The Swedish Derogation model could be a genuine option for umbrella contractors once the Agency Workers Regulations (AWR) come into force in October, it has been claimed.
According to Parasol, the issue of equal rights for temporary workers – which some believe could cause difficulties for freelancers seeking work – can be circumnavigated by employing contractors permanently through PAYE umbrella companies.
Should they be provided a constant, albeit fluctuating wage through a service provider, genuine freelancers will not be caught by the AWR, advocates of the model believe.
However, Parasol said it is difficult to make any definite plans for the new regime until the government publishes AWR guidance notes.
“All partners in the supply chain for temporary labour need to come together for a detailed impact assessment should the Swedish Derogation model be implemented,” the umbrella company stated.
“Hirers will also need to ensure that the agencies and umbrella companies they are working with have the financial strength to honour the ‘non-assignment’ payment obligation.”
A direct consequence of the EU Agency Workers Directive, the AWR will ensure that all temps qualify for equal pay and benefits once they have completed 12 weeks on any single placement.