Recruitment agencies are under increasing pressure to evidence how temporary workers are engaged, paid and managed. It is no longer enough to know that a supplier, payroll provider or umbrella company "handles it". Agencies need to understand what evidence exists, where it is stored, who checks it and how quickly it can be produced if challenged.
1. Worker identity and right to work
- worker identity;
- right to work check;
- date of check;
- method of check;
- who completed the check;
- any time-limited permission;
- follow-up review dates;
- copies or digital records where appropriate.
2. Worker engagement route
Each worker should have a clear engagement route, PAYE, CIS, IR35-related assessment, or another relevant structure depending on the assignment and facts. Agencies should evidence what route was selected, why, who reviewed it, what information was relied on, whether it has been reviewed again and whether the worker and client understand the arrangement.
3. Contractual documentation
- worker terms;
- agency terms;
- client assignment details;
- rates;
- deductions where relevant;
- notice provisions;
- assignment start and end dates;
- who the worker contacts;
- what role each party plays.
Documents should align with the actual working practice.
4. Assignment information
- end client and work location;
- role, start date, expected duration;
- rate agreed, charge rate, pay basis;
- hours or timesheet basis;
- supervision or control indicators;
- expenses position.
5. Payroll records
- hours or units worked, rate applied;
- gross pay, deductions, employer costs, net pay;
- payslip output and payment date;
- payroll reporting outputs;
- corrections or adjustments.
6. Payslip and deduction transparency
Workers should clearly understand gross pay, tax, National Insurance, pension deductions, employer costs where shown, fees or admin charges where relevant, holiday pay treatment, net pay and who to contact with a query.
A worker should not need a payroll expert to understand the basics of their pay.
7. HMRC and statutory reporting outputs
- payroll submission records;
- tax period summaries;
- deductions and corrections;
- year-end documents;
- CIS records where relevant;
- exception reports;
- payment confirmations where available.
8. Audit trail
A good audit trail shows what happened, when, who did it, what evidence was reviewed, what decision was made, what changed and how issues were resolved. Compliance is rarely judged only by the final result, it is also judged by the process followed.
9. Exception management
- missing documents and failed checks;
- disputed hours and pay corrections;
- worker complaints and client queries;
- status concerns and unusual deductions;
- late submissions and payroll amendments.
A strong approach does not pretend exceptions never happen. It shows how they are controlled.
Final thought
Compliance evidence should not be scattered across inboxes, spreadsheets, supplier portals and memory. Agencies need a clear operating approach that can show how workers are engaged, paid and supported.