Make Work Pay and make good decisions – agencies, AI and the law

April 17th, 2026 | Industry News

The Government’s Make Work Pay consultation closes on 30 April 2026. Its aim is to modernise the agency regulatory framework. Recruitment agencies, workers and industry stakeholders all get to contribute to the future of the temporary labour market.

Current proposals may significantly change how agencies engage and pay their workers. For example:

1. agencies may need to offer workers multiple engagement options rather than operating a single model, calling on recruitment software UK wide to support such offers
2. provide in house agency payroll
3. adapt internal compliance processes
4. offer greater job security to temporary workers.

Is your agency at risk under GDPR

Alongside this potential change to agency function, a recent Information Commissioner’s Office (ICO) report highlights significant concerns around automated decision making, in relation to GDPR and Data Act legislation.  “Our key finding is that employers must more thoroughly assess the level of meaningful human involvement in their processes,” says the report.

What does this mean? Candidate database software is often seen as a resource, rather than a process – an inert system that recruiters call on, but the ICO suggested that automated recruitment tools are making decisions ‘without meaningful human involvement’(automated decision making or ADM) and that could have significant implications.

Recruitment software for small agencies can sometimes be purchased on a basis of cost, or ease of use, without anybody having a clear idea about the governance impacts. One key finding of the report is that agencies may need to improve transparency around ADM so candidates fully understand where and if solely automated decisions are happening in recruitment. Similarly, where agencies have significant human involvement in their recruitment processes, they have to ensure it’s applied consistently to all candidates within a hiring stage to ensure fair treatment and compliance. The concern hinges around an agency’s ability to asses the difference between decision support and ADM. Under UK data protection law, a decision may count as automated decision-making where it is based solely on automated processing and has legal or similarly significant effects on an individual.

Let’s take an example, Agency A is using recruitment CRM for agencies to filter candidates based on criteria supplied by the client company. Is this ADM?

No. A decision at this point is not wholly automated, because a recruiter might still step in with a paper CV or to include a known candidate who doesn’t meet the criteria but who has significant experience with the client. However, transparency around this process is necessary under UK GDPR and could be included in information supplied to the candidates or on the recruitment agency website.

This is a good time for agencies to review their GDPR guidelines and assess the way that they may be using ADM in their recruiting, and the best recruitment software UK offers transparent systems and processes that makes it easy for agencies to ensure they are legally compliant and operating on a basis of fairness and inclusion.