The Government’s Make Work Pay consultation on modernising the agency work regulatory framework was released in February, giving recruitment agencies, workers and industry stakeholders the opportunity to shape the future of the temporary labour market.
The consultation is focused on strengthening protections for agency workers while ensuring businesses can continue to operate efficiently. At the centre of the discussion are three key themes:
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Transparency
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Choice
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Security
These proposals could significantly change how agencies engage and pay their workers. That’s why it’s important for agencies to share their views and experiences before the consultation closes.
What the consultation covers
The consultation explores how the framework governing agency work can be updated to reflect modern working practices, while improving protection for workers. In particular, it asks for feedback on how to improve three areas:
1. Transparency
The consultation looks at improving visibility around pay, contracts and employment rights for agency workers.
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This could include clearer information about:
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how workers are engaged
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how they’re paid
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what employment rights apply to them.
Greater transparency aims to ensure workers fully understand the arrangements they’re working under, while also creating clearer expectations across the labour supply chain.
2. Choice
Another key theme is giving workers greater choice in how they’re engaged and paid. If these proposals come into play, agencies may need to offer workers multiple engagement options rather than operating a single model.
For example, this could mean agencies having to offer agency payroll alongside other engagement methods. Currently, many agencies don’t provide in-house payroll because of the time required to manage it, the operational complexity and the additional cost and resource needed to run it effectively.
These challenges are only increasing as the Employment Rights Act introduces further complexity. As employee rights expand, so do employer responsibilities, adding more administrative burden requiring greater time, resource and expertise to manage effectively.
3. Security
The consultation also focuses on improving security for agency workers. This includes exploring ways to ensure workers have greater confidence in their income, their employment status and the protections available to them. The goal is to strengthen worker rights, but at the same time, maintain a labour market that continues to support businesses and flexible work.
Why it’s important for agencies to respond
Changes proposed in the Make Work Pay plan are part of a wider effort to modernise employment rights in the UK. For recruitment agencies, the outcomes of this consultation could shape how the industry operates for years to come.
If new rules are introduced, agencies may need to:
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review their engagement models
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update payroll processes
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provide workers with additional options
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adapt internal resources and compliance processes.
This is why industry input is so important. The consultation is an opportunity for agencies to highlight the practical realities, operational challenges and costs involved in running compliant payroll and engagement models.
Your feedback can help ensure that any future regulation works for both workers and businesses.
When does the consultation close?
The consultation will close on 30 April 2026 at 11:59pm.
That means there’s a limited window for agencies and industry stakeholders to share their views and help shape the final policy.
How PayStream can help
We understand that navigating potential regulatory change can feel overwhelming. At PayStream, we work closely with agencies to help them understand and respond to upcoming legislative changes, including umbrella reforms and the Employment Rights Act. Both introduce new considerations for agencies, from increased compliance requirements and added operational complexity.
If the proposals around choice, transparency and security move forward, having the right umbrella partner in place will be more important than ever.
If you’d like to better understand what these proposals could mean for your business, our team is here to help.
Be part of the conversation
The Make Work Pay consultation is a chance for the recruitment industry to play a direct role in shaping future regulation. We encourage all recruitment agencies to take part and share their experiences.
If you’d like to talk through the proposals or understand how they could affect your agency, reach out to your Key Account Manager. We’re always happy to help you explore the options and prepare for what’s ahead.
