The trade union group has lodged a formal complaint with the European Commission against the Government. It's accusing the Government of failing to properly implement the Temporary Agency Workers Directive.
Agency workers who have been with a company for more than 12 weeks should be entitled to the same pay as permanent staff.
However, the TUC said it has gathered evidence from workplaces where agency staff are paid up to £135 a week less than permanent employees.
It claimed the Government's implementation of the Temporary Agency Workers Directive, which came into effect two years ago, was flawed.
It argued technicalities mean an agency is exempt from paying agency workers the same rate of pay, as long as it's directly employs people and guarantees to pay them for at least four weeks if they can't find them work.
According to the TUC there had been a big rise in these types of contracts, with more than one in six agency workers now on them, particularly in low-paid, low-skilled jobs.
TUC, general secretary, Frances O'Grady, said: "The recent agency worker regulations are being undermined by a growing number of employers who are putting staff on contracts that deny them equal pay.
"Most people would be appalled if the person working next to them was paid more for doing the same job, and yet agency workers on these contracts can still be treated unfairly."
According to the ONS, agency working in the UK has increased by 15% since the recession, faster than any other form of employment.
Billy Hayes, the general secretary of the trade union group Communication Workers Union, said: "Some of the lowest-paid workers in the UK are being cheated out of their rights to equal pay by cynical employers intent on keeping their wages low."
He added these "payment between assignment" contracts can often be even worse for workers than the much-criticised zero-hours contracts, which offer no guarantee of regular work.