Access Group: Protecting Your Recruitment Agency Through Legal and Regulatory Change

Legal and Regulatory Changes Reshaping Recruitment

2025 has brought a wave of legislative updates that directly impact recruitment agencies. The Employment Rights Bill, set to receive Royal Assent this autumn, introduces 28 reforms aimed at strengthening worker protections. Key changes are set to include:

• Unfair dismissal rights from day one of employment
• Ban on zero-hours contracts requiring predictable hours for all workers
• Restrictions on fire-and-rehire practices
• Expanded family-friendly rights and flexible working entitlements
• Creation of the Fair Work Agency to enforce compliance

These reforms will roll out in phases through 2026 and beyond, meaning agencies must prepare now to avoid future penalties.

Meanwhile, IR35 remains firmly in place. Although some thresholds have shifted, putting more contractors back in charge of determining their own status, the core off-payroll rules still apply. Agencies must continue to show “reasonable care” in assessments and maintain robust audit trails.

The Rise of AI - and the Risks of Misuse

AI is transforming recruitment, from CV parsing to candidate engagement. But with great power comes great responsibility. Using tools like OpenAI’s ChatGPT to analyse CRM data may seem efficient, but it poses serious data privacy risks. Have you checked whether your recruiters are uploading sensitive client or candidate data to public AI platforms - effectively sharing it with the open web and potentially breaching GDPR and other data protection laws?

The Information Commissioner’s Office (ICO) has issued clear guidance: recruiters must conduct Data Protection Impact Assessments (DPIAs) before using AI tools, define lawful bases for processing, and ensure transparency with candidates.

Recruitment Technology That Keeps You Compliant

Technology should be your ally in compliance, not a liability. Look for SaaS solutions that evolve in line with legal and regulatory changes. Whether it’s onboarding, screening, or pay and bill software, tools need to be designed with in-built security to give you peace of mind.

Key Tools That Support Compliance:

• Dynamic background check screening tools: Add new checks - like social media screening - as regulations evolve. These checks are becoming essential, especially in safeguarding roles. But they must be conducted transparently, with candidate consent and in line with GDPR.
• Onboarding solutions: With new “not hire and fire” laws, getting the right candidate into role is more important than ever. Onboarding tools can help you ensure candidates are properly vetted and supported from day one.
• AI-powered regulatory insights: Look for software that provides instant access to updated compliance information. Access Evo allows you to ask questions in plain English and get answers without leaving your workflows.
• Integrated pay & bill systems: Stay ahead of changes like Making Tax Digital and joint liability for PAYE. Manage payroll, invoicing, and HMRC reporting seamlessly with integrated solutions.

Why Compliance Is a Competitive Advantage

Compliance isn’t just about avoiding fines - it’s about building trust. Clients expect recruiters to be strategic partners. Demonstrating your commitment to legal and ethical hiring practices can set you apart in a crowded market.

Our data shows that great onboarding boosts candidate retention, improves client satisfaction, and enhances an agency’s reputation. Automating your screening allows you to deliver a seamless, compliant experience that keeps both candidates and clients confident in your process.

Final Thoughts: Future-Proofing Your Agency

The recruitment industry is facing unprecedented change. From employment law reforms to AI disruption, agencies must be agile, informed, and equipped with technology to help them stay compliant. The right software will help with the heavy-lifting, allowing you to focus on growing your business.

Access Evo, featuring Copilot, with three-tier security, ensures your data stays protected while you harness the power of AI. Our platform lets you query regulatory updates using natural language - without ever leaving your CRM or compromising sensitive information. Plus, you can set permissions-based access according to user roles, so that people only see what data they should within the business.

Learn more about Access Evo for recruitment