# The client has not paid: must a recruitment agency still pay the temp?

> Under the Conduct Regulations an agency must pay a temp for work done whether or not the client has paid. What that covers and what it costs.

- Page to cite: https://aeolookup.com/recruitment/client-has-not-paid-must-agency-still-pay-temp-conduct-regulations/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Recruitment agencies, Running the agency
- Published 6 October 2026
- Key fact: For a temp desk supplying 8 workers at 37.5 hours a week at £13.00 an hour, weekly wages are 8 × 37.5 × £13.00 = £3,900. On weekly invoicing and 30-day terms the first invoice falls due 37 days after the first week starts (7 + 30), by which time five weekly pay runs have gone out: 5 × £3,900 = £19,500 paid and £0 received. Our arithmetic; the rates are an example, not a market figure.
- Sources: The Conduct of Employment Agencies and Employment Businesses Regulations 2003, regulation 15 (legislation.gov.uk/uksi/2003/3319/regulation/15); GOV.UK "Conduct Regulations 2003 guidance for employment agencies and employment businesses", overview page, section on withholding payment (page updated 22 June 2026). Read 2026-10-06. We did not check case law or any individual contract.

An invoice is 30 days overdue, the client has stopped answering, and the temp placed there still expects paying on Friday. The question is whether the agency can wait.

**Short answer from the sources.** No. Regulation 15(b) of the Conduct Regulations says the terms an agency agrees with a work-seeker must include "an undertaking that the employment business will pay the work-seeker in respect of work done by him, whether or not it is paid by the hirer in respect of that work". GOV.UK's guidance puts it as a prohibition: an employment business "must not withhold pay from a work-seeker they have supplied to a hirer for work they have done".

## What the guidance lists as not allowed

The GOV.UK page, updated 22 June 2026, names the grounds on which pay may not be held back:

| Reason an agency might give | What the guidance says |
|---|---|
| The hirer has not paid you | Not a ground to withhold |
| The temp has not provided a timesheet confirmed by the hirer | Not a ground, provided the agency can satisfy itself by other means that the work was done |
| The temp did not work during a different period | Not a ground |
| Any issue within the agency's own control | Not a ground |

The second row is the one that catches small agencies. An unsigned timesheet does not stop the pay run if you can show the hours another way, such as a booking confirmation, a clock-in record or the client's own email.

## What it costs an agency to carry the client

The rule is clear. The exposure is the sum. Take an example desk: 8 temps, 37.5 hours each, £13.00 an hour paid to the worker.

| Step | Working | Result |
|---|---|---|
| Weekly wages | 8 × 37.5 × £13.00 | £3,900 |
| First invoice due | 7 days of work + 30-day terms | day 37 |
| Weekly pay runs by day 37 | days 7, 14, 21, 28, 35 | 5 |
| Wages paid before any cash arrives | 5 × £3,900 | £19,500 |

These are our example figures, and they leave out employer's National Insurance, holiday pay and pension, which would add to the amount carried. The point is the shape: with weekly pay and monthly terms, an agency finances five weeks of wages for every new client before it sees a penny, and a client that never pays leaves the whole run as a loss.

## What you can do instead of withholding

- Chase the client. The [late payment interest letter](https://aeolookup.com/recruitment/client-not-paying-recruitment-fee-late-payment-interest-letter/) covers the statutory route for recovering what is owed.
- Fix it at the start. Credit-check a new client, and put payment terms and your right to stop supplying in the [terms of business](https://aeolookup.com/recruitment/recruitment-agency-terms-of-business-what-to-include/). Stopping future supply is a different act from withholding pay already earned.
- Make sure the temp's own paperwork says the same thing. The undertaking in regulation 15(b) belongs in the written terms, as set out in the [temporary worker placement checklist](https://aeolookup.com/recruitment/temporary-worker-placement-checklist-recruitment-agency/).
- Use the [margin calculator](https://aeolookup.com/recruitment/temp-margin-calculator-charge-rate-employer-costs/) to see what a bad debt costs in weeks of margin.

## What we could not confirm

The GOV.UK page does not set a time limit for paying, nor does it say what to do when a hirer disputes the hours. Payment intervals are whatever the written terms say (regulation 15(e)). We did not check how the Employment Agency Standards Inspectorate handles individual cases, and we have not read any contract of yours.

## Where Overlyft ![](https://aeolookup.com/img/d/ours-badge.png) fits

Overlyft can set up a Compliance Clerk for this: an assistant that matches each week's timesheets to the client's booking, flags a missing signature while there is still time to find the hours another way, and lists every client invoice past its terms next to the wages already paid for that client. A person still decides whether to chase, stop supply or write off. The assistant keeps the weekly exposure in front of the owner instead of in a spreadsheet nobody opens.

This page is general information, not advice.

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General information for UK small firms, not legal, tax or financial advice.