Consultation on modernising the agency work regulatory framework

Through its Plan to Make Work Pay, the government aims to modernise employment rights legislation to improve job security and predictability for millions of workers.

Agency work today spans a wide range of sectors, including education, health and social care, administration, and transport and storage, each with differing needs and employment practices.

• The government recognises that a rigid or outdated regulatory structure may not reflect the realities of this diverse and evolving market.

To simplify, modernise, and clarify the Conduct of Employment Agencies and Employment Business Regulations 2003 (the Conduct Regulations) and to examine aspects of the Agency Workers Regulations 2010, the government seeks views on proposals in four areas:

• How to strengthen security in the temporary labour market while preserving flexibility.
  • Although agency work offers adaptable income and staffing solutions, many workers feel insecure, and existing regulations, built for simpler supply chains, no longer provide consistent protection, especially where umbrella companies are involved. 
  • The government wants feedback on how to modernise the framework to close gaps in protection, simplify overly burdensome rules and better reflect today's labour models. 
  • It sets three core security goals:
    • Ensuring workers receive fair and timely pay.
    • Extending protections across all forms of engagement.
    • Giving hirers confidence that supplied workers are suitably qualified.
• How to strengthen transparency in the temporary labour market, particularly around pay, deductions, employment status and key assignment information.
  • Evidence shows many agency and umbrella company workers lack clarity about who employs them, how their pay is calculated and what deductions will be made.
  • Umbrella company workers face especially high levels of confusion regarding payslips, assignment rates, contracts, holiday pay and employment rights. 
  • The government believes clearer information is essential for both workers and businesses and that regulations should target areas where the lack of transparency causes the most harm, while remaining simple to comply with.
  • It sets three objectives to be delivered:
    • Providing workers with clear information.
    • Improving pay transparency.
    • Ensuring requirements are proportionate and not overly burdensome. 
• How to strengthen genuine choice for workers and businesses in the temporary labour market.
  • The government sees choice as essential for dignity at work and fair competition, but evidence shows many workers are given little or no say in how they are engaged, particularly regarding umbrella companies.
  • Most workers who use umbrella companies do so because they have no alternative, and many are not permitted to choose which umbrella company they work through.
  • Two core objectives are proposed:
    • Ensuring workers are not forced to be paid via an umbrella company.
    • Ensuring workers can turn down work without detriment.
• How to modernise the remaining parts of the Conduct Regulations that were not addressed earlier in the consultation.
  • This area focuses particularly on rules covering Schedule 3 occupations, such as actors, musicians, models, artists, and sports professionals, who are regulated differently due to the unique nature of their work and the representation-based model used in these sectors.
  • The government is looking for feedback on how these provisions could be streamlined to better support security, transparency and choice, while reducing unnecessary administrative burdens.
  • Other regulations open for review include definitions, rules on supplying workers during industrial disputes, requirements for agreeing terms with work-seekers, obligations when workers must live away from home, and conditions under which agencies may charge fees. 

The consultation closes on 1 May 2026. Responses can be made by email or in writing.

Useful guides on this topic

Making Work Pay: At a glance
What is the government's plan to 'Make Work Pay'? What measures have been taken? What measures are proposed? 

Agency workers: Employment intermediaries rules (subscribers)
What are the tax rules for employment intermediaries and agencies? Are agency workers subject to PAYE? 

Agency workers: Umbrellas & anti-avoidance PAYE rules
What is an umbrella company? Who is responsible for operating PAYE in labour supply chains? What is the new legislation for umbrella companies? How will this affect existing labour supply chains?

Employment status & detailed checklist
Why is it important to check my employment status? What tests should I use? What is the recent case law?

External link

Consultation: Make Work Pay: Modernising the Agency Work Regulatory Framework

Question 1: Do you agree that the key objectives listed should underpin the regulations: ensuring fair remuneration; ensuring a wide-ranging coverage of protection; providing assurance for business? Please explain your answer.

Question 2: In your view, do the current regulations meet these objectives? How could the current regulations be adapted to better meet these objectives?

Question 3: Do you have views on how the government can ensure that the distinction between the activities of employment agencies and employment businesses is clearly defined? For example, changes to regulation 8, or publishing specific guidance. If yes, please explain your answer.

Question 4: Do you think the government should relax restrictions on how and when employment businesses can charge end hirers? Please explain your answer.

Question 5: Do you agree that the principle that employment businesses cannot withhold, or threaten to withhold, payment for work done should be maintained? Please explain your answer.

Question 6: Do you agree that regulation 12 should place an obligation on umbrella companies to pay workers for all work done, including in situations where they have not received payment from an employment business? Please explain your answer.

Question 7: Is there additional information beyond requirements or authorisations required by law, and requirements or authorisations required by a relevant professional body or regulator, that should be obtained and provided to hirers under these regulations, rather than agreed to through contractual arrangements? Please explain your answer.

Question 8: Where an umbrella company is involved, should the umbrella company be obliged to pass on any information they are aware of, relating to the two areas outlined above, to the relevant employment business (or to the end hirer when there is no employment business in the supply chain)? Please explain your answer.

Question 9: Do you agree that additional obligations and safeguards should remain in place where the work-seeker will be required to work with vulnerable persons? Please explain your answer.

Question 10: Do you have views on how the processes relating to information gathering and sharing should be streamlined in order to facilitate workers taking up positions quickly and to reduce the administrative costs involved? If yes, please explain your answer.

Question 11: In your view, are there any alternatives to these obligations which would give hirers and clients the necessary security and confidence? Please explain your answer.

Question 12: In your view, should the government make changes to the length of the qualifying period (12 weeks) after which agency workers are entitled to equal basic working and employment conditions, including equal pay? Please explain your answer.

Question 13: In your view, should the government consider any other changes to the Agency Workers Regulations 2010 to reduce administrative burdens for businesses? Please explain your answer.

Question 14: Do you have any views on how the regulations listed above operate in practice, and whether there are any changes that the government should consider? If yes, please explain your answer. 

Question 15: Do you have any views, not already captured, on how the regulations discussed in this chapter should be streamlined to reduce administrative burden for businesses? If yes, please explain your answer. 

Question 16: Do you agree that the key objectives listed should underpin the regulations: clarity for workers, pay transparency and proportionality? Please explain your answer. 

Question 17: In your view, do the current regulations meet these objectives? How could the current regulations be adapted to better meet these objectives?

Question 18: Do you agree that those listed above represent the key pieces of information required to ensure transparency for work-seekers regarding how they will be engaged, how they will be paid and what type of work they will be doing? Please explain your answer. 

Question 19: Do you have any views on when or how this information should be provided to work-seekers? If yes, please explain your answer.

Question 20: Do you agree that where an umbrella company is offered to a worker as a means of providing payment, there should be an obligation on the umbrella company to provide a representative breakdown of how much they will charge for their services, and how deductions will be calculated? Please explain your answer. 

Question 21: Do you agree that the government should regulate to restrict the use of ‘kickbacks’ in the umbrella company market? Please explain your answer. 

Question 22: Which of the two options would be, in your view, most effective at restricting the use of ‘kickbacks’ in the umbrella company market? Please explain your answer. 

Question 23: Do you have any views on how the regulations listed above operate in practice, and whether there are any changes that the government should consider? If yes, please explain your answer. 

Question 24: Do you have any views, not already captured, on how the regulations discussed in this chapter should be streamlined to reduce administrative burden for businesses? If yes, please explain your answer. 

Question 25: Do you agree that the key objectives listed should underpin the regulations? Please explain your answer.

Question 26: In your view, do the current regulations meet these objectives? How could the current regulations be adapted to better meet these objectives?

Question 27: Do you agree that the government should regulate to ensure that workers cannot be forced to work through, or be paid via, an umbrella company? Please explain your answer.

Question 28: Do you agree that the government proposal – regulating to restrict employment businesses from making work-finding services conditional upon workers using an umbrella company – is the most effective way of achieving this? Please explain your answer.

Question 29: Do you have any views on when a work-seeker should choose whether they would like to be engaged and paid through an umbrella company? If yes, please explain your answer.

Question 30: Do you agree that the government should amend the exception for individuals working under a contract of service or apprenticeship to ensure those working through an umbrella company are protected against detriment? Please explain your answer.

Question 31: Do you have any views on whether the exception for individuals working under a contract of service or apprenticeship, more generally, remains appropriate? I.e., where the individual is working directly through an employment business. If yes, please explain your answer.

Question 32: Do you agree that the government should regulate to prevent umbrella companies from opting out of the Conduct Regulations on behalf of workers? Please explain your answer.

Question 33: In your view, which of the two options would be most effective at ensuring that the opt-out is not abused by businesses that seek to engage workers? Please explain your answer.

Question 34: Do you think the definition above accurately captures how a personal service company operates? Is there an alternative definition which better defines a personal service company? Please explain your answer. For example, do you think there are any other characteristics of a PSC that the definition should cover?

Question 35: Do you have any views, not already captured, on how the regulations discussed in this chapter should be streamlined to reduce administrative burden for businesses? If yes, please explain your answer.

Question 36: For the purposes of drafting the regulations specific to umbrella companies, the government intends to use the payment limb of the definition of  'employment business' in the Employment Rights Act 2025 (Clause 36, sub-section 3B(b) “paying for, or receiving or forwarding payment for, the services of those persons, in consideration of directly or indirectly receiving a fee from those persons”) as a basis for applying obligations or any other provision specifically to umbrella companies. Do you see any issues with this approach? Please explain your answer.

Question 37: Do you have views on how the regulations listed above should be amended to account for modern working practices and business models, including the use of umbrella companies? If yes, please explain your answer.

Question 38: Do you have any views on how the regulations listed above should be streamlined to reduce administrative burden for businesses? If yes, please explain your answer.