This article has been provided by Stewart Roberts, Commercial Director at Total Back Office Solutions Limited.
Due to changes in employment laws and legislations over the past 15 years there has been an increase in the amount of paperwork and compliance checks in order to make a placement. Most medium to large recruitment agencies have a full department and procedure to ensure that they remain compliant but smaller agencies should also ensure they are checking their own placements. Following a recent Audit and Compliance Conference we would like to pass on some of the basic checks you should consider when making a placement:-
1. Verify the candidates details are correct – You need to ensure the candidate you are putting forward is who they say they are using their CV, ID (passport/driver’s licence), references from previous employers, DBS checks and even meeting them face to face. In some cases you may also need to verify their qualifications or look into their right to work in the country.
2. Ensure you have all documentation for the client – Checking with the client as to what information they may require is important and shows the client you are making every effort to remain compliant. Also certain industries need high levels of compliance such as the medical industry in order to protect the client, the public and the agency from legal action.
3. Ensure the placement complies with AWR – Ensuring the candidate is being paid more or the same as a permanent member of staff (including benefits) is the main question to ask but this can only be done by liaising with the client. Keeping records of your liaisons is important to protect yourself and the client from any future action. Also, working with Umbrella companies who have a policy regarding AWR is advisable to ensure the candidates are paid correctly.
4. Verify the Umbrella Company is compliant – By having a list of approved Umbrella Companies or investigating the companies your candidates want to use is a good way to ensure that they are compliant and that there are no repercussions back on the agency. Questioning the Umbrella Company on their compliance, processes and payment structure is a good start but it is advisable to get some evidence and ensure the company has a qualified, registered accountant behind the scenes. It is also advisable for you to get copies of the Certificate of Incorporation, the VAT Certificate and Insurance Certificates on file.
5. For International Placements ensure you investigate the country rules – When making placements overseas ensure you investigate and are aware of the rules of that country. Each country has different policies regarding candidates working in them including withholding taxes, visas, tax and social security, expenses, currency exchanges and how to pay candidates. You don’t want to make a placement in a country who will deduct 15% withholding tax so you end up with little or no profits (although most can be removed or reduced by investigating if they have a double taxation agreement)
6. Beware of job and candidate fraud – There are more and more examples emerging of outside parties looking to defraud candidates and agencies in the recruitment industry. By completing your full compliance checks you should be able to identify any fraud but these are still occurring (check the TBOS website for a contract fraud that occurred with one of our agencies last year) and check out SAFER Jobs who are working with the industry to raise awareness.
7. Ensuring all contracts are agreed and signed – When completing a placement ensure that you get all parties to agree and sign the contract before the candidate starts on site. This will warrant a swift payment and guarantee that all parties agree to work together. You may want to look into e-signatures to speed up the process or have contracts with trigger actions i.e. if the candidate goes on site then the contract is deemed to have been agreed.
Legislation changes are happening all the time with the imminent arrival of the Offshore/Onshore Interim Legislation and the changes to the Conduct of Employment Agencies and Employment Business Regulations but by ensuring that these checks are followed this should reduce the risk to your agency, your candidates and your clients
TBOS works with its agencies to educate and ensure they remain compliant when making placements in the UK and internationally and provide advice on legislation changes as they happen.
