What is a Key Information Document (KID)?

Key Information Document is one of the first things an employment business gives to the agency worker. It is a document that outlines a worker’s relationship with their agency and the intermediary or umbrella company used in their engagement. It contains key information about the engagement, including pay details, holiday entitlement and other benefits.

Key Information Document attempts to bring transparency for agency workers, mainly pay-related, preventing them from falling for tax avoidance schemes, mistreatment and unlawful deductions.

It is important to note that the key information document is not expected to contain any information related to the contractual terms within the document. Instead, it is only designed to provide workers with a brief overview of how the worker’s terms of engagement will affect their pay during their assignment.

It will give the agency worker an idea of how much they would take home, basically an approximate picture of their net take-home pay. This document will mostly contain pay related facts. It is not intended to fully represent contractual terms to which agency workers may agree.

The regulation made it mandatory that all agency workers be given a key information document before agreeing to terms with the employer. It became a legal requirement and must be provided to the agency worker before agreeing to the contractual terms to have all the necessary information on hand before deciding.

It is also important to note that the employment business is not required to issue a revised key information document for consecutive assignments unless a change requires a reissuance. As a best practice, employment businesses would have a standard key information document for multiple engagements.

An example demonstrating when a new key information document is required?

Worker	Before 6 April 2020	After 6 April 2020	Key information document required?
Worker X	Employment Business A	Employment Business A	No, as they have not signed up to a new employment business
Worker Y	Employment Business A	Employment Business B	Yes, as they have signed up to a new employment business

It is the responsibility of the employment business to provide key information document to the agency worker, even when the agency worker is engaged through an intermediary or umbrella company.

When a worker is employed by an umbrella company or other intermediary, the money earned on their assignment will be transferred to the umbrella company or the other intermediary. After all the deductions, the umbrella company or the intermediary will transfer the wage to the worker’s account.

The payslip of the worker will reflect the worker as an employee of the umbrella company or the intermediary.

What is the format of a key information document?

The following things must be included in the KID:

1. Key Information Document should be labelled on the top
2. A brief explanation about its purpose
3. Contact details of the Employment Agency Standards (EAS) inspectorate
4. The details of ACAS who can put agency workers in contact with EAS – Optional
5. In length, the document should not exceed two A4 pages. If the content does not fit into two A4 pages, a summary of relevant information should be provided and a reference where complete information can be found.

Following facts should be included in the key information document

Facts	What this means
Name of worker	The name of the worker should be clearly marked (this is not strictly required by the regulation, but employment businesses may find it useful to include).
Contract type	The type of contract the worker will be engaged under. This will typically be a contract of service or apprenticeship, or a contract for services.
Identity of the employment business	The employment business will normally be the person engaging or employing the worker.
Who will pay the worker	In a standard employment business – agency worker relationship, i.e. subject to PAYE, this will be the employment business.
Rate of pay	This can either be the exact rate of pay that the worker will be given, or the minimum rate of pay that the employment business can expect to achieve for the worker (this is often expressed as at least the prevailing or current National Minimum Wage or National Living Wage).
Pay intervals	How often the worker can expect to be paid by the employment business.
Statutory deductions	A clear list and description of any deductions from the worker’s pay required by law, such as Income Tax, National Insurance, student loan, etc. Exact amounts are not required here and a simple list of statutory deductions would suffice.
Non-statutory deductions	Any non-statutory deductions that are made to the worker’s pay and how these are calculated, such as private healthcare. This must include either the amount that will be deducted or a description of the method of calculation.
Any fees for goods or services	Any fees for goods or services charged to the work-seeker, such as the cost of a DBS check. This must include either the amount that will be deducted or a description of the method of calculation. It might be useful to state whether these are one-off payments or ongoing.
Any other benefits	Any non-monetary benefits that the worker might be entitled to, such as gym membership. These do not need to be quantified in monetary terms.
Leave entitlement	Any leave entitlement that the worker would be entitled to and the details of holiday pay.

Source: Gov.uk

The Key Information Document (KID) is essential as it protects contractors and temporary workers from tax avoidance schemes, mistreatment, and unlawful deductions.

Important information

The Employment Agency Standards (EAS) Inspectorate is the government authority responsible for the enforcement of certain agency worker rights. You can raise a concern with them directly on 020 7215 5000 or through the ACAS helpline on 0300 123 1100, Monday to Friday, 8 am to 6 pm.

Disclaimer

This article is for information purposes only. We strongly recommend taking professional advice or an expert opinion before reaching any conclusion. We have a team of experts who can help you with your queries, please feel free to review them. You can also write us an email at [email protected].