Recruitment agency compliance readiness check: ten yes-or-no questions on terms, temps, right to work, AI and late fees

This check is for the owner or office manager of a small recruitment agency in Great Britain with a permanent desk, a temp desk or both. The ten questions cover client terms, transfer fees, the 12-week rule, right to work checks, the Key Information Document, sick pay, AI on candidate data, umbrella companies and late fees, each taken from a rule set out in our guides. This page is general information, not legal advice.

There are ten questions and they take about five minutes. Answer from memory. "Not sure" counts as a gap, because a rule nobody in the office can recall is a rule nobody is checking.

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Recruitment agency compliance readiness check: ten yes-or-no questions on terms, temps, right to work, AI and late fees

1. Does every client have signed or emailed acceptance of your terms on file before the first CV goes out?ChooseYesNoNot sure
2. Do your temp terms offer the hirer an extended period of hire as the alternative to a transfer fee?ChooseYesNoNot sure
3. When a temp returns to the same role after a seven-week gap, do you carry on the 12-week count from where it stopped?ChooseYesNoNot sure
4. Would you accept an EU passport on its own as proof of a new temp's right to work?ChooseYesNoNot sure
5. Does your Key Information Document give the Fair Work Agency as the enforcement contact?ChooseYesNoNot sure
6. Does your payroll wait until the fourth day of sickness before paying a temp statutory sick pay?ChooseYesNoNot sure
7. Do any of your consultants paste candidate CVs into a personal ChatGPT account?ChooseYesNoNot sure
8. Have you written a data protection impact assessment for any software that scores or sorts applicants?ChooseYesNoNot sure
9. Do you check every umbrella company you pay through, including its VAT registration, its Companies House record and workers' payslips?ChooseYesNoNot sure
10. If a client pays a fee two months late, would you let the interest go because your terms do not mention any?ChooseYesNoNot sure

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What each question checks

1. Does every client have signed or emailed acceptance of your terms on file before the first CV goes out? The answer that is in order is "yes". Regulation 17 of the Conduct Regulations was removed on 8 May 2016, so no regulation makes a hirer sign terms. Terms sent after the first CV leave the agency arguing for a fee nobody agreed to. Source: Conduct Regulations 2003; regulation 17 omitted on 8 May 2016 by SI 2016/510. The working is in Recruitment agency terms of business.

2. Do your temp terms offer the hirer an extended period of hire as the alternative to a transfer fee? The answer that is in order is "yes". Regulation 10 allows a transfer fee only if the terms gave the hirer that choice, and only before the later of eight weeks after the assignment ended and fourteen weeks after it started. Source: Conduct Regulations 2003, regulation 10. The working is in Temp-to-perm transfer fees.

3. When a temp returns to the same role after a seven-week gap, do you carry on the 12-week count from where it stopped? The answer that is in order is "no". A break of more than six weeks starts the qualifying period again from zero. A break of six weeks or less only pauses it, and sickness or jury service pauses it for up to 28 weeks. Source: Agency Workers Regulations 2010, regulation 7. The working is in Agency worker 12-week rule calculator.

4. Would you accept an EU passport on its own as proof of a new temp's right to work? The answer that is in order is "no". An EU, EEA or Swiss passport has not proved the right to work since 1 July 2021 unless the person is Irish. Use the Home Office online check with a share code. A missed check costs up to £45,000 per worker for a first breach. Source: Home Office employer's guide to right to work checks. The working is in Right to work check router for recruitment agencies.

5. Does your Key Information Document give the Fair Work Agency as the enforcement contact? The answer that is in order is "yes". Since 7 April 2026 regulation 13A requires contact details for the enforcement officers appointed under the Employment Rights Act 2025. A document that still names the Employment Agency Standards Inspectorate is out of date. Source: Conduct Regulations 2003, regulation 13A, as amended on 7 April 2026. The working is in Key Information Document for agency workers.

6. Does your payroll wait until the fourth day of sickness before paying a temp statutory sick pay? The answer that is in order is "no". Since 6 April 2026 statutory sick pay is payable from the first day of sickness, with no lower earnings limit, at 80% of earnings or the flat rate, whichever is lower. Source: Employment Rights Act 2025 and the government's implementation timetable. The working is in Employment Rights Act 2025 dates for recruitment agencies.

7. Do any of your consultants paste candidate CVs into a personal ChatGPT account? The answer that is in order is "no". OpenAI's policy page, updated 13 March 2026, says conversations on its plans for individuals may be used to train its models unless the user opts out. Its data processing addendum is offered only for ChatGPT Business, Enterprise and the API. Source: OpenAI, 'How your data is used to improve model performance', updated 13 March 2026. The working is in ChatGPT for recruiters.

8. Have you written a data protection impact assessment for any software that scores or sorts applicants? The answer that is in order is "yes". The ICO treats AI scoring of job applicants as high-risk processing that needs a DPIA before the first CV goes in. Its audit of AI recruitment tools, August 2023 to May 2024, produced almost 300 recommendations. Source: ICO, AI tools in recruitment audit outcomes report, November 2024. The working is in AI CV screening and the ICO's rules.

9. Do you check every umbrella company you pay through, including its VAT registration, its Companies House record and workers' payslips? The answer that is in order is "yes". Since 6 April 2026 the agency holding the client contract is jointly and severally liable for an umbrella company's unpaid PAYE. HMRC asks for checks that are regular, reasonable and proportionate. Source: HMRC Employment Status Manual ESM2410 and guidance for employment businesses working with umbrella companies. The working is in IR35 for recruitment agencies.

10. If a client pays a fee two months late, would you let the interest go because your terms do not mention any? The answer that is in order is "no". Unless the contract sets its own rate, a late business invoice earns statutory interest at 8% over Bank Rate, 11.75% for debts falling overdue from 1 July to 31 December 2026, plus a fixed £40, £70 or £100. Source: Late Payment of Commercial Debts (Interest) Act 1998; GOV.UK late commercial payments guide. The working is in Client not paying a recruitment fee.

How to use the result

The list under your score is a to-do list. Each line names the rule, where it comes from and the page that shows how to deal with it. Put a name and a date against each one. A gap that has an owner and a date is being handled; a gap that everyone knows about and nobody owns is how firms end up explaining themselves later.

Do the check again each quarter, and again whenever a rule in this sector changes. Give it to a second person in the office without showing them your answers. Where the two of you disagree, the procedure is not written down clearly enough, and that is worth knowing whichever of you is right.

A good score is not a certificate. The questions cover the points our guides cover, which are the ones that come up most often in a small firm; they are not every duty a firm has. This page is general information, not legal advice.

Overlyft sets up AI assistants for recruitment agencies: they prepare drafts for a person to approve. They do not make a firm compliant, and none of the ten answers depends on them.