The UK Employment Rights Bill signals a significant shift in how workers are protected and how labour supply chains are regulated. For recruitment agencies, the changes will have practical implications for worker engagement models, umbrella arrangements and ongoing compliance.
While the legislation is still being finalised, the direction is clear. Agencies will be expected to play a more active role in protecting worker rights and managing compliance across their supply chains.
What’s Changing
The Employment Rights Bill aims to strengthen protections for workers, including those engaged through agency and flexible arrangements. This includes clearer expectations around working hours, treatment of agency workers and increased oversight of employment practices.
A key development for the recruitment sector is the intention to formally bring umbrella companies into the regulatory framework. This is designed to improve transparency, close compliance gaps and ensure workers engaged through umbrellas receive appropriate protections.
Alongside this, enforcement is set to increase through the creation of a Fair Work Agency, which will have broader powers to monitor and enforce compliance across labour supply chains.
Why This Matters for Recruitment Agencies
For recruitment agencies, the Bill reinforces a broader trend towards greater accountability. Agencies will need confidence that their engagement models, umbrella partners and payroll processes align with evolving employment rights.
While these changes are intended to raise standards, they may require agencies to review contracts, update internal processes and strengthen how compliance is managed across their workforce.
What Agencies Should Be Thinking About Now
Although full implementation will take time, preparation should start early. Agencies should stay informed as further guidance is released, review current worker engagement structures and ensure umbrella and payroll partners are equipped to meet higher compliance expectations.
Agencies that act proactively will be better placed to adapt smoothly and maintain trust with both clients and workers.
Final Thoughts
The Employment Rights Bill represents one of the most meaningful shifts in UK labour regulation in recent years. For recruitment agencies, success will come from preparation rather than reaction.
At Apositive, we work with recruitment agencies to navigate regulatory change, strengthen compliance and build operational models that support sustainable growth.
If you’d like to talk through what these changes could mean for your business, we’re here to help.
