Should temp workers have employee benefits? The benefits debate in the UK

The conversation around the rights of temporary workers, in particular benefits for temporary workers, is a hot topic – often the subject...

Nicholas Kira

1 January 1970

20 min read

The conversation around the rights of temporary workers, in particular benefits for temporary workers, is a hot topic – often the subject of intense debate.

Some argue that benefits should only be reserved for full-time, permanent employers. Others argue that temporary workers work just as hard as anyone else, so why shouldn’t they be rewarded for that?

Temporary workers, also known as agency workers or contingent workers, make up a significant portion of the UK workforce, contributing to the economy across various industries. However, their access to employee benefits often differs from that of permanent employees, raising concerns about fairness and equity in the workplace.

Those in favour of employee benefits for temp workers say that they deserve the same perks as their permanent counterparts, including holiday pay, sick leave, wellbeing support, and pensions, regardless of their employment status. They emphasise the contribution of temporary workers to the economy as a whole and highlight the need for a more inclusive approach to employee benefits, which, in turn, would increase job satisfaction and improve retention rates for employers.

Those who don’t feel that temp worker benefits should be on par with those for permanent workers, argue that  providing such benefits could increase costs for businesses and potentially limit temp work opportunities. They say that reduced benefits should come with the territory if you choose temporary employment, as those engaged in short-term arrangements may not need or use the same level of benefits as a permanent employee.

As the demand for temporary workers continues to grow, the debate surrounding the benefits they should receive will only grow louder. Permanent employees will undoubtedly continue to voice their opinions, as employers try to strike the balance between ensuring fair treatment for all workers while maintaining the flexibility and cost-effectiveness of temporary employment.

In terms of the official position of the Government on the benefits debate for temporary workers, they’ve taken steps to address the issue by introducing legislation that provides some basic rights and protections for temporary workers; including the right to equal pay for equal work and access to certain statutory benefits.

However, the debate over employee benefits for temporary workers still remains largely unresolved, and there will no doubt be further discussions to find a solution that addresses the concerns of both temporary workers and employers.

Read on for the pros and cons of employee benefits for temporary workers, current laws around the rights of temporary workers, employer views on providing benefits, the views of unions in this country, the economic impact of providing benefits, and more, as we dive deeper into this topic.

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The pros and cons of employee benefits for temp workers

 

The advantages and disadvantages

The idea of providing employee benefits to temporary workers is a complex issue with both advantages and disadvantages. While providing benefits can lead to a more engaged, committed, and productive workforce, it can also place an additional financial strain on employers and leave them with a number of time-consuming administrative tasks to undertake for relatively short-term roles.

 

Advantages

There are many advantages to providing benefits for temporary employees. It would be easy to give you a whole long list, but here the main advantages:

Increased employee satisfaction and engagement: providing benefits to temporary workers can significantly enhance their job satisfaction and engagement with their role. When temporary workers feel valued and appreciated, they’re more likely to be motivated and committed to their work. This can lead to improved productivity, fewer absences, and lower turnover rates, meaning that employers can call upon the services of the same reliable, committed employees time and time again

Enhanced employer reputation: offering benefits to temporary workers can enhance an employer’s reputation as a fair organisation, who are concerned about the welfare of their employees. This positive reputation enables them to attract and retain top talent, both temporary and permanent, giving the company a competitive edge over other employers in their specific sector.

Improved recruitment and retention: providing benefits to temporary workers can make a company more attractive to potential candidates, especially those seeking a more comprehensive benefits package, outside of their basic wage. This can lead to a wider pool of qualified applicants and a higher likelihood of attracting and retaining the cream of the crop when it comes to temporary workers.

Reduced legal risks: by providing benefits to temporary workers, employers can reduce the risk of legal challenges and disputes. This is particularly important as temporary workers are increasingly asserting their rights and seeking equal treatment under employment law.

Improved physical and mental wellbeing: Depending on the benefits available to temporary workers, they may well improve their physical and mental wellbeing.

For example, some benefits include financial cover, such as sick pay, critical injury cover, or payouts for family or bereavement leave. Lifting the financial burden from temporary workers can reduce the stresses placed on them, improving their mental wellbeing.

Other benefits could directly impact an employee’s mental wellbeing, such as the availability of mental health support lines or access to counselling, if needed.

And some benefits can relate to an employee’s physical wellbeing, such as free exercise classes, access to an online GP, access to a physio, and so on.

 

Disadvantages

Increased financial costs: providing benefits to temporary workers can add to an employer’s costs. This is especially true for small businesses with limited resources. The cost of benefits can vary depending on the type of benefits provided, the number of temporary workers employed, and the overall size of the workforce.

Time-consuming admin: rolling out benefits programmes for temporary workers can add to an employer’s administrative load. This includes tasks such as enroling workers in benefits plans, keeping track of their eligibility, and managing claims and payments.

Potential for abuse: There’s the potential for some temporary workers to abuse benefits if they’re not properly managed. This could include misusing benefits, making fraudulent claims, or failing to comply with the rules of an individual benefits programme.

Implementing different benefits structures: Implementing different benefits structures for a mixture of both temporary and permanent workers can be complex and somewhat challenging – particularly if there’s different access criteria, depending on the type of employee. This can lead to confusion among workers and potential errors in providing the right benefits.

Perceived unfairness: with different criteria for different employees, dependent on whether they’re permanent or temporary, or – if they’re temporary – how long they’ve worked for a company, this may cause some to see the eligibility criteria as slightly unfair. To avoid this, employers should be completely transparent to all employees as to what they have to do/achieve in order to access benefits.

At the very least, employers should look to provide a limited benefits package to temporary workers. This could include basic benefits such as paid sick leave, statutory holiday pay, and access to an employee assistance programme. Alternatively employers may find it more cost-effective to provide no benefits to temporary workers, focusing instead on offering competitive wages and other forms of compensation, such as performance-related bonuses.

 

Legal framework in the UK

 

Existing laws and regulations governing the rights of temporary workers

When it comes to temporary employment rights in the UK, workers are protected, in many respects, by employment law – designed to ensure fair treatment for all and prevent exploitation by employers.

These laws and regulations each address specific aspects of temporary employment.

Chief among them, in relation to temporary worker rights, is the Employment Rights Act 1996, covering such things as; employers having to provide a written statement of employment particulars (your job description, pay rate, hours of work, and so on), the National Minimum Wage, and paid time off for holidays. In addition to this, the Agency Workers Regulations 2010 specifically address the rights of agency workers, which entitles them to equal pay and treatment after 12 weeks in the same job with the same employer.

Working hours themselves are regulated by the Working Time Regulations 1998, setting limits on the number of hours an employee can reasonably be expected to work, and ensuring adequate rest breaks for temporary workers.

To prevent discrimination, the Equality Act 2010 safeguards temporary workers against unfair treatment based on race, gender, sexual orientation, disability, age, religion, or belief.

And as of 2012, all employers must enrol eligible temporary workers into a workplace pension scheme, with employer contributions.

Enforcement of these rights primarily falls under the Employment Agency Standards Inspectorate (EAS), part of the Health and Safety Executive (HSE). The EAS investigates complaints and takes action against any employer who doesn’t comply with the rules. Temporary workers can also seek support from organisations like the Advisory, Conciliation and Arbitration Service (ACAS), who provide free advice on employment rights and disputes.

These are the basic rights available to temporary workers, as of now. Paid time off for family or bereavement leave, private medical insurance, accident cover, access to certain perks or discounts – these are all at the discretion of each individual employer.

The rights of temporary workers are constantly under review, and the government regularly consults with all those involved in employment to identify areas for improvement and potential changes to the law.

More recently – with a growing number of temporary workforce – the focus has been on ensuring equal rights from the first day of a job and introducing a new category of ‘flexible workers’,

As the workforce evolves, and both employers and employees adapt to new ways of working,  temporary worker rights will continue to develop, driven by the need for a fair and equitable employment landscape.

The position of unions and advocacy groups

 

There are a large number of different trades unions across the UK, many of them standing up for workers in specific sectors, such as teachers, nurses, or firefighters – while some of them support workers as a whole, whether permanent or temporary.

There’s a general consensus among all of these unions that employee benefits should be available to temp workers, with the case being made that it is simply a matter of fairness and equity. They believe that temporary workers should enjoy the same benefits as permanent employees, regardless of their employment status. They also argue that providing benefits can improve employee satisfaction, engagement, and retention, which would only serve to benefit employers in the long run.

It would be nigh on impossible to cover the stance taken by every individual union in the UK, but here are the view of three of the largest unions in the country:

The Trades Union Congress (TUC): The TUC is the largest union in the UK, representing over 5.5 million workers. The TUC has made their position clear, calling for all temporary workers to be entitled to the same benefits as permanent employees, including paid time off, sick pay, and access to pensions.

The GMB Union: The GMB Union represents over 600,000 workers in a variety of industries, including manufacturing, construction, and transport. Over the years, The GMB has consistently campaigned for equal rights for temporary workers and has supported legislation to extend benefits to these workers.

UNISON: UNISON is the largest public sector union in the UK, representing over 1.3 million workers. UNISON has called for the government to do more to protect the rights of temporary workers, including providing them with access to benefits.

Another large union in the UK is Unite, with some 1.4 million members across all different industries. Their views and policies are very much in line with those set out above, for the other unions.

The position of advocacy groups is very much in line with that of the unions, in that they generally support the idea of providing benefits to temporary workers, arguing that this is necessary to address the growing inequality in the UK workforce. They believe that temporary workers are often treated unfairly and are not given the same opportunities as permanent employees. They also point out that providing benefits can help to reduce poverty and improve the lives of temporary workers and their families.

Three specific advocacy groups with very strong views on the matter include:

The Resolution Foundation: The Resolution Foundation is a think tank that focuses on living standards and low-income families. This group has called for the government to extend benefits to temporary workers, on the basis that it would help to reduce poverty and inequality.

The Institute for Public Policy Research (IPPR): The IPPR is a think tank that focuses on social, economic, and political issues. The IPPR has called for the government to introduce a new category of ‘flexible workers’ who would be entitled to a range of benefits, including paid time off and access to pensions.

The Joseph Rowntree Foundation (JRF): The JRF is a charity that focuses on poverty and social exclusion. The JRF has called for the government to do more to support temporary workers, arguing that they are a vulnerable group who are often excluded from social security benefits.

The Government would argue that they’ve already taken steps to address the issue of temporary worker rights and temporary employee benefits in particular. However they’ve not yet gone as far as most unions and advocacy groups would like.

The debate over providing benefits to temporary workers is likely to continue well into the future, with those unions and advocacy groups continuing to put pressure on the Government to take more action, while businesses often argue that providing such benefits is neither affordable or practical. The outcome of this debate will have a significant impact on the lives of millions of temporary workers in the UK.

 

Economic implications

 

The economic impact of providing benefits to temporary workers

A key consideration in the benefits debate for temporary workers is just what economic impact providing such benefits would have, both on individual employers and wider society.

It may have many positive side-effects, but for some employers the cost of implementing comprehensive benefits may be too much to bear.

Let’s have a look at both the positives and the negatives:

 

Positive economic implications

Increased productivity: Temporary workers who have access to benefits are likely to be more satisfied and motivated, which can lead to increased productivity, as they feel more loyal to an employer and perhaps feel the need to earn those benefits available to them.

Reduced turnover: providing benefits can also help to reduce turnover among temporary workers. This can save employers money on recruitment and training costs. A study by the Institute for Fiscal Studies found that providing temporary workers with access to benefits could reduce turnover by up to 10%.

Improved employer reputation: Employers who provide benefits to temporary workers are more likely to be seen as fair and responsible employers. Not only will this make it easier for them to attract and retain top talent, but – from a PR perspective – a positive employer reputation can also lead to increased customer loyalty and sales.

Reduced poverty and inequality: providing benefits to temporary workers can help to reduce poverty and inequality. This is because temporary workers can sometimes be on lower pay rates and have limited access to social security benefits. Giving them access to certain benefits can help to raise their living standards and reduce their reliance on government assistance.

Increased consumer spending: When temporary workers have more financial security due to the benefits available to them, they’re more likely to spend in the broader economy, stimulating consumer demand.

 

Negative economic implications

Increased costs for employers: offering benefits to temporary workers can increase costs for employers, in terms of having to pay for those benefits themselves. The cost of benefits can vary depending on the type of benefits available and the number of temporary workers employed.

Increased administrative workload: creating benefits programmes for temporary workers can add to an employer’s administrative burden. This includes tasks such as enroling workers in benefits plans, tracking eligibility, and managing claims and payments. In turn, there may be another cost implication in terms of employers having to hire other employees to deal with this increased administrative workload.

Market competition: employers offering benefits may face increased competition from those who do not, as those who do not may be able to offer higher salaries. This is a particular issue in sectors where cost control is a significant factor in winning contracts or remaining competitive.

Impact on smaller businesses: Smaller businesses may find it much harder to absorb the added costs associated with providing benefits to temporary workers, potentially affecting their ability to compete with the larger players in their field.

Overall The economic implications of offering employee benefits to temporary workers varies depending on factors such as the industry, the specific benefits offered, the general conditions in the job market, and the financial stability of employers. It can be a difficult balancing act, trying to ensure the economic wellbeing of both temporary workers and businesses.

 

Innovative solutions: Flexers Benefits

Potential solutions to the temporary worker benefits debate

We’ll come onto specific Flexer Benefits shortly, but, in a more general sense… trying to unpick the benefits debate for temporary workers in the UK requires a multi-pronged approach which considers both legislative changes and genuine alternative solutions, sustainable in the long term for employers and supportive of temporary workers’ rights.

Possible options include:

Expanding statutory benefits: employers could extend the coverage of statutory benefits, such as paid time off and sick pay, to include temporary workers. This would ensure a minimum level of protection for all workers, regardless of their employment status.

Introducing a universal benefits scheme: this would involve the Implementation of a scheme that provides access to basic benefits, such as healthcare and pensions, to all workers, including temporary workers. This would simplify the benefits system and ensure that everyone has access to essential support.

Mandating benefits for temporary workers: the government could bring in legislation that mandates employers to provide certain benefits to temporary workers, such as access to employer-sponsored pension schemes and childcare assistance. This would ensure that temporary workers are not excluded from important benefits.

Strengthening enforcement mechanisms: again, this should come from the Government – enforcement mechanisms could be put in place to ensure that employers comply with regulations regarding temporary worker benefits. This might include increasing the resources and authority of enforcement agencies and introducing stricter penalties for non-compliance.

Creating industry-specific agreements: industry-specific agreements between unions and employers could be developed, to establish minimum standards for temporary worker benefits. This would allow for tailored solutions that cater for the specific needs of different industries.

Encouraging voluntary benefits provision: employers could be encouraged to provide benefits to temporary workers, by being offered tax breaks or other financial incentives. This could motivate employers to voluntarily extend benefits, even if not mandated by law. For a deeper insight into tax considerations for temporary workers, explore our blog post on Understanding Tax for Temporary Workers. Understanding the nuances of taxation is crucial for both employers and temporary workers alike.

 

Flexer Benefits: what we offer

Although this blog post is about employee benefits for temporary workers in a more general sense, it would be remiss of us not to mention that Indeed Flex, as an employer (if you sign up to our app you’d work for different companies, but Indeed Flex would be your legal employer), offer a whole range of benefits that you simply wouldn’t get elsewhere.

We know that temp employees work just as hard as any permanent employee, so why shouldn’t you be rewarded in a similar fashion to them?

Our comprehensive Flexer Benefits package is available once you’ve completed the required number of shifts to qualify.

These benefits can broadly be split into three categories, which include:

Insurances:

  • Sick pay
  • Accident/critical injury cover
  • Family leave (a lump sum payment)
  • Bereavement leave (also a lump sum payment)

Health and wellbeing:

  • Same-day access to a digital GP (7 days a week)
  • Access to a digital physio
  • A 24/7 mental wellbeing line
  • Face-to-face counselling
  • 24/7 financial advice

Discounts on big brands, covering:

  • Groceries
  • Petrol
  • Eating out
  • Entertainment
  • Tech appliances
  • Fashion/clothing

You’ll be hard pushed to find a similar package on offer elsewhere in the world of temporary employment, but we like to look after those who work with us (our Flexers).

Happy employees make for happy clients (the companies who offer jobs through our platform), so everyone wins. Your financial, physical, and mental wellbeing are looked after, giving you less to worry about, and companies know they can retain your services and rely on you time and time again.

 

Flexers Experiences

 

  • Share real-life stories and experiences of temporary workers regarding employee benefits.
  • Discuss how benefits can impact their lives and job satisfaction.

 

In Summary: should temp workers have employee benefits?

 

The short answer to this is: yes they should.

At the very least, they should receive basic benefits as a fundamental right, such as sick pay, holiday pay, and a pension.

However the debate over the rights of temporary workers and exactly what benefits they should get is slightly more nuanced, and requires exploration beyond a simple ‘yes’ or ‘no’.

Those who feel temporary workers should have greater access to benefits point out that they work just as hard as any permanent employee, contribute an enormous amount to the economy, and so shouldn’t be penalised for not having a longer-term arrangement.

They also point out that a proper benefits package would lead to greater financial security and enhanced job satisfaction. This would mean they’re much more likely to keep working for the same employer – reducing turnover rates for that employer and the cost of constantly training new recruits.

In contrast, those who don’t feel that temporary workers should receive the same benefits as permanent staff say that providing them could increase costs for businesses and therefore limit the number of jobs they’re able to offer.

They also state that the acceptance of reduced benefits is part and parcel of choosing to work in temporary roles.

Successive governments have brought in certain laws and regulations to protect temporary employers, such as the Employment Rights Act 1996, the Working Time Regulations 1998, and the Agency Workers Regulations 2010, but the rights and benefits they provide are fairly basic.

Often, it’s down to individual unions and advocacy groups, such as The Trades Union Congress (TUC) and The Joseph Rowntree Foundation (JRF), to fight for the rights of temporary workers and push for legislation that will offer a more comprehensive benefits package for all.

There are many potential solutions that are under review, but these are largely in the early stages of discussion and are some way off of being implemented.

Ultimately, it’s down to individual employers as to what benefits they choose to offer temporary employees, as they try to ensure fair treatment for all workers, while maintaining financial stability amid rising costs.

The debate will continue long after you’ve finished reading this blog post, but know that – when it comes to benefits for temporary workers – at Indeed Flex, we’ve got your back.

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