Can an agency refuse to pay a contractor because the client has not approved the timesheet?

Not where the contractor is in scope of the Conduct Regulations. Regulation 12 stops an employment business withholding pay for work done because the work-seeker has not produced a timesheet authenticated by the client, although the agency may satisfy itself by other means that the work was done. If the contractor's company has validly opted out, the protection does not apply to that company and the position depends on the contract.

Can the agency hold back pay because the client has not paid the invoice?

Not for an in-scope contractor. Regulation 12 also bars withholding pay because the client has not paid the agency. The agency carries that timing gap, which is why chasing the client matters on a contract desk. See pay and bill for how the two sides are tracked.

Who should approve a contractor's timesheet?

A named person at the client with authority over the budget the invoice is charged to, ideally with a named deputy for leave. Name both in the assignment schedule before the first week is worked.

Does an approved timesheet need to be kept?

Yes, with the evidence of who approved it, when and against which hours. The Conduct Regulations require records of work-seekers and clients to be kept for at least a year after the agency last provided services to them, and the record-keeping duty applies even where a company has opted out.

Glossary

Timesheet approval

Timesheet approval is the client confirming that a contractor worked the hours or days claimed for a period, usually a week. It triggers both the client invoice and the contractor's payment, so a late approval delays cash on both sides of the contract.

Written by the Vayora team. Updated 29 October 2026.

The usual cycle is weekly. The contractor submits their time, a named approver at the client approves it or raises a query, and the agency does a final check before invoicing the client and paying or self-billing the contractor. Approval can come through a portal, an emailed link, a signed paper sheet or a reply to an email. What matters later is evidence: who approved which week, when, and against which hours.

There is a legal limit on how far an agency can lean on approval. Regulation 12 of the Conduct Regulations stops an employment business withholding pay for work done because the work-seeker has not produced a timesheet authenticated by the client, though the agency may satisfy itself by other means that the work was done. The same regulation stops it withholding pay because the client has not paid. These protections apply to a limited company contractor unless their company has opted out. Terms that make client sign-off a condition of paying a contractor who is in scope are not enforceable on that point.

Here is the common failure. A contractor submits five days on Friday. The approver is on leave the following week and no deputy is named. The agency will not invoice without approval under its terms of business, and if the contractor has not opted out, it cannot refuse to pay for that reason either. It pays £2,750 on its normal cycle and waits an extra fortnight for the £3,300 it bills. Naming a deputy approver in the assignment schedule costs nothing and prevents most of these.

Other problems come from informality: approvals by forwarded email that nobody can find at audit, hours amended after approval without a fresh approval, an approver who has no authority over the budget the invoice is charged to, and whole months approved in one batch at month end.

Who approves a timesheet, and how?

The approver is a named person at the client who can say the hours were worked and who has authority over the budget the invoice is charged to. That is often the line manager, but it is not always the person who signs the purchase order, and an invoice raised against a cost centre the approver does not control is the one that gets queried at month end. Decide who it is when the assignment starts, not when the first week arrives.

The method matters less than the record it leaves. A portal approval, an emailed link, a signed sheet and a reply to an email can all work, provided each shows who approved, which week, which hours and when. A forwarded email that says "fine" with no hours attached is the weakest of the four, because nobody can later prove what the approver was looking at.

Weekly approval is the safe rhythm. A month approved in one batch at the end hides the weeks that were wrong, and by then the contractor has been paid on a cycle that did not wait for anyone. If a client insists on monthly sign-off, the agency still has to pay the contractor weekly, so the gap becomes its own cash exposure. The timesheet to invoice cycle shows where that gap sits.

What happens when the client does not approve?

This is where the law and the commercial position pull in opposite directions. The agency usually wants client approval before it invoices. Regulation 12 limits how far it can use the absence of that approval against the contractor. For a contractor who is in scope, the agency may not withhold pay for work done because the work-seeker has not produced a timesheet authenticated by the client, and it may not withhold because the client has not paid. It may satisfy itself by other means that the work was done.

What it does not stop is the agency holding its own invoice to the client until the hours are approved. So the usual position for an in-scope contractor is that the contractor is paid on the normal cycle once the agency is satisfied the hours were worked, and the agency carries the timing gap until the client approves and pays. The table sets out the common situations.

Situation	What the agency may do	What Regulation 12 says	What to record
Contractor in scope, approver away, no authenticated timesheet	Hold the client invoice until approval. Satisfy itself by other means that the hours were worked, and pay on the normal cycle.	Pay for work done cannot be withheld because the client has not authenticated the timesheet, but the agency may confirm the work another way.	Who confirmed the hours, how, and when. The submitted hours.
Contractor in scope, client has not paid the invoice	Chase the client and apply its credit control. Keep paying the contractor.	Pay cannot be withheld because the client has not paid the agency.	Invoice and due dates, the chase log, the date the contractor was paid.
Contractor's company has opted out, notice given before introduction	Agree terms that tie payment to client approval or client payment, as a matter of contract.	The regulation 12 protections no longer apply to that company.	The signed notice and its date, and the date of the introduction.
Opt-out signed after the introduction	Treat the contractor as in scope for that client and pay as for any in-scope contractor.	The notice came too late for that client, so the protections apply.	The opt-out date set against the introduction date.

What are the invoice and the self-bill built from?

Both documents come from the same approved week. The client invoice is the approved hours or days at the charge rate. The contractor's payment, usually a self-bill where a self-billing agreement is in place, is the same hours at the pay rate. The difference is the margin, which is why an amended timesheet that does not go back for fresh approval quietly corrupts three things at once: the invoice, the self-bill and the margin figure.

Take a contractor on £550 a day for a five-day week. The self-bill is £2,750 and the invoice to the client is £3,300, both before VAT. If the contractor then says the week was four and a half days, both documents change, the approver has approved a different number from the one now being billed, and the right fix is a fresh approval, not an edited invoice. See pay and bill for how the two rates are held, and what finance covers in Vayora for how the documents are raised.

What evidence should you keep?

If a client queries an invoice, or someone asks how a contractor was paid, the records that answer it are the same each time. Keep them together for each week rather than scattered across inboxes.

The hours or days the contractor submitted, and when they submitted them.
The approver's name, the date and time of approval, and the method used.
Any query raised, the client's comment and the contractor's reply.
Any amendment after approval, who made it and the fresh approval that followed.
Where the agency paid before approval, how it satisfied itself the work was done.
For a contractor whose company has opted out, the signed notice and its date.

What should the assignment schedule say about approval?

The assignment schedule is the cheapest place to remove the usual failures. Name the approver and a deputy, so one holiday does not stall a week. Say which hours count as a day, whether half days are billable and what happens to hours beyond a standard day. Say how and by when a week must be approved, and what happens if it is not.

For a contractor who is in scope, do not write a term that makes client sign-off a condition of paying them: on that point it is not enforceable, and it invites a dispute you will lose. Write down instead how the agency will satisfy itself that the hours were worked. Whether the company has opted out belongs in the contractor's own terms, and the timing of the notice is covered in the opt-out entry. Keep the records for at least a year after the agency last supplied the contractor; the wider duties are in the Conduct Regulations entry.

Common questions

Can an agency refuse to pay a contractor because the client has not approved the timesheet?: Not where the contractor is in scope of the Conduct Regulations. Regulation 12 stops an employment business withholding pay for work done because the work-seeker has not produced a timesheet authenticated by the client, although the agency may satisfy itself by other means that the work was done. If the contractor's company has validly opted out, the protection does not apply to that company and the position depends on the contract.
Can the agency hold back pay because the client has not paid the invoice?: Not for an in-scope contractor. Regulation 12 also bars withholding pay because the client has not paid the agency. The agency carries that timing gap, which is why chasing the client matters on a contract desk. See pay and bill for how the two sides are tracked.
Who should approve a contractor's timesheet?: A named person at the client with authority over the budget the invoice is charged to, ideally with a named deputy for leave. Name both in the assignment schedule before the first week is worked.
Does an approved timesheet need to be kept?: Yes, with the evidence of who approved it, when and against which hours. The Conduct Regulations require records of work-seekers and clients to be kept for at least a year after the agency last provided services to them, and the record-keeping duty applies even where a company has opted out.

How Vayora handles it

When a contractor submits a timesheet, Vayora emails the client's billing or primary contact a single-purpose approval link that opens the week's hours, without a login and without rates, with Approve and Query. A query sends the week back to the contractor with the client's comment. The agency's final approval then raises the client invoice and the contractor's self-bill together. For clients who do not approve themselves, the agency can approve a submitted week directly, and the record then carries no client approval stamp. Kit drafts a chase when a week sits unapproved, and nothing sends until a recruiter clicks Send. The full weekly cycle is in our answer on timesheet to invoice, and Finance shows approval in the product.

Timesheet to paid