on this.” 

Crawford Temple, CEO of Professional Passport, an independent assessor of payment intermediary compliance, told the FI that his firm has not received any reports along these lines but said, “we didn’t see an increase in assignment rates when NICs were increased so we would agree that any move by agencies to reduce rates is very unfair on the workers.”

What to do if you are affected by an assignment rate cut?

Kate Shoesmith, the Chief Executive Officer at Recruitment & Employment Confederation said in a LinkedIn post in response to the FCSA’s report of agency requests to lower assignment rates in light of lower national insurance rates as “unconscionable”.

Shoesmith posted on LinkedIn: “Acas can always provide support and guidance to workers with any specific questions but in addition, the REC and TUC produced a comprehensive guide explaining agency workers’ rights – https://www.tuc.org.uk/sites/default/files/2020-04/Agency_Workers_Rights_2019_A4_Factsheet_AW_Digital_Final_0.pdf

She said that if anyone wanted to draw the REC’s attention to a specific instance, they could do so by making a complaint about a REC member following this link:
https://www.rec.uk.com/recruiters/compliance/complaints/making-a-complaint

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