How to structure an employment “agency”

[DanTovey]

Hi, Newbie here.

I work in the sports/leisure sector and earlier this year left my full time job to go freelance offering a specific service to operators in my region to fill staffing gaps caused by holidays, sickness or while they are going through the recruitment process after a staff member has left. . It has succeeded beyond my wildest dreams and I could fill my diary three times over.

I am now wondering how to develop my business by assembling a team of similarly skilled self employed people who I can place with operators while they are undergoing staff shortages.

I don’t want to get involved with employing anyone or getting involved in PAYE/NI. Ideally I would just put an operator and a contractor together and then collect a “facilitation fee” from the operator once the work was done. The contractor would invoice the operator and be paid directly from them.

My involvement would be purely putting people together and charging a modest fee (say 10% of the invoice value).

I have already built up a good brand and reputation within my sector and believe I could roll out the concept across a far wider geographical area.

Does all this stack up under employment law? My accountant believes it does but I am after further opinions.

 

[BlueDress1]

How do you do it at the moment?

 

[BlueDress1]

And well done- I personally think ‘niche’ is always best

 

[DanTovey]

How do you do it at the moment?

Currently there is just me. I work a couple of days a week for a client while they are short staffed. I then move on to another client. I have several clients on the go at any one time. I invoice each one weekly and they pay me.

I could just carry on like this indefinitely but I really want to grow the business without incurring any overheads or employment costs.

 

[Mark T Jones]

Hopefully somebody who understands the laws around employment agencies will pop along - @Newchodge may have some thoughts

My understanding is that you can't do this from the sidelines, however you present it you will still be an agency.

Insurance will be a biggie - at this moment, who is covering you?

 

[fisicx]

Whenever I’ve been employed by an agency it has been just that: employment. They paid my wages and collected the money from the company.

The first thing you need is a license. Have a read of this:

Employment agencies and businesses

The rules for employment agencies and businesses: licences, vulnerable people, opting out, job advertisements, transfer fees, trade unions, terms and conditions and contracts, travel and accommodation for work-seekers

www.gov.uk

 

[Newchodge]

I could just carry on like this indefinitely but I really want to grow the business without incurring any overheads or employment costs.

Wouldn't that be nice? I believe what you propose would fall foul of the employment6 agency rules, as mentioned by @fisicx

 

[Frank the Insurance guy]

Key is what is what your contract with the Operator will say?

What does it say about the services provided and your liability/responsibilities?

Who is doing the vetting?

 

[Ziggy2024]

Effectively a referral business so it is possible. My understanding of agency licences is they are only required for certain areas of work, you need to check whether you fall within those areas. REC is an industry body that you may find a useful resource.

My thoughts on it are to do with the actual contractors. You refer them, then you risk losing the client relationship & being undercut. It may be worth considering PAYE, you don't have to operate it yourself but of course will cost you in terms of compliance and potential professional fees. Your insurance and legal costs to cover the contracts (with both clients and contractors) are a must.