Agency workers are the flexible bit of a lot of small businesses — maternity cover, a warehouse peak, the six weeks after somebody resigns without notice. For the first eleven weeks the arrangement is exactly what it looks like: you pay the agency a charge rate, the agency pays the worker, and nobody thinks about it again.
Week twelve is where it changes, and most small employers discover it in one of two ways. Either the agency raises its rate and nobody in your business knows why, or the worker asks the person standing next to them what they earn, and then asks you.
What agency workers get from day one
Two things apply from the first shift. They have the same right as your own staff to use shared facilities and amenities — canteen, staff room, car park, toilets, prayer room, workplace childcare. And they have the right to be told about internal vacancies, so they can apply for permanent roles on the same footing as anyone else. A vacancy circulated only on an internal noticeboard your agency staff never see is a straightforward breach of that.
The minimum wage also applies from day one, for every hour genuinely worked, whether or not those hours made it onto a timesheet. From 1 April 2026 that is £12.71 an hour for workers aged 21 and over, £10.85 for 18 to 20 year olds, and £8.00 for under-18s and apprentices.
What changes at twelve weeks
After twelve weeks in the same role with the same hirer, the worker is entitled to the same basic working and employment conditions they would have had if you had recruited them directly. In practice that covers basic pay, overtime rates, shift and unsocial-hours allowances, any payment for hazardous work, holiday entitlement including anything you give above the statutory 5.6 weeks, bonuses that are directly linked to the amount or quality of work done, and rest breaks and working-time arrangements.
It does not cover everything, and the exclusions matter as much as the inclusions. Occupational sick pay, occupational pensions, redundancy pay, notice pay, benefits in kind such as a company car or subsidised gym, and bonuses that reward loyalty or long service rather than performance all sit outside equal treatment.
One route out of this used to exist and no longer does. The so-called Swedish derogation — a contract under which the agency employed the worker and paid them between assignments in exchange for giving up equal pay — was revoked on 6 April 2020. There is no version of that arrangement available now.
The twelve-week clock does not care whether the weeks were consecutive, or whether anybody was counting.
Counting to twelve, which is where it goes wrong
A calendar week counts if the worker does at least one hour of work in it, in the same role with the same hirer. The weeks do not have to run back to back.
A break of six weeks or less pauses the clock — when they come back to the same role, they resume from wherever they had got to. A break of more than six weeks with the same hirer resets it to zero. Some absences are treated more generously: sickness or injury counts for up to 28 weeks, and so do annual leave, workplace shutdowns, jury service and strike action. Absence related to pregnancy, childbirth or maternity continues to count for up to 26 weeks after the birth.
Moving someone to a genuinely different role also resets the clock — but only if the change is substantive, meaning the duties that make up the main part of the job actually change. Renaming the role does not do it. There is also paperwork: you have to tell the agency the work has changed, and the agency has to give the worker a written description of the new role. And structuring assignments deliberately so that nobody ever reaches week twelve is anti-avoidance territory, on which a tribunal can make an additional award on top of compensation.
What it does to the invoice
Put illustrative numbers on it. Suppose your own warehouse pickers are on £13.60 an hour with a £1.10 night-shift allowance, and the agency has been charging out on a £12.71 base rate. From week thirteen the base pay has to match, so the pay rate underneath the invoice goes from £12.71 to £14.70 on nights — a rise of about £2 an hour.
On a 40-hour week that is roughly £80 a week per worker in extra pay, before the agency's margin and employer on-costs are applied on top. Three workers across a twenty-week peak, eight weeks of which fall after qualification, is around £1,920 you did not budget for. That is not a disaster. It is only a problem because it usually arrives as a surprise, in a month you had already planned.
What to do this week
Ask your agency, in writing, where each worker currently sits on the twelve-week clock. Agencies track this; most just never volunteer it.
Then give the agency your comparator information — the pay, allowances and holiday for the equivalent directly-employed role — because you are the only party who has it, and equal-treatment failures usually start with a hirer who never supplied it. Decide before week twelve whether the role is genuinely temporary: once you are paying parity plus an agency margin, hiring directly is often cheaper, and the real cost of a bad hire is a smaller risk than most owners think when the person has already been doing the job for three months. Finally, check the day-one rights are actually working — that vacancies reach agency staff and that facilities are genuinely open to them.
If the underlying question is really about flexible staffing rather than agency staffing, what small employers can and can't do with zero-hours contracts covers the other main route, and running a recruitment process that will not land you at a tribunal covers converting a temp into a permanent hire properly.
Common questions
Who pays for equal treatment after 12 weeks — the agency or the hirer?
The agency pays the worker and carries the primary legal responsibility for getting equal treatment on pay right, but it cannot do that without information only you hold. As the hirer you have to supply the comparator details — what a directly employed person doing that job would be paid, what allowances apply, what holiday they get. In commercial terms the cost lands on you regardless, because the agency passes it through in its charge rate. You are also directly responsible for the day-one rights: access to shared facilities and telling agency workers about internal vacancies are your obligations, not the agency's.
Does moving an agency worker to a different shift or department reset the 12 weeks?
Only if the role is substantively different, meaning the duties making up the whole or main part of the job genuinely change. Moving someone from days to nights, or from one aisle of a warehouse to another, does not reset anything. Where a role genuinely does change, there is a process attached: you must notify the agency that the work has changed, and the agency must give the worker a written description of the new role before the new assignment starts. Rotating people between nominal roles specifically to stop them qualifying is treated as avoidance, and an employment tribunal can make an additional award on top of any compensation.
Do agency workers get company sick pay and our pension after 12 weeks?
No. Occupational sick pay and occupational pension schemes are both expressly excluded from equal treatment, along with redundancy pay, notice pay, benefits in kind and long-service bonuses. What agency workers do get is statutory sick pay through the agency if they meet the qualifying conditions, and automatic enrolment into a pension by the agency as their employer, on the same statutory basis as anyone else. So the worker is not without cover — it simply comes from the agency rather than from your scheme, and your enhanced benefits stay with your own employees.
Can you just end an agency assignment before week 12?
You can end an assignment for genuine business reasons at any point, and there is nothing unlawful about a placement that happens to last ten weeks because the work ran out. What is caught is a pattern: repeatedly ending and restarting assignments, or shuffling people between nominal roles, with the effect of stopping anyone from qualifying. The regulations contain a specific anti-avoidance provision aimed at exactly that, and where a tribunal finds a structure designed to defeat the qualifying period it can order an additional award on top of the compensation for the underlying breach.
