Crawford Temple, CEO and founder of Professional Passport, says Make Work Pay must focus on a framework that delivers on fairness.
The government’s Make Work Pay consultation on modernising the agency regulatory framework closed on 1st May and it comes at a pivotal moment for the labour supply chain.
Reform is both necessary and overdue. A more transparent, compliant marketplace, where businesses compete on a level playing field rather than artificially inflated pay rates, should be the aim. However, good intentions alone will not deliver good outcomes, and there are fundamental issues within the current approach that must be addressed.
In April, Joint and Several Liability (JSL) legislation came into effect, fundamentally reshaping the dynamics of the labour market. Its impact has been significant, particularly in shifting risk onto agencies and, by default, influencing how they engage with umbrella providers. We are only some weeks into the new legislation so the impact is still unfolding but we are already seeing some clear tensions between the stated aim of preserving worker choice and the realities imposed by JSL.
If agencies are now liable for failures within the supply chain, it is entirely rational for them to restrict the umbrellas they engage with. In practice, this inevitably narrows the options available to workers. Policymakers cannot promote choice on one hand while introducing measures that constrain it on the other and these conflicts must be resolved if the framework is to function effectively.
How umbrellas operate
Understanding how umbrella models operate is also critical to this debate. Much of the commentary around worker pay overlooks the structural realities of employment through an umbrella. Pay is typically divided between a base salary – aligned to National Minimum Wage – and a discretionary element that reflects the remaining contract value after employment costs. This is not a device to obscure earnings; it is a mechanism that enables compliance, manages employer liabilities, and accommodates fluctuating working patterns. Proposals that assume a simple, fixed PAYE rate risk ignoring these complexities. While alternative models exist, such as those that pass cost variability directly to agencies, the market has historically rejected them in favour of fixed costs.
Where the consultation is on firmer ground is in its ambition to improve transparency. Confusion around “the rate” remains one of the most persistent issues in the sector. Workers are often presented with headline figures that do not represent comparable earnings, leading to poor decision making and misplaced distrust, frequently directed at umbrella companies that have little control over how rates are initially framed. A standardised requirement to present a comparable PAYE rate alongside any uplifted figures would go a long way towards levelling the playing field. Crucially, this information must be available at the point a role is advertised, not after a worker has already committed.
Transparency should extend beyond pay. Workers need clear, upfront information about the nature of an assignment, including its tax status and working conditions. These factors directly influence take-home pay and should be integral to any meaningful comparison. Providing this clarity early would reduce confusion and support genuinely informed choice.
Issues with KIDs
The current approach to Key Information Documents (KIDs) illustrates the risks of implementing well-intentioned policy without sufficient clarity. In their present form, KIDs have not delivered the consistency or understanding that was intended. Responsibility for producing accurate, up-to-date information arguably sits most naturally with umbrella providers, who are closest to the evolving details of employment. Alternatively, a prescribed format with standardised assumptions could ensure that all providers present information on a comparable basis. Without such consistency, we will continue to see variations that confuse.
Enforcement is another area where improvement is needed. The existing regulatory framework is not inherently flawed in every respect; in many cases, it is simply under-enforced. The Agency Workers Regulations, for example, generally function where they are actively applied. The issue is visibility. Where enforcement is perceived to be weak, compliance becomes optional for some. Strengthening oversight, potentially through the newly established Fair Work Agency, would reinforce standards without necessarily adding further layers of regulation.
Finally, there is the issue of financial arrangements between agencies and umbrella providers. These practices, often described as “kickbacks,” are difficult to regulate directly without unintended consequences. Driving them underground would only exacerbate the problem. A more effective solution lies in transparency: requiring providers to disclose the average value of any such payments within worker-facing illustrations. Only by making these flows visible can the market properly assess their impact.
The Make Work Pay agenda is an opportunity to reset the agency labour market on a more sustainable footing. But success will depend on coherence as much as intent. Policies must align with one another, reflect the realities of how the market operates, and prioritise transparency and enforcement over complexity. Without that, there is a real risk that reform will add friction rather than clarity – and leave the very workers it seeks to protect no better off. This is the government’s opportunity to get it right.
