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Agency work explained: pay, holiday, umbrella companies and your rights

8 minute read · Updated 2026-09-01

A large share of driving, warehouse, care and construction work in the UK is agency work, and most people doing it were never told how the money and the rights actually work. Here it is, plainly.

Who employs you

There are two arrangements and they are different in law.

  • An employment agency finds you a permanent job with an employer. The employer pays you. The agency is paid a fee by the employer, never by you.
  • An employment business supplies you to work temporarily for a client. You are paid by the agency, not the client, even though you take your day to day instructions from the client.

Neither can lawfully charge you a fee for finding you work. That is the Conduct of Employment Agencies and Employment Businesses Regulations 2003. If somebody wants money from you to get you a shift, walk away and report it.

What you are entitled to from day one

  • The national minimum wage or living wage for your age.
  • Paid holiday, which accrues from the first hour. Usually 5.6 weeks pro rata, often shown as 12.07 per cent of hours worked.
  • A written statement before you start: the rate, who pays you, the notice, and whether you are a worker or self employed.
  • The same health and safety protection as the client's own staff, including the right to say no to unsafe work.
  • Protection from discrimination under the Equality Act 2010.
  • Access to the client's facilities: canteen, transport, parking, and their internal vacancy list.

The twelve week rule, which is worth real money

Under the Agency Workers Regulations 2010, after 12 calendar weeks in the same role with the same client you become entitled to the same basic conditions as if the client had hired you directly: the same pay rate, the same overtime and bonus arrangements, the same holiday entitlement, and the same rest breaks.

Points people miss. The 12 weeks are calendar weeks in which you worked at least one hour, so part time weeks count. A break of six weeks or less between assignments does not reset the clock, and neither does sickness, jury service or maternity leave in most cases. If an agency moves you to a different role to reset the count, that can be an unlawful attempt to avoid the regulations.

After 12 weeks you should also get paid time off for antenatal appointments if you are pregnant. Ask. Agencies do not always volunteer it.

Umbrella companies

If an agency says you must be paid through an umbrella company, understand what it is: a third party that employs you, receives an assignment rate from the agency, deducts costs from it, and pays you what is left.

What comes out of the assignment rate before you see your pay: employer National Insurance, the apprenticeship levy, holiday pay held back, the umbrella's own margin, and then normal tax and employee NI. This is why an "£18 an hour umbrella rate" is not £18 an hour in your hand. Ask for a key information document, which the agency must give you by law, and it must show an example of your pay after all of it.

Warning signs worth walking away from: an umbrella promising to increase your take home pay to 80 or 90 per cent, anything described as a loan, an advance, a grant or a trust, or a scheme that splits your pay into a small taxable salary plus something else. These are disguised remuneration schemes. HMRC pursues the worker, not the promoter, and people have been left with five figure bills years later. HMRC publishes a list of named avoidance schemes: check it.

Holiday pay: the thing to watch

Some agencies "roll up" holiday pay into your hourly rate. That is now lawful for irregular hours and part year workers in leave years beginning on or after 1 April 2024, but it must be shown separately on your payslip. If your holiday pay is being held instead, you must be able to claim it, and any accrued holiday must be paid when the assignment ends. Check your payslip every week, and keep them.

Is agency work worth it?

Sometimes clearly yes: flexibility, a way into a client that hires its good temps, higher hourly rates in shortage trades, and work while you look for something permanent. The costs are the uncertainty, and pension and sick pay that rarely match a permanent job. If you are using it as a route in, say so to the client, work like somebody who wants the permanent job, and keep the 12 week date in your head.

If something is wrong

Raise it with the agency in writing first. If that fails, the Fair Work Agency now enforces agency standards, having taken over the work of the Employment Agency Standards Inspectorate in April 2026. Acas advises free on 0300 123 1100. For unpaid wages there is a tribunal claim, and Acas early conciliation comes first. Keep your payslips, your rota and your messages: those three win most of these cases.

We are an employment agency ourselves, so it is fair to say where we stand: we charge candidates nothing, ever, and adverts here that ask a jobseeker for money come down the same day. What we do with your CV.