A new study has revealed that agency workers are being paid £400m per year less compared to the permanent staff that they work alongside, with the average admin worker out of pocket by nearly £1,000,
According to Resolution Foundation, a think-tank, 85 percent of these workers have been in an agency job for over three months, which qualifies them to equal pay under the law in nearly all circumstances.
However, despite this, agency workers are still losing £300m per year because of lack of pay equality with other employees.
The said study discovered that workers in admin lose £990 a year on average, while those that are in customer service and sales occupations were down to £803.
The analysis of the Foundation compared the hourly wage of employees and agency workers with the same personal characteristics such as ethnicity and age doing the same kind of work.
It discovered that between 2011 and 2017, the average agency worker was paid 23 percent less an hour as compared to their colleagues.
The charity stated that the pay penalties exist despite the Agency Worker Regulations that were introduced in 2010 which offers those with 12 weeks or more of continuous service pay equality with other employees.
These regulations enable agency staff to waive their right to equal pay with direct employees in return for a contract that grants pay between assignments. However, the foundation said that such contracts are usually abused by employers.
The senior policy analyst at the Resolution Foundation, Lindsay Judge, stated that the Government must close these loopholes and implement 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,” said Judge.
“Many workers prefer the flexibility that agency work can sometimes offer and are willing to be paid less as a result, but those doing the same job on the same terms as employee colleagues deserve to take home the same day’s pay.”
The analysis discovered that the agency pay penalty considerably differs by occupation, with managers that are agency-employed actually receiving a bonus, which may in part, be a compensation for missing out on pension contributions.
The charity said that there are also premiums for those who are working in less predictable sectors including social care which legally permit agencies to charge a higher price to fill last-minute gaps in staffing schedules.
Frances O’Grady, the TUC general secretary, stated: “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.”