Working for an employment agency comes with many benefits. You get to work in a range of environments and pick up new skills and contacts along the way. And you avoid numerous interviews as there is only one hiring process to onboard agency staff. Job openings are found for you, and temporary employees may even be offered a better hourly rate than permanent employees.

Working for an agency also often means you can choose the number of hours you work in a given week or month. This offers flexibility and freedom that suits many people's lives as they want to build their work around other commitments such as childcare or studying.

Agency workers usually get paid by the hour or on a daily rate. While the agency takes most of the payment from the hirer, they also find all the work for their staff, make pension contributions, and offer paid holidays and Statutory Sick Pay. For this reason, many workers prefer working for agencies rather than finding their own work through freelancing and self-employment.

We are going to look at the pay and benefits for agency work, what you can expect to get, and what you can claim while working for an agency.

Agency workers generally get paid by the hour and should get at least the national minimum wage, which is £9.50 per hour, though it is set to rise in April 2023. Agency workers are able to claim in-work benefits such as Working Tax Credit, though they need to agree upon their average hours worked and wages with the agency to be eligible to make a claim.

If you work for an agency and have an issue with your pay (for example, it might be delayed), you must take this up with the agency and not the client employer. Ultimately, you work for the agency, and they are responsible for ensuring you receive your payment.

So let's jump in and find out who counts as an agency worker.

You are considered an agency worker if ALL of the following apply:

  • you are not self-employed
  • you have a contract with an agency, but your working day is spent with another employer
  • you receive working instructions from the employer and not the agency.

You are not considered an agency worker if ANY of the following apply:

  • You work as an independent contractor or own your own business and are placed by an employment agency
  • You are on the Work Place Experience Programme, Community Employment, TÚS, or any Department of Social Protection vocational training or re-training scheme.

Agency work suits people who cannot or do not always want to work regular hours at the same workplace. Many people choose to work for an agency because they can pick their hours and get consistent work for decent pay, provided they are with a good agency.

Although agency work affords flexibility and choice for workers, there is also the possibility that the agency will be unable to find your work or that you won't want to do the work or work the hours they find you. If this happens, the agency has no obligation to pay you, and you may find yourself out of work for extended periods.

Agency work particularly suits students as they can choose when to work around their studying commitments and get paid a decent hourly rate for the work they do. Agency work can also be good for people with other big commitments, such as childcare.

As an agency worker, you are entitled to many of the same rights as full-time employees. Depending on the type of work you do, the responsibility of your rights is either the agency's or the client company your work for.

Agency workers are entitled to the following rights:

  • paid holiday days. These should total a minimum of 5.6 weeks of holiday per year or the equivalent if you work part-time.
  • minimum wage pay. The minimum wage in the UK for those over 23 is currently £9.50 per hour.
  • Statutory Sick Pay (SSP).
  • no discrimination on basis of age, race, sexuality, or disability
  • the use of the workplace facilities, such as the canteen, car park, or nursery
  • after 12 weeks, paid time off for antenatal appointments if pregnant, and parental leave
  • after 12 weeks, the same basic pay and working conditions as permanent staff working in similar positions.

The amount you earn as an agency worker varies depending on what job you are doing. Many agency workers earn by the hour and can receive relatively high wages.

You should get paid at least the national minimum wage. The national minimum wage is currently the following rates, with rates due to rise in April 2023:

23 and over21 to 2218 to 20Under 18Apprentice
Current rate£9.50£9.18£6.83£4.81£4.81
Rate from April 2023£10.43£10.18£7.49£5.28£5.28

Agency workers are eligible to claim the same in-work benefits as full-time workers, though they must agree to their average hours worked and salary with the agency or the client employer.

In-work agency workers may be eligible to claim:

  • Working Tax Credit
  • Universal Credit
  • Child Tax Credit

You may be able to claim other in-work and housing benefits depending on your:

  • savings
  • income
  • existing benefits and pension
  • rent
  • childcare costs
  • Council Tax rate

Other benefits you may be able to claim while working for an agency include the following:

  • Bereavement Allowance
  • Bereavement Support Payment
  • Budgeting loans and advances
  • Carer’s Allowance
  • Child Benefit
  • Council support schemes
  • Council Tax Reduction
  • Funeral Payment
  • Guardian’s Allowance
  • Housing Benefit
  • Maternity Allowance
  • Maternity Grant
  • Pension Credit
  • Personal Independence Payment (PIP)
  • State Pension
  • Statutory Adoption Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Sick Pay
  • Support for mortgage interest
  • Widowed Parent’s Allowance
  • Winter Fuel Payment

Once you have worked in the same job with the same employer for 12 weeks or more, you are entitled to the same pay and workplace benefits as permanent employees. This is known as 'equal treatment.'

Equal treatment includes:

  • equal pay as a permanent member of staff who does the same job
  • pension enrolment and employer contributions
  • paid annual leave

Your 12-week period starts from your first day on the job. The 12 weeks also do not have to be consecutive, and there can be breaks between the weeks if you have a temporary job elsewhere.

However, the 12-week period is paused if:

  • you take a break of 6 weeks or less
  • you take leave due to sickness or injury for up to 28 weeks
  • you take annual leave that you are entitled to
  • the workplace closes
  • you get called up for jury service for up to 28 weeks

Your 12-week period also does not count if you start in a new role at the same workplace that:

  • requires different skills
  • has a different pay rate
  • is in a different location
  • has different working hours

As with all workers, agency workers pay Income Tax, make National Insurance contributions, and repay student loans relative to their income. The agency makes the payments through the PAYE (Pay As You Earn) scheme and the worker is not required to fill out their own tax returns.

The agency must also provide the worker with payslips after each payment, a P45 form when they leave, and a P60 at the end of the tax year.

Recruiting agencies cannot charge you for finding work unless it is a modelling or entertainment agency. However, they can charge you for other services such as:

  • providing you with a clean uniform
  • writing your CV
  • providing your accommodation
  • offering transport to the workplace
  • additional training programmes
  • getting a DBS check (Disclosure and Barring Service) so you can work with children and vulnerable people
  • providing you with meals

The agency cannot make you pay for any of these services before finding you work, and you are allowed to cancel these services and buy them from other providers if you wish.

Any fees your agency adds for such services cannot result in you earning less than the hourly minimum wage unless they charge for accommodation. Your agency can charge you up to £8.36 per day for accommodation without affecting your minimum wage. They cannot then charge you any more than this if it means you will earn under the minimum wage.

Your agency may withhold your pay if they do not yet have proof of the hours you worked for a client. However, they can only delay your payment for a reasonable amount of time, the exact length of which is not defined.

The agency cannot refuse to pay you if the client's employer is not happy with your work. It is up to the agency to meet the standards it sets, and any issues regarding payment should be between the agency and the hirer.

A good staffing agency will always act on your behalf, but if you have not worked to their standards, they may choose to take you off the books.

If your agency refuses to pay you for work you have done, you can take them to a tribunal.

Recruitment agencies employ temporary workers and hire them out to different workplaces for short-term placements. Agency workers usually get paid an hourly or a daily rate and can often pick the hours or the days they want to work, which appeals to people who want to build their work life around other commitments.

Agency workers must always be paid at least the minimum wage, and they are entitled to the same in-work state benefits as permanent employees. Once you have worked in one position at the same workplace for 12 weeks, you are entitled to the same pay and workplace benefits as permanent staff members.