Key Information Document

INTRODUCTION

From 6th April 2020 the Conduct Regulations require that employment businesses provide workers on new assignments with a Key Information Document (KID). Workers already on assignment will not require a KID until their next assignment.

The objective of this is to provide the worker with transparency on their pay, before they agree to terms with employment business. In particular how any fees or deductions affect their pay and what minimum pay they can expect.  Statutory deductions can simply be listed, non-statutory deductions (e.g. umbrella company margin)  must be stated as an amount, or their method of calculation given.

The KID does not need to include detailed contractual information or demonstrate what a worker will earn over the period of an assignment. There is no opt-out from this requirement.

A Key Facts section must be included which contains ‘representative example statements’ to demonstrate how any deductions are made to the rate of pay. Real numbers must be used, typical of the order that the worker would receive, but it’s not necessary to incorporate the specific rate received by the worker.

INTERMEDIARIES

Where an intermediary is employing and paying worker additional information is required. The additional information is not required where worker is engaged as a Personal Service Company, however any deductions made by the agency before payment reached the PSC must be detailed.

Where there is an intermediary, the KID must be provided to them and worker. Although it’s likely that the Employment Business and intermediary will work together to produce the KID.

FORMAT

The KID must be clearly identified with a brief explanation and include contact details of the Employment Agency Standard(EAS) inspectorate. It should be easy to understand and be not more than two pages of A4.

The Employment Business should be able to supply a key facts page suited to each engagement type e.g. Direct PAYE, Umbrella, Personal Service Company (PSC). This does not need to be revised for every assignment unless there is a new engagement type or a change in deductions e.g. when student loan repayments are due, new contributions to private health care, or when equal payment under AWR takes effect.

Information required when worker is engaged by employment business, or by intermediary (umbrella)

  • Name of worker
  • Contract type
  • Identity of the employment business
  • Who will pay the worker
  • Who will employ the worker
  • Rate of pay1
  • Pay intervals2
  • Statutory deductions3
  • Non-statutory deductions4
  • Any fees for goods or services5
  • Any other benefits6
  • Leave entitlement

 Information required only when worker is engaged by intermediary (umbrella)

  • Rate of pay to the intermediary (exact or minimum)
  • Any other difference between intermediary income and workers net pay
  • Any opt-out under Regulation 32 of Conduct Regulations
  • Any business connection between the intermediary and employment business

 Notes:

  1. Rate of pay: exact rate, or the minimum rate of pay that the employment business can expect to achieve for the worker. This is often expressed as at least the prevailing or current National Minimum Wage or National Living Wage.
  2. Pay intervals e.g. weekly, monthly
  3. Statutory deductions e.g. Income Tax, National Insurance, student loan, etc. Exact amounts are not required here and a simple list of statutory deductions would suffice.
  4. Non-statutory deductions e.g. private healthcare. This must include either the amount that will be deducted or a description of the method of calculation.
  5. Rate of pay: exact rate, or the minimum rate of pay that the employment business can expect to achieve for the worker. This is often expressed as at least the prevailing or current National Minimum Wage or National Living Wage.
  6. Pay intervals e.g. weekly, monthly
  7. Statutory deductions e.g. Income Tax, National Insurance, student loan, etc. Exact amounts are not required here and a simple list of statutory deductions would suffice.
  8. Non-statutory deductions e.g. private healthcare. This must include either the amount that will be deducted or a description of the method of calculation.
  9. Any fees for goods or services e.g. cost of a DBS check. This must include either the amount that will be deducted or a description of the method of calculation.
  10. Any other benefits e.g. free gym membership, actual value not required.

Representative Statement