Employment Agencies and EAS Compliance

What you need to know for EAS Compliance

What is EAS/BEIS?

EAS enforcement changes have meant that tuition business working with multiple tutors fall under the category of employment businesses. Agencies must update their contracts, policies, and processes accordingly for EAS Compliance.

If you’ve missed this, or your not sure of the details, you can read more on the very helpful Law Hound blogs.

EAS stands for Employment Agencies Standards.

BEIS is the Government Department for Business, Energy & Industrial Strategy.

In 2021 they published expectations of tutor agencies employing tutors to comply with one of two specific business models in order to ensure that contracted tutors were being treated fairly.

The two business models for EAS compliance are:

Tutor Employment Agency
Tutor Employment Business

This caused a lot of concern amongst agency owners (myself included). While we were already treating their team fairly, we had to navigate legal jargon to learn what was required for EAS compliance, or potentially close our doors. Legal documents have a tendency to make my eyes water!

With some investigation, team work, and a lot of support from Law Hound we were able to navigate the changes to EAS compliance with minimal disruption.

For the majority of businesses this doesn’t mean much change, but perhaps more specific documentation to be prepared for inspections.

But understandably, with anything legal, it is a conversation that can inspire anxiety.

The resources from this page are designed to help you relieve that anxiety, and seek further support if you need it.

What are the model requirements for EAS compliance?

Tutor Employment Agency

Tutor employment agencies collect a fee for connecting a tutor with a client. They can not charge tutors for providing them with work, and they can not collect payment from the client on behalf of the tutor.

For tutor agencies wishing to work by this model, TutorCruncher set up Stripe Connect accounts to allow them to invoice the client and split the payment at the point of collection. Payments are sent directly to the tutor from TutorCruncher and the agency remains compliant.

You do not have to use TutorCruncher to be compliant, but you must not set up a Stripe Connect account yourself as you would still be managing the payment to the tutor in this case.

You can find more information about employment agency requirements on the Government website linked below.

https://www.gov.uk/employment-agencies-and-businesses

Tutor Employment Business

Tutor employment businesses employ their tutors and give them the associated employment benefits.

The tutors can be self-employed under this model, but in this case the agency can not direct them in how to deliver the tuition.

You can provide training, resources, and software, and filter applicants before employment. But self-employed tutors must be allowed to self-manage.

By this model you can collect payment on behalf of the tutors. Tutors must invoice you for payment and this must be documented.

Frequently asked questions

I don't tutor in the UK. Does this apply to me?

This legislation applies to the UK Government, so is not applicable if you work entirely outside of the UK. If you employ tutors in the UK, you will need to ensure that you are compliant with UK Employment Law.

Does this apply to me if I am under the VAT threshold?

Yes, the enforcement is related to collecting payment on behalf of other tutors. Your income threshold doesn’t impact this.

Am I covered if I use Tutorcruncher?

TutorCruncher very quickly responded to the changes by introducing a Stripe Connect integration to allow the payments from clients to be split at the point of payment, meaning that tutor agencies could be compliant. You still need to make sure that the agreements and processes you have with tutors are compliant.

Does this apply to referrals between tutors?

This doesn’t apply if you are not taking payment for referrals. You can still keep helping out your colleagues and I’m sure it will be welcomed 😊

Do I have to pay VAT on the fee I collect to pay tutors?

Yes. You will need to pay VAT on your entire revenue if this is over the VAT threshold. This cost has resulted in many businesses having to change their business model in order to remain affordable. I would recommend speaking with your accountant if you think this applies to you. There may be a more cost effective model for you.