The aim of the Good Work Plan is to improve clarity for workers and employees, whilst significantly changing the enforcement landscape for those who do not comply.
A new section, section 13A was inserted into The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019. The point affecting contractors here is that from 6th April 2020 all Employment Businesses must issue agency workers with a 'Key Information Document' (KID). The KID outlines to a worker how they are engaged and by whom, who will pay them and how frequently these payments are made. Most importantly though, they show a pay illustration which runs through the deductions made by an Umbrella.
In practice your agency should provide you with a KID when you have told them which Umbrella Company you will be using. The KID will use an 'Umbrella Pay Rate' in its example pay calculation. This may not be the exact umbrella rate agreed with the agency, but an expected or illustrative amount, Ultimately, the aim is to show you all of the deductions that you will see on your payslip when you are paid.
The umbrella company should also provide you with an accurate pay illustration during onboarding. This will factor in things like your tax code, earnings levels, student loans or pension contributions so will be much more specific to your circumstances, and therefore more accurate. This will show you exactly how much you will be paid time.
You will find below an example Key Information Document, showing the deductions from a typical income to the umbrella. This is purely for illustrative purposes.
Example Pay Calculation in KID Format
The below shows a sample KID based on the assignment rate of £250 per day.
The below is based on some standard payroll assumptions, a change in which (i.e. student loan, different tax code, different NI category, private pension payments etc) could change the overall take home pay.
