Key information documents – What are the ins, outs and must dos?

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Government legislation, which came into force in April 2020, means that new agency workers must be now issued with a what is commonly known as a Key Information Document (KID). This document contains a range of important details about how things will operate once they sign up to a contract. The reason behind for creating what should be a fairly small document (it really shouldn’t be more than two pages) is transparency. It is there to break things down into easily digestible chunks of information for the employee so that everyone knows where they stand at the start of the relationship. A good document will ensure that when the choice is made to accept a contract, it is made with reasonable levels of understanding of what the employee is signing up to. The good news is that KIDs will only apply to new employees, so there is no need to retrofit a KID to existing contracts.

As you would expect, there is a focus on pay and conditions. The document should not only explain what they will be paid but also when, and how. It should include anything that could affect the final take-home pay. Pay and conditions are often a source of contention with employees so anything that helps clarify things in advance can only be a good thing.

What must be included?

As with all legislation, it is far too complex to fully cover in one article, but as usual, there are fundamental areas that must be included that help make the purpose clearer. In this case, it is pretty much a condensing of the over conditions and contract details. So, you will certainly want to include an overview of:

  • What contract type is being agreed
  • Who is the actual employer
  • What statutory deductions and what fees or non-statutory deductions will be made. DBS check fees or private healthcare, for example, should be clearly stated as should any other deductions
  • What is the actual rate of pay or where applicable the minimum rate of pay?
  • Who will be issuing the payments and at what intervals
  • Holiday pay and any additional benefits
  • An example showing how deductions will affect the take-home pay should also be included. The best way to go about this will probably be to start with gross and remove individual deductions until the reader can see how the net figure is reached.

It’s always important to look at the ‘spirit of intent’ of these kinds of legislation because if you understand the aim of a document, it makes it all the easier to ensure you hit the mark in the content. For the KID, the real defining characteristic is clarity. If you approach it with simple language and clearly defined content in mind, you will be along the right lines. KIDs should be easily understood to ensure that you have made reasonable efforts to make the contents as clear as possible. The best way to achieve this is to simplify any jargon or technical terms and clearly state what is going to happen. Hence the focus on making sure that the reader can clearly see the net pay they can expect where they are in the labour chain. It is also important to include an explanatory introduction to ensure the reader understand the purpose of the document. A good KID will have:

  • Clear, simple language
  • Clear examples
  • Ease of understanding at the heart of the document.

HMRC have issued the usual raft of guidance and even some templates to help you get your KIDs correct and ensure you stay on the right side of legislation when it comes to documentation for new workers. There is a link below, and you really do need to go through the process of reading the details, but hopefully, this article helped to clarify things.

HMRC guidance