No. An opt-out from the Conduct Regulations does not let a recruitment agency hold back pay for work done, and an opt-out only counts if the hirer was told about it before the contractor was supplied. The Fair Work Agency made both points in its first published case against a recruitment agency, on 4 November 2026, when five IT contractors were paid more than £59,000 that had been withheld.
The five had worked 19 days through an agency in May and complained to the Fair Work Agency's Employment Agency Compliance team that they had not been paid. The agency said payment was withheld because the five had left to work through another employment business, and that each had signed an opt-out from the Conduct of Employment Agencies and Employment Businesses Regulations 2003. The inspector asked for evidence that the hirer had been notified of the opt-outs, which regulation 32 requires before the supply. It could not be provided, so the opt-outs were not valid and the regulations continued to apply. Withholding the pay was then a breach of regulation 12, which stops an employment business holding back pay because a client has not paid, a timesheet is unsigned, or for any matter within its own control. The five were paid in full, £11,970, £9,120, £10,260, £10,602 and £17,100.
The Fair Work Agency has recovered more than £300,000 for workers since it opened in April 2026, and its Employment Tribunal Penalties team has helped secure payment in 80 cases worth £665,791.57 this financial year. Its Head of Compliance, Inspections and Tribunals said agencies should "have a very clear process in place to correctly record if a person does wish to opt out".
What to check this week is in our compliance checklist guide, updated today with the opt-out record and the withholding rule.
Source. Fair Work Agency, Recovery of £59,000 for five IT Agency Workers, gov.uk, 4 November 2026. The Conduct of Employment Agencies and Employment Businesses Regulations 2003, regulation 12 and regulation 32, legislation.gov.uk.