A swing to temporary workers raises the stakes on temporary worker compliance

News · End-Hirers & Recruitment Agencies · OPRaaS Platform

Temporary worker compliance is rising up the agenda for a plain reason: UK employers are filling more roles with temporary staff and fewer with permanent ones, with permanent hiring falling at its fastest rate for ten months. When a workforce tilts towards temporary and agency labour, the checks behind each hire stop being an annual housekeeping task and become a standing, evidenced discipline.

The shift is documented in new research from KPMG and the Recruitment and Employment Confederation (REC), reported by Joanna Partridge in the Guardian on 8 June 2026. The survey of 400 recruitment and employment consultancies found a strong rise in temporary placements in May, while permanent appointments fell at their quickest pace for ten months.

Neil Carberry, the REC’s chief executive, said temporary work was making up the gap as businesses paused permanent hiring in the face of higher costs and wider uncertainty. Jon Holt of KPMG noted that many permanent hiring plans were being delayed or put on hold, while some employers turned to temporary contracts to keep flexibility.

That flexibility comes with a quieter cost. Every temporary worker an organisation engages is another party whose right to work, employment status and payment route has to be confirmed, often through an agency or umbrella the end-hirer does not directly control. The faster the temporary headcount grows, the more verification work moves up the chain to the businesses at the top of it.

What the swing to temporary hiring actually changes

A temporary-heavy workforce is not simply a permanent one with shorter contracts. It carries a different compliance shape. Permanent employees are onboarded once and sit inside the employer’s own payroll and HR controls, whereas temporary and agency workers arrive through intermediaries, on varied contract types, and they turn over quickly, so the same checks have to be repeated again and again across a changing population.

For recruitment agencies, this is core business rather than an exception, and the volume is the point. An agency placing hundreds of temporary workers a month is running hundreds of right-to-work checks, status assessments and payroll set-ups, each of which has to be correct and, just as importantly, recorded.

For end-hirers, the same activity sits one step removed, behind a supplier they are trusting to get it right. That is where temporary worker compliance becomes a supply chain question rather than an internal one.

Why more temporary workers means more to verify

The agency workers who fill these gaps bring statutory entitlements that permanent recruitment does not trigger in the same way. Under the Agency Workers Regulations 2010, agency workers gain equal treatment on pay and basic working conditions once they complete twelve weeks in the same role, a threshold that is easy to miss when assignments are extended piecemeal. Holiday pay, working-time records and the correct day-one written particulars all have to be right from the outset.

This is not exotic territory. It is ordinary employment law, applied to a workforce that changes shape every week. What makes it hard is not the individual check but the scale and the churn, and the fact that the evidence has to exist months later if anyone asks for it. That, in practice, is the real test of temporary worker compliance.

The four exposure families a temporary workforce enlarges

This is the territory the OPRaaS Labour Supply Chain Assurance Self-Certification Course opens with. Module 1 sets out four families of exposure that any organisation relying on intermediated labour has to manage, and a temporary-hiring swing enlarges all four at once.

• Financial penalties. Non-compliance with PAYE, the Construction Industry Scheme and wider tax rules can bring fines and HMRC enquiries.
• Reputational damage. Allegations of worker exploitation or modern slavery in the chain can erode the trust of clients and stakeholders.
• Criminal liability. Under the Criminal Finances Act 2017, an organisation can be held criminally accountable for the facilitation of tax evasion within its supply chain.
• Operational disruption. Gaps in supplier oversight can surface as legal disputes, lost contracts and an interrupted supply of workers.

The course was built for exactly the people who feel this first: HR, tax, procurement, recruitment and payroll professionals at end-hirers, agencies, umbrella companies and managed service providers. All four grow together. The more of the workforce that runs through those intermediaries, the more temporary worker compliance has to be run as a system rather than a series of one-off checks.

Where temporary worker compliance becomes an evidence question

Here is where temporary worker compliance shifts from a yes-or-no question to an evidence question. It is not enough to have checked a worker’s right to work or an umbrella’s PAYE status at some point. The standard HMRC and auditors work to is whether you can show the check was done, when, and on what basis.

HMRC makes much the same point in its own guidance on labour-provider due diligence, which asks businesses to confirm a supplier is legitimate, check its VAT registration, satisfy themselves the arrangement is commercially sustainable, and confirm workers are paid correctly. As OPRaaS reads that guidance, each item is a point you evidence, not a box you tick once.

The exposure rarely arrives with warning. It tends to show up when someone asks for the record and there is none, because the relationship was built on assurance rather than verification. A non-compliant payer can push its problem up the chain, and the business that engaged it can be the one HMRC turns to.

Every temporary worker an organisation takes on is another node in its labour supply chain to verify, and verification only counts when it can be evidenced on demand.

How the OPRaaS Virtual Compliance Director keeps temporary worker compliance live

The OPRaaS Virtual Compliance Director (OPRaaS VCD) platform is built to treat temporary worker compliance as a standing control rather than an onboarding formality. It embeds senior governance leadership into a recruitment agency or end-hirer without the cost of a full-time director, and builds audit-ready controls across right to work, IR35, CIS, GLAA, modern slavery and HMRC’s wider labour supply chain expectations.

Two examples make it concrete. Right-to-work and identity checks are captured at onboarding and re-run on a risk-based cadence, with exceptions flagged to the agency and the end-hirer inside the same evidence record the platform produces on demand.

Each supplier umbrella and sub-agency is also monitored against Companies House for director and ownership changes, and against Creditsafe for credit-risk moves such as county court judgments and financial-strength downgrades. A supplier that was sound at onboarding does not, then, drift out of compliance unnoticed.

OPRaaS, On-Pay-Roll-as-a-Service, is a systemised governance and workforce management partner for organisations that rely on temporary, contractor and contingent labour, from recruitment agencies and end-hirers to umbrella companies, managed service providers and public sector buyers. It is approved on the UK Government Commercial Agency (formerly Crown Commercial Service) frameworks including RM6310 Audit & Assurance Services (Lots 2 & 4), RM6219 and RM6237 Learning & Training Services DPS.

Why temporary worker compliance belongs with the board

For board directors, the swing to temporary hiring is a workforce decision with a compliance tail. That tail sharply comes into focus when scrutiny arrives. A larger temporary and agency population is a sensible response to an uncertain economy, but it widens the surface that has to be verified and evidenced.

That is true above all for public sector buyers such as NHS trusts and councils that lean heavily on agency and contract labour, where temporary worker compliance feeds straight into procurement assurance.

The practical conclusion is a prescriptive one. Treat temporary worker compliance as a continuous discipline now, while the temporary headcount is climbing, rather than reconstructing it later under audit. The organisations that build the evidence as they go will be the ones that can produce it on the day it is asked for, and that capability is worth more than any after-the-fact scramble.

Compliance is your asset. Evidenced daily.

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“Own your compliance as an asset.“

Drawing on reporting by Joanna Partridge in the Guardian, published on 8 June 2026, on the KPMG and REC report; HMRC’s guidance on labour-provider due diligence; the Agency Workers Regulations 2010; and the OPRaaS LSCA Self-Certification Course Module 1.