The Swedish Derogation Model – What It Was and Why It Was Removed

What was the Swedish Derogation model?

The Swedish Derogation (officially called “Regulation 10 of the Agency Worker Regulations 2010”) was an optional arrangement that allowed employment businesses to avoid equal pay after 12 weeks under the AWR.

Under this model, the worker was given a permanent employment contract with the agency (or sometimes an umbrella) and received pay between assignments, typically at a lower guaranteed rate than their normal assignment rate.

In return, the agency didn’t have to match the worker’s pay to that of permanent staff at the client after 12 weeks.

Why it was removed

The Government found that the model was being widely misused, with many workers unaware they had opted into it or receiving little or no pay between assignments.

To strengthen fairness and transparency, Regulation 10 was repealed on 6 April 2020 as part of the Agency Workers (Amendment) Regulations 2019.

Since then, all agency and umbrella workers are entitled to equal pay after 12 weeks, provided they remain in the same role with the same hirer.

What this means for you now

• If you work through an umbrella company today, the Swedish Derogation model no longer applies.
• You’re entitled to the same pay and conditions as a comparable permanent employee once you’ve completed 12 weeks in the same role.
• You should not be asked to sign any clause referring to “Regulation 10”, “Swedish Derogation”, or “Pay Between Assignments”.

If your contract still contains this language, ask your umbrella or agency to confirm it’s obsolete and not in effect.

Why keeping this page matters

Although the model no longer exists, many older online guides and forums still reference it. We’ve kept this page to help contractors understand the history and to reassure you that today’s regulations are much simpler and fairer.

Need help or have questions?

If you’re unsure whether your contract wording is up to date, or want to confirm your rights under the current Agency Worker Regulations, our compliance team is happy to help.