Key information document: guidance for agency workers paid through umbrella companies
Help for agency workers who are paid through umbrella companies to understand their Key Information Document (KID).
If you are an agency worker using a recruitment agency to find temporary work, the recruitment agency must give you a Key Information Document (KID).
What the Key Information Document (KID) provides
A KID should be the first document you receive from the recruitment agency looking for temporary work for you. This type of recruitment agency is known as an ‘employment business’.
The KID should set out the key information about your relationship with the employment business and any third parties, including:
- who will pay you
- what you can expect to be paid and how often
Employment businesses must, by law (since 6 April 2020), provide a KID to new temporary workers who register with them.
Why you need a KID
The KID will help you understand the details of your intended arrangements with the employment business, and any umbrella companies (sometimes referred to as intermediaries). It should give you information on:
- your pay
- deductions
- holiday entitlement
- any additional benefits
It should be no more than 2 sides of A4 when printed and should present the information clearly.
How the KID fits in
The KID is one of several documents you may receive, containing overlapping information. These are the documents and how they fit together:
- KID: the KID describes what your method of engagement may look like. It sets out a minimum rate of pay that the employment business expects to achieve for you. The KID should enable you to make an informed decision before you commit to a contractual agreement. You may be offered more than one KID that shows the key information about the different methods of engagement available. For example, an employment business may give you a KID for each umbrella company they work with. However, they must give you a KID that shows your chosen umbrella company before you agree to terms with them
- Terms: the terms of your engagement with the employment business or the umbrella company as set out in a (legally binding) contractual agreement, and which will apply across different assignments with hirers
-
Assignment details: you should also receive written details of the assignment each time you are offered a position. This should cover:
- what you will be doing
- when you will be working
- health and safety information
- other details about your work assignment
- confirmation of the actual rate of pay for the assignment if this is not already in your terms
The KID and Terms cover your engagement terms with an employment business, or third party, that continue over multiple assignments. You should receive an updated copy of these documents when there is a significant change to them. This can include when the person or business paying you changes or when a new deduction will apply. The assignment details give you information about a specific work assignment and you should receive these details each time you are offered a new assignment.
What a KID should cover when an umbrella company or intermediary is involved
The KID should give you the key information about your relationship with the employment business and the umbrella company or any intermediary involved in your engagement.
The umbrella company will be paid more than you. This is sometimes called an ‘assignment’ or ‘contract’ rate. From this income it will pay its employment costs and take an amount for its services. Then it will make a payment to you. The KID must set out the key information around pay and deductions for both you and the umbrella company or intermediary involved in your engagement.
The KID should:
- be separate from other documents
- have a clear title ‘Key Information Document’ at the top of the first page
Beneath the title there must be some statements setting out:
- what the KID covers
- where you can find further information (if applicable)
- the contact details for the state regulator of recruitment agencies, the Employment Agency Standards Inspectorate (see Who you should complain to if you have an issue for more information)
If an umbrella company or intermediary is involved in your engagement, the KID must include:
- the name of the intermediary or umbrella company
- who you will be under contract with – this is your employer
- the type of contract you will be engaged under
- who will be responsible for paying you (if not your employer)
- how often the intermediary or umbrella company will be paid, and how often it will pay you
- any business connection between the intermediary or umbrella company, the employment business, and the person responsible for paying you
- the expected or minimum assignment rate the employment business will pay the intermediary or umbrella company
- deductions from the intermediary or umbrella company’s assignment rate required by law
- any other deductions from the intermediary or umbrella company’s assignment rate, including amounts or how they are worked out
- the expected or minimum rate of pay to you
- details of deductions from your pay required by law
- details of any other costs or deductions from your pay, including amounts or how they are worked out
- details of any fees for any goods or services that the employment business or any other person would charge you for
- holiday entitlement and pay
- additional benefits
- the agreement between you and the umbrella company, if one exists, to opt out of the Conduct of Employment Agencies and Employment Businesses Regulations 2003. See the guidance on the Conduct Regulations for recruitment agencies for more information
The KID must have a representative example pay statement at the bottom that shows how deductions might affect your take-home pay. The figures used in it are only an example and may not reflect the actual pay you receive, but they must be reasonable estimates.
The example pay statement on your KID when you work through an umbrella company might look like this:
Example pay statement
| Intermediary or umbrella income and deductions | Worker income and deductions | |
|---|---|---|
| Example gross rate of pay to intermediary or umbrella company from us: | £750 per week | |
| Deductions from intermediary or umbrella income required by law: | Employer’s National Insurance: £65.61 Employer pension contribution: £15.76 Apprenticeship Levy £3.23 Holiday Pay: £69.51 (retained) |
|
| Any other deductions or costs taken from intermediary or umbrella income: | Umbrella margin: £20 weekly | |
| Example rate of pay to you: | £575.89 gross per week | |
| Deductions from your pay required by law: | Income Tax: £75.48 Employee NI £55.37 |
|
| Any other deductions or costs taken from your pay: | Employee pension contribution: £26.27 | |
| Any fees for goods or services: | Not applicable | |
| Example net take home pay: | £418.77 per week |
This table shows (moving from top to bottom):
- a £750 assignment rate, paid to the umbrella company by the employment business
- the umbrella company’s employment costs (Employer Pension, Employer National Insurance (NI), Apprenticeship Levy, and the umbrella company will set aside a sum of money to pay you for holiday you build up when you take it), which are deducted from the £750
- a £20 ‘margin’, for the umbrella company’s services. This is also deducted
- the remaining £575.89, which is your gross pay
- deductions for your tax, NI and pension, leaving your net pay of £418.77
Remember, the figures used in the KID are estimated and may not represent the true figures you will go on to earn in an assignment, but they must be a reasonable estimate.
What happens if something significant changes on the KID
If there is a significant change to the information on the KID, for example the person or business responsible for paying you changes or you start paying a new deduction, then the employment business must give you a revised KID showing the new details. You should get this within 5 business days of the information changing, and it should state when the changes took effect from. Note that the pay information in the KID is an example only, so a new KID will not be required to confirm the actual rate of pay paid by the employment business to you, an umbrella company or intermediary.
Who you should complain to if you have an issue
All KIDs must include the contact details of the Employment Agency Standards (EAS) Inspectorate. This is the state regulator for employment businesses and agencies in Great Britain. You should contact the EAS if you are concerned about your employment business, for example, if it has not given you a KID, or if you think you have not been paid in full. The phone number is 020 7215 4477.
You can also call the Advisory, Conciliation and Arbitration Service (ACAS) helpline on:
Tel: 0300 123 1100
Monday to Friday
8am to 6pm.
The Advisory, Conciliation and Arbitration Service (ACAS) gives employees and employers free, impartial advice on workplace rights, rules and best practice.
You can use an online form to complain if you are concerned about not being paid:
- the National Minimum Wage
- the minimum wage when working in farming or agriculture
- general issues with your agency, or working time limits (48-hour working week)