These are the findings of a survey, developed by The Employment Agency Movement (TEAM) in conjunction with the Department for Business Innovation and Skills (BIS), which compared temporary usage during the first quarter of 2012 with the first quarter of 2011 and reflected the views of agencies managing over 20,000 temporary workers across the UK.
It revealed over half (53%) have had to increase their charge rates as a result of the AWR and over a third (36%) have seen a negative impact on margins. Employers also reported an overall net decrease in the use of temporary workers of 16%.
More than a quarter of agencies (28%) had opted to use 'The Swedish Derogation' under which agency workers are engaged on permanent contracts. The derogation guarantees workers minimum levels of payment between agency assignments, although there is still some debate as to whether that means they fall outside the remit of the AWR.
Simon Garbett, chairman of TEAM said: "There is no doubt that agencies have had to invest heavily both in terms of time and money in ensuring that they have the systems necessary to ensure full compliance. There have also been difficulties with engaging end user clients [employers] who have tended to perceive the AWR as a matter for the agency and not for them."
A lack of clarity was also highlighted with respondents frustrated by the fact that the regulations are still open to some interpretation. Many expressed disillusionment at being repeatedly told by their advisors that 'we will need to wait for case law.'
Garbett added: "The problem with this approach is that some believe that they may well end up as the case."