Recruitment agencies are warned to get ready for “a large amount of pay rate changes and the workload that comes with it” in connection with a temporary increase to National Insurance (NI) that takes effect from 6 April 2022.The 1.25% increase in NI will be used to fund the NHS, health and social care.

In April 2023, the NI contributions will drop to 2021 to 2022 tax year levels, and will be replaced by a new 1.25% health and social care levy, with the revenue ringfenced to support UK health and social care bodies.

With the increase affecting employers, employees and self-employed, umbrella company giant’s Lauren Blackledge told a webinar audience on 17 February that the recruitment agencies should consider “operational changes” and “and how this will be passed down to the umbrella or the PAYE provider”.

Daniel Haslam, another giant speaker on the webinar said: “Generally speaking, hirers are not looking to be increasing the rates to the workers.” However, he added, given the “dogfight” for talent in the market currently, “rates are continuing to rise”, and he urged agencies to discuss with clients “what their position is”.

Blackledge suggested that it might be “good advice” to their clients “to consider [rate] increases for those [contractors, workers] that they just can’t afford to lose”. She went on to say, “we suggest that the agency prepares for a large amount of pay rate changes and the workload that comes along with it. So we’d advise the agencies to start to discuss this that they consider any changes to assignment rates and upcoming renewals rather than waiting until April”.

Image credit | Alamy