Conduct of Employment Agencies and Employment Businesses Regulations 2003: a recruiter's guide

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (SI 2003/3319) are the core rulebook for UK recruitment firms in England, Wales and Scotland. Made under the Employment Agencies Act 1973, they bar fees to candidates for finding work, require written terms and, for temp supply, a Key Information Document before work-finding starts, set the checks an agency must make on candidates and clients, and limit temp-to-perm transfer fees. As of October 2026 they are enforced by the Fair Work Agency, the regulator created under the Employment Rights Act 2025, whose officers the Regulations have named since 7 April 2026.

Our other agency pages are about the US: state agency licensing and the 52 state license guides, the placement fee agreement template and temp-to-perm conversion fees. The UK has no general licence for recruitment agencies; it has these conduct rules instead. All quotations below are from the text on legislation.gov.uk.

Is my firm an "employment agency" or an "employment business"?

The 1973 Act draws the line that the whole rulebook depends on (section 13):

• An employment agency provides services "for the purpose of finding persons employment with employers or of supplying employers with persons for employment by them". In recruiter terms: permanent and direct-hire placement, where the candidate becomes the client's employee.
• An employment business participates in "employment arrangements", under which people are supplied "to act for, and under the control of, another person". In recruiter terms: temporary and contract supply. The Employment Rights Act 2025 widened this definition from 6 January 2026 for specified purposes, so that employing or paying supplied workers counts as participating.

Many firms are both, and some duties differ between the two, so tag each desk and each placement accordingly.

Can an agency charge candidates?

Section 6 of the 1973 Act makes it an offence, punishable by a fine, to request or receive a fee from a person for finding or seeking to find them work, except in cases the Secretary of State prescribes (the 2003 Regulations allow some fees for entertainment and modelling work). Around that core ban:

• Regulation 5: work-finding cannot be made conditional on buying other services or goods, and a work-seeker can cancel paid services on five business days' notice, or ten for accommodation, without penalty.
• Regulation 13: the first time an agency offers services, it must say whether any of them carry a fee, how much, who is paid and the refund terms.
• GOV.UK's fees guidance gives CV writing, training and transport as examples of services that may be charged for.

What must be agreed with candidates before work-finding starts?

Terms with work-seekers

Before first providing work-finding services, an employment business must obtain the work-seeker's agreement to written terms (regulation 14), given together in one document where possible, and cannot vary them without agreement. Under regulation 15 the terms must include: whether the worker is employed under a contract of service or a contract for services; "an undertaking that the employment business will pay the work-seeker in respect of work done by him, whether or not it is paid by the hirer"; notice periods; the pay rate or the minimum rate it reasonably expects to achieve; pay intervals; and holiday entitlement and pay. Regulation 16 sets equivalent terms for agencies that are permitted to charge a fee.

The Key Information Document

Since 6 April 2020, regulation 13A has required an employment business to hand over a Key Information Document before obtaining agreement to terms. It must be a separate document headed "Key Information Document" and include:

• the type of contract and the identity of the employment business, and of whoever will normally pay the worker if different (for example an umbrella company);
• the pay rate, or the minimum rate the business reasonably expects to achieve, and pay intervals;
• deductions required by law, any other costs and deductions, and any fees for goods or services, with amounts or how they are calculated;
• non-monetary benefits and holiday entitlement and pay;
• a representative example statement showing, for one pay period, gross pay, each deduction and fee, and net pay;
• contact details for the enforcement officers, now those appointed under the Employment Rights Act 2025.

If any of those details change after terms are agreed, a revised document is due within five business days (regulation 13A(15)).

What checks must an agency make on the client and the candidate?

The two-reference rule in regulation 22 is the one UK healthcare and education desks most often fail on audit. Our reference check template and the DBS checks guide cover the practical side of those checks.

How do temp-to-perm transfer fees work in the UK?

Regulation 10 controls what an employment business can charge when its temp is taken on by the hirer (or supplied through another business):

1. A transfer fee term is unenforceable unless the contract lets the hirer choose, by notice, an extended period of hire instead of paying the fee, on terms no less favourable than before. If the business then fails to supply the worker for that period, the fee term is unenforceable unless the business was in no way at fault.
2. Even with that option, the fee cannot be enforced if the worker starts with the hirer after the "relevant period": the later of 8 weeks from the day after the worker last worked for the hirer through the business, or 14 weeks from the first day of the supply. Supply before a gap of more than 42 days is ignored when finding that first day.
3. A hirer that pays under an unenforceable term can recover the money (regulation 31(2)).

Example (illustrative only): a temp starts on 1 March and last works through the business on 30 April. The 14-week period from 1 March ends on 6 June; the 8-week period from 1 May ends on 25 June. The later date, 25 June, is the last day a hire by the client can still trigger the fee.

What else does the rulebook prohibit?

• Penalising workers who leave (regulation 6): no detriment for ending the contract or taking work elsewhere, and no requirement to name a future employer. Losing benefits, recovering losses for work not performed, and reasonable notice periods are allowed.
• Supplying temps to cover strikers (regulation 7): an employment business must not supply a worker to do the duties of someone taking part in official industrial action, or of a worker reassigned to cover them, unless it does not know and has no reasonable grounds to know of the action.
• Withholding pay (regulation 12): not because the hirer has not paid, the worker lacks a hirer-signed timesheet (other proof may be used), or for any matter within the business's control.
• Advertising (regulation 27): every advert must give the firm's full name and say whether each job is temporary or permanent; adverts must relate to real positions the firm is authorised to fill; an advert that states pay must give the nature of the work, location and minimum experience or qualifications for that pay.
• Sharing candidate data (regulation 28): no disclosure without the work-seeker's prior consent, except for work-finding, legal proceedings or their professional body, and never to their current employer without consent.

Can a limited company contractor opt out?

Yes. Under regulation 32(9), where the work-seeker is a company, most of the Regulations do not apply if the company and the individual it supplies agree that they should not, notify the agency or employment business before introduction or supply, and the firm tells the hirer. The individual can withdraw the notice (taking effect when the current position ends); the opt-out cannot be made a condition of work-finding; and it is not available where the individual will work with or attend vulnerable persons. The Key Information Document and records duties still reach company work-seekers in some cases (regulation 32(9), referring to regulations 13A(18) and 29(7)).

What records must be kept, and who enforces the rules?

Regulation 29 requires records sufficient to show compliance, including the particulars in Schedules 4 and 5 for each work-seeker and hirer application acted on, kept for at least one year from creation or from the last services provided, and deliverable within two business days of an enforcement request. Electronic records are fine.

Enforcement now sits with the Fair Work Agency, which lists "regulating employment agencies and businesses in England, Scotland and Wales" among its functions. Breaching the Regulations is a criminal offence punishable by a fine (section 5 of the 1973 Act); an employment tribunal can make a prohibition order banning a person from running an agency for up to ten years (section 3A); and a breach that causes damage is actionable in civil courts (regulation 30).

The Conduct Regulations sit alongside the equal-treatment rules for temps covered in the Agency Workers Regulations guide. For data handling on the same candidates, see the GDPR checklist for recruiters.