EAA Business Regulations

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (EAA Regulations)
On the 6th April 2004 the Government introduced the EAA Regulations to raise standards within the recruitment industry. Drafted by the DTI, the EAA Regulations stipulate how recruitment agencies and recruitment businesses should operate, providing added protection for work seekers and Limited Company Contractors (LCCs) using the services of recruiters.

Silicon Valley Consultants operates as both an employment agency and an employment business.

Work Seekers
This section details some of your individual rights if you use Silicon Valley Consultants to find you permanent or contract work.

Recruiters, whether permanent recruiters (employment agencies) or contract / temporary recruiters (employment businesses) are regulated by the Conduct of Employment Agencies and Employment Business Regulations 2003.

General Obligations

1. It is unlawful for any agency or employment business to charge you a fee for providing work finding services.
2. If a recruiter offers you an incentive or gift to use their services, you should be given information as to the terms of such an offer.
3. You should be informed of any charges that the recruiter may make for any additional services or goods that they provide.
4. A recruiter cannot offer work-finding services on the condition you use a chargeable service such as a CV writing service.
5. A recruiter must confirm on what basis they are to offer work finding services, the type of work they are looking for you and the terms which apply between you e.g. if you are to be supplied to a hirer as a temporary / contract worker, we will give you a contract setting out the terms of your engagement.
6. If you carry out work on an assignment as a temporary worker but are unable to obtain a signed timesheet, you are entitled to be paid for the hours you worked. We are however permitted to delay payment for a reasonable period to check whether you have worked the hours claimed.
7. Before you commence an assignment or a position, you must be given information about the proposed position including: The identity of the hirer; the start date; the likely duration for the work; the type of work; the location; hours; any risks to health and safety and steps the hirer has taken to prevent or control such risks; the experience, training and qualifications required for the role; any expenses payable by you; the actual rate of remuneration to be paid.
   8. For permanent roles, the minimum rate of remuneration and length of notice should be confirmed to you verbally and in writing.

Limited Company Contractors (LCCs)
Opting out of the regulations
During the consultation process before the launch of the Regulations, industry stakeholders argued that LCCs did not want to be treated akin to PAYE workers, as it was considered likely that such legal formalities would significantly jeopardise an LCCs tax position. The DTI has, as a result, included provision that enables LCCs to opt out of the protection of the Regulations so that they may continue to enjoy the tax benefits of supplying their services through a limited company.
If you remain within the Regulations we will owe you and the client a range of obligations i.e. points 5, 6 & 7 above. With the exception of 6, we usually provide our contractors with all relevant information as a matter of course.

If you were to opt out of the Regulations, then it is likely to have implications for your tax position as follows:

1. Under Inland Revenue IR35 rules there are a range of factors which are assessed by the Inland Revenue to determine whether an LCC is genuinely self employed, such as:
   The contractual relationship between the parties, the level of control a client maintains over the LCC, the financial risk taken by the LCC and the length of engagement.
2. If you decide to enjoy the legal protection of the Regulations and be treated akin to a PAYE worker, then the obligations owed to you by Silicon Valley Consultants may affect the assessment of your status for tax purposes under Inland Revenue tests of self-employment.
3. If you are genuinely self-employed then you may wish to consider opting out so as to maintain your tax advantages.
4. Whether you decide to remain within the Regulations or to opt out is a decision for you. In any event, LCCs who are considering remaining within the Regulations or opting out should seek independent tax advice.

How do I opt out?
In order to opt out, you must give Silicon Valley Consultants notice in writing, which must detail the LCC name and address and the name and address of the individual. This must be signed by an officer of the LCC and the individual concerned (one signature is sufficient if you are one and the same). Once you have given us this notice, providing it is not mid-assignment, then none of the Regulations will apply. You will remain opted out of the Regulations for the duration of that contract period. You must also give opt out notification at the start of any contract extension period. In order to opt out all you have to do is simply sign and return the relevant Contract Confirmation Letter and Contract Extension Letter we will send to you.

This is not a definitive guide to your rights as a work seeker and further information can be obtained from the DTI website: http://www.dti.gov.uk/er/agency/newregs.htm