Agency workers are collectively underpaid by £400m a year compared to their full-time counterparts, with the pay gap costing temporary admin staff £990 a year on average, according to new research.
The Resolution Foundation said the loss of pay across all sectors took the average loss for each of the UK’s 800,000 agency workers to £500 a year, up from £430 last year.
The charity said it was shocked to find that around 85% of temporary staff suffered a pay deficit while working in the same job for more than three months. It said agency workers that stayed with one employer for more than three months were expected to have the same pay as full-time employees.
Lindsay Judge, a policy analyst at the foundation, said many employers were using loopholes in the law that allow agency workers to sign away their right to equal pay.
“Agency workers deserve to be paid the same as employees if they’re doing the same job, so the government should look to close the loophole that allows agency workers to sign away their right to equal pay.
“With the government-commissioned Taylor Review noting this abuse, we’re hopeful that 2018 will be the year of action on fair pay for agency workers.”
Last year, labour market economist John Philpott found that more than one in five workers, around 7.1 million people, were in precarious employment, up from 5.3 million in 2006.
A report by the GMB union this summer warned that the number of workers who could be dismissed at short notice was nearer 10 million.
The foundation said some agency workers earned a bonus to compensate in part for the loss of pension contributions, with interim managers and senior social care staff topping the list of those workers who command high wages.
Workers in the category for caring, leisure and other service occupations earn £218 more on average than equivalent full-time members of staff, while temporary managers and directors enjoy a £2,477 pay boost compared to full-timers.
But administrators lost £990 a year compared to full-time employees and the average sales or customer service worker lost £800 a year.
The report said: “These pay penalties exist despite the Agency Worker Regulations 2010 which gives those with 12 weeks-plus of continuous service in the workplace pay parity with comparable employees.”
It said the regulations allow agency staff to forgo their right to equal pay with directly employed staff in return for a contract that offers pay between assignments, known as a “Swedish derogation” contract. It said these were “widely abused, as noted by the government commissioned Taylor Review of Modern Working Practises”.
Frances O’Grady, the TUC general secretary, said: “Two people working next to each other, doing the same job, should get the same pay rates. But too often agency workers are treated like second-class citizens.
“It’s time to end this undercutters’ charter and for the government to scrap this loophole. It’s recent review into modern employment practices called for precisely that.”
