Agency work, and who is actually responsible for your pay

There is a settled way of talking about agency work. It is worth asking how much of it survives contact with the detail.

The structure and why it matters

In a typical arrangement you have a contract with an agency, and the agency has a separate contract with the client where you actually work. You usually have no contract with the client, which is why pay problems must be raised with the agency even though the work happens elsewhere.

Timesheet approval by the client is normally the trigger for the agency to pay, so an unapproved timesheet stalls everything. Understanding that chain explains most agency pay delays, which are frequently approval failures rather than refusals to pay. Knowing who to chase, and in what order, resolves a great deal faster than complaining to whoever is nearest.

Equal treatment provisions

Many systems give agency workers a right to comparable basic conditions after a qualifying period, sometimes from day one for certain terms. The comparison is usually against what the client would have offered had it hired you directly for the same role.

Coverage typically includes pay and working time, and sometimes access to facilities and to internal vacancy information. Qualifying periods, exclusions and the definition of pay for this purpose vary considerably between countries. A labour authority or union is the right place to check whether you qualify and against whom the comparison should be made.

Intermediaries and the deductions they add

Some arrangements insert a further company between the agency and the worker, often described as an umbrella or payroll intermediary. These structures can introduce administrative fees and, in some designs, pass employer-side costs onto the worker's headline rate. The result is that an impressive-looking rate produces net pay well below expectations, and the gap only appears on the first payslip.

Ask for a written illustration of gross to net before accepting an assignment through any intermediary. Compliance rules for such arrangements have tightened in several countries, and some structures marketed as tax-efficient have proved costly for workers.

Rates, margins and what you are quoted

The rate the client pays and the rate you receive are different figures, and the difference is the agency's margin plus employment costs. A quoted rate may be an assignment rate that includes elements later deducted, rather than a gross pay figure.

For most people, ask specifically whether the rate quoted is the gross pay rate and what, if anything, is deducted before gross. Holiday pay is sometimes rolled into a headline rate, which is restricted in some jurisdictions and makes comparison difficult in all of them.

Get the answer in writing before starting, since renegotiating after the first payslip is considerably harder.

When pay goes wrong

Establish first whether the timesheet was submitted and approved, because that resolves the majority of cases immediately. Raise it with the agency in writing, since the agency is normally your employer or the party contractually obliged to pay.

Where the agency claims the client has not paid, that is generally a matter between them and does not remove their obligation to you. Keep copies of assignment details, timesheets and rate confirmations outside the agency's own systems, which you may lose access to. Where wages remain unpaid, most countries have a wage claim route with a time limit, and finding out that limit early matters.

Judging an assignment

Ask about the expected duration, the notice on both sides and what happens if the client ends the assignment early. Ask how holiday pay is calculated and when it is paid, since this is where agency arrangements differ most. Ask whether there is any charge, deduction or fee of any kind, and treat evasiveness as an answer.

Check what happens to continuity of employment between assignments, as this affects length-of-service rights in some systems. Agency work suits some situations well, and the arrangements are much easier to accept when the numbers were explained beforehand.

The takeaway

Get a written gross to net illustration before you start, and keep timesheets and rate confirmations outside the agency system.

The version you keep doing is the version that works.