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Agency workers hit by annual £430 pay penalty, says report

December 8, 2016  /   No Comments

Agency workers hit by annual £430 pay penalty, says reportWhile the number of agency workers has grown by 30% since 2011, and now stands at 865,000, they are hit by an average annual pay penalty of £430.

That’s according to a new report published this week by independent think-tank, the Resolution Foundation, as it launches a major 18-month investigation into agency work.

The report – Secret Agents: agency workers in the new world of work – highlights agency staff as the ‘forgotten face’ in the recent debate around insecure work, where the issue has largely been ignored despite there being similar numbers of people doing agency work as are on zero-hour contracts. This lack of visibility came to light recently at the Sports Direct warehouse in Shirebrook, where the treatment of staff on zero-hours contracts was big news and acted upon, while the exploitation of agency staff remains unaddressed.

The Foundation says that the number of agency workers across Britain is expected to hit one million by the end of this parliament, if the growth of recent years continues.

Secret Agents has found that a full-time agency worker earns £430 year less than an identical employee in the same role. Despite the stereotype of agency workers being short term and temporary, half of all agency workers actually say they work on a permanent basis and three-quarters work full time. The Foundation says that this loss of earnings could therefore affect their ability to provide for their family and save for the future.

The TUC has become increasingly frustrated about the growing use of the loophole known as the Swedish derogation. This loophole allows agency workers placed with companies to be paid less than direct employees, provided the agency agrees to continue paying them for at least four weeks at times when it is unable to find them work.

Commenting on the report, the TUC’s General Secretary Frances O’Grady said: “Agency workers don’t deserve to be treated like second-class citizens.  But they are often paid less than their permanent colleagues, even when they do exactly the same job. As well as suffering a pay penalty, agency staff have fewer rights at work and are more vulnerable to exploitation. We need the government to toughen the law to create a level playing field for agency workers. Too many employers are getting away with treating them unfairly.”

When looking across the whole agency workforce, the Foundation’s analysis found that:

  • The most significant sectors for agency work are health and social work (where 18% of all agency workers have jobs), manufacturing (17% and business activities (17%).
  • 28% of agency workers have a degree or equivalent qualification, compared to 33% of the overall workforce.
  • Close to one in five agency workers (18%) are to be found in London.
  • 54% of all agency workers are male, the same gender split as overall employment. However, women account for 85% of the growth in the number of temporary agency workers over the last five years.
  • Six in ten agency workers are UK nationals (compared to over eight in ten in the overall workforce). EU nationals account for 22% of agency workers (compared to 7% overall) and people from the rest of the world account for the remaining 17% (compared to 9% overall).
  • Ethnic minorities are three times more likely to be agency workers than white workers.
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