From 6th April 2020, agency workers should be given a Key Information Document (KID) before they start a role through an employment business. This short blog will investigate what is a Key Information Document, and how they affect contractors, freelancers and agency workers taking assignments through recruitment agencies.
Background to Key Information Documents
Key Information Documents (KID) were introduced by the government into the Conduct Regulations – Conduct of Employment Agencies and Employment Businesses Regulations 2003 – Regulation 13A. From the 6th April 2020, all workers engaging with employment agencies must be provided with a Key Information Document for their assignment before shaking hands and coming to an official agreement with an employment business (recruitment agency).
Example Key Information Documents
On the official government website, there are examples of KIDs that contractors, freelancers and agency workers should familiarise themselves with. They’re Microsoft Word Documents, and you can download them by clicking on the links below.
- Example Key Information Document for agency workers (PAYE)
- Example Key Information Document for umbrella employees
- Example Key Information Document for personal service company (PSC) contractors
For more information, please visit the government website.
What should a Key Information Document consist of?
The government has introduced KIDs to help provide transparency to agency workers and to provide them with clarity regarding their payroll and expected pay retention. We’ve summarised some of the most pieces of information regarding KIDs below.
Key Information Documents should:
- Provide workers with an accurate indication of their take-home pay.
- Clearly explain and deductions to the worker’s rate of pay – including fees etc.
- As the name suggests, provide critical information about pay, but not complete information regarding the contract.
- Be accurate, but not 100%. There will almost certainly be some minor variations in figures.
- Reassure agency workers that they’re not going to be paid below the National Minimum Wage (NMW).
- Show all deductions made to an agency worker’s pay. For example, suppose an agency worker is going to require the services of an umbrella company. The umbrella company should provide a KID that shows the workers assignment rate and every deduction. These will include tax, National Insurance Contributions, the umbrella company’s margin, Employment Costs (Employers National Insurance Contributions and the Apprenticeship Levy), and any relevant additional deductions (such as pension contributions and student loan repayments). The KID should show an end “gross salary” projection.
- Consider different payroll solutions available to the agency worker – for example, agency PAYE or PAYE umbrella – and compare them.
If you are a contractor, freelancer, or agency worker and engage with employment agencies, you should automatically be issued a KID before you agree to any official employment arrangements. If you’re not – make sure you request one and question why you’ve not been issued with one – because it’s a legal requirement.
Further reading on Key Information Documents
The UK Contracting Support Team has had a browse and found some handy resources about Key Information Documents. Why not check them out if you have a few minutes?