How to Audit your Contingent Workforce Suppliers


The risks associated with employing contingent workers have increased since the introduction of the Criminal Finances Act of 2017. The responsibility of complying with the rules now lies with the end client rather than contingent workforce suppliers. Though this may sound daunting, there are solutions to ensure your business is fully compliant and receives only the best quality contingent worker candidates. Performing an audit will guarantee that your contingent workforce suppliers are following regulations regarding any compliance issues and should also highlight any issues with the quality of candidates or time-to-hire.

Why do you need to audit your contingent workforce suppliers?

Some of the main reasons to audit your contingent workforce suppliers include compliance, quality of hires and time-to-hire. The primary risk to an organisation using contingent workers is not complying with the many rules and regulations surrounding this group. There can be severe penalties for infringing these rules in addition to any reputational damage caused.
Criminal liability can now be assigned to an ‘associated business’ if they are aware of and do nothing to prevent a tax avoidance scheme within their supply chain. This is part of HMRC’s regulation, placing the responsibility for the entire supply chain on the end user. In addition to this, there must be sufficient evidence that your suppliers comply with IR35 rules, have proven the right to work of the candidates, aren’t in breach of the Criminal Finances Act of 2017 and are adhering to GDPR regulations when it comes to any personal data belonging to the workers in question.

What should you include in your contingent supplier audit?

Despite each organisation being different and having different needs, goals and targets, there are numerous things which should be included in a contingent worker supplier audit. To help give structure to your audit, there are numerous things that need to be done before, during and after:


  • Figure out what the objectives of the audit are e.g. ensure everyone has a right to work in the UK and map out your supply chain. By knowing the main reasons for doing the audit, such as ensuring compliance, you can plan how you’re going to check and provide evidence for any regulatory issues.
  • Mapping out the supply chain is vital. This will highlight everywhere there could be potential for non-compliance or any legal issues. Make sure you include all agencies, umbrella companies and any other intermediary companies. The biggest risk is to the end client.
  • Compile a list of questions you require the answers to prior to visiting your suppliers and set a schedule for visiting all of them, so you know how much time you require and what you need to ask them.


  • Perform on-site audits at all of your suppliers, making sure that you record all findings in detail.
  • Use the detailed findings to form a report which can then be provided to all stakeholders, outlining any areas of non-compliance and provide recommendations for how to resolve them.


  • Ensure that any actions necessary to achieve compliance are given a completion date and following that date, perform checks to make sure that all of the required action was taken. Log all of this information.
  • Perform a review of the audits you’ve done so you can check if the original objectives of the audit have been met. Should any other actions be required, this is the time to highlight them and set new objectives.

Which evidence should you require?

Evidence is vital when performing a contingent workforce supplier audit – there are certain documents that are legally required to ensure your compliance and you must have evidence of these.
The documents you should focus on in your audit include the following:

Right to work

There are three methods of checking a person’s right to work in the UK. You can perform a manual right to work check (available to everyone), a right to work check using Identity Document Validation Technology (IDTV) via the services of an Identity Service Provider (IDSP) (available to British and Irish citizens only), or a Home Office online right to work check (available to non-British and non-Irish citizens). If the right to work check has been done using the services of an IDSP or using the Home Office online check, there is no requirement to see any further documents. If you are carrying out a manual right to work check, you must obtain original documents, check them, make copies and record this information securely. You will also need to securely record the date on which you performed the check.

Worker registration forms

These forms capture data such as basic personal information, bank details and any information which might help suppliers determine whether a candidate is suitable for a particular role.


Any contracts of employment should be provided to workers prior to them starting work. The contract should include payment and salary information and holiday entitlement.

Health & safety

Any risks associated with the position must be made clear, and risks and controls highlighted to the workers.

Official worker credentials

Suppliers should create records of any official qualifications, licenses or trainings that the workers have completed. These also help provide evidence of a candidate’s suitability for a role.


A worker’s payslips must be recorded – they need to show hours worked, any relevant deductions and payments made.

Working time regulations

Have workers been asked to opt in or out of the Working Time Regulations?


By following the steps outlined in this document, you can ensure that your suppliers are compliant.
This gives you the peace of mind that there will be no fines, legal challenges or reputational damage.
A Talent Works audit will ensure that the candidates you receive from your suppliers are the best available, properly managed and they’re available when you need them. Our solutions are scalable, provide full visibility into your workforce, ensure compliance and drive reductions in cost.