Agency workers are being paid £400m a year less than the permanent staff they work alongside, with the average admin worker out of pocket by nearly £1,000, according to think-tank the Resolution Foundation.
85 per cent of these workers have been in an agency job for more than three months, which entitles them to equal pay under the law in almost all circumstances. Despite this, agency workers are still losing £300m a year due to lack of pay parity with other employees.
The study found that workers in admin lose on average of £990 a year, while those in sales and customer service occupations were down to the tune of £803. The Foundation’s analysis compared the hourly wage of agency workers and employees with the same personal characteristics such as age and ethnicity doing the same type of work. It found that between 2011 and 2017 the average agency worker was paid 23p less an hour than their colleagues.
The Agency Worker Regulations introduced in 2010 gives those with 12 weeks or more of continuous service pay parity with other employees. These regulations allow agency staff to forgo their right to equal pay with direct employees in return for a contract that offers pay between assignments, but such contracts are often abused by employers, the foundation said. Lindsay Judge, senior policy analyst at the Resolution Foundation, said that the Government needed to close these loopholes and enforce equal pay rights for agency workers.
“Agency workers deserve to be paid the same as employees if they’re doing the same job, so the Government should look to close the loophole that allows agency workers to sign away their right to equal pay. With the government-commissioned Taylor Review noting this abuse, we’re hopeful that 2018 will be the year of action on fair pay for agency workers,” Ms Judge said.
The analysis found that the agency pay penalty varies considerably by occupation, with agency-employed managers actually seeing a bonus, which may be in part compensation for missing out on pension contributions. There are also premiums for those working in less predictable sectors such as social care which legally allow agencies to command a higher price to fill last minute gaps in staffing schedules, the charity said.
TUC general secretary Frances O’Grady said: “Two people working next to each other, doing the same job, should get the same pay rates. But too often agency workers are treated like second-class citizens. That’s because there’s a loophole in the law that allows bad bosses to deny agency workers equal pay. It’s time to end this undercutters’ charter and for the Government to scrap this loophole. It’s recent review into modern employment practices called for precisely that.”