Umbrella Companies | What is a Key Information Document?

What is a Key Information Document?

Under new employment legislation, recruitment agencies will present contractors and agency workers with a Key Information Document before a contract is signed or agreed. The Key Information Document will give you a realistic take home pay projection and outline the deductions you can expect to see to your pay. The way we see it – anything that’s designed to help contractors understand their take home pay is welcome! What do you think?

Background to the legislation

Firstly, let’s quickly refresh your memory about the legislation. The requirement for a Key Information Document was introduced within Regulation 13A of the ‘Agency Conduct Regulations’, to improve transparency along the supply chain. As of the 6th April 2020, recruitment agencies will have to issue each new agency worker with a Key Information Document for every prospective contract.

What is a Key Information Document?

The Key Information Document was implemented as a way of improving the transparency of information provided to workers, particularly around pay, and an overview of how any deductions or fees will affect your take home pay. They should be accurate and transparent.

The Key Information Document will also detail the business relationship between you, your recruitment agency and end client before you agree to the terms of the contract or sign any legally binding documents.

An employment business can also provide any additional information that contractors or freelancers may find useful, such as reward schemes or period of notice to be worked.

The government has created various templates that umbrella companies, agencies and Personal Service Companies can use to provide the required information. If you would like to take a look to get an idea about what the document looks like and the information it should contain, you can find it here.

We’ve already seen a number of agencies working with their preferred umbrellas to provide Key Information Documents on demand. Some umbrellas have actually found a way to automate the whole process. Key Information Documents are definitely a step in the right direction in regards to transparency – so we like them (providing they’re ethically produced)!

When will you be given a Key Information Document?

As of 6th April 2020, your recruitment agency will issue you with a Key Information Document (or a few) before you accept an engagement. If you are already engaged in a contract and have pre-agreed terms in place, you do not need to be issued with a Key Information Document, unless the information that it contains changes.

You should be told you’ll get a Key Information Document. If you’re not – hassle your recruitment consultant. They should be in the know about the documents, and if they’re not – you should be concerned!

What does the Key Information Document mean for umbrella employees?

The introduction of Key Information Document’s has meant a welcomed increase in transparency from the outset for umbrella employees. Before you agree to a contract, you can understand the deductions that will be made to your pay, as well as what you will realistically go on to earn if you accepted the role.

The introduction of Key Information Document’s has meant contractors and agency workers are easily able to compare their projected take home pay for different umbrella companies, as well as the additional extras that come with the service.

Enforcement of the Key Information Document

You should not accept a contract from your recruitment agency if they have not provided you with at least one Key Information Document. We also highly recommend you conduct your own due diligence for an umbrella company you are considering using for your payroll.

The Employment Agencies Standards inspectorate will enforce the new requirement.

Alongside the new documentation, there are also significant changes regarding the rules around written statements. New agency workers, whether classed as ‘workers’ or employees, will have the statutory entitlement to receive a written statement of employment particulars, in addition to the Key Information Document.

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