In the wake of a damning report into the conduct of non-compliant umbrella companies and some employment agencies within the UK self-employed supply chain, the Government has vowed to set up a dedicated body to address the needs of vulnerable workers.
The report, authored by the Loan Charge All-Party Parliamentary Group (APPG), compared the UK’s contracting sector to the wild west, citing non-compliant umbrella companies, disguised remuneration schemes and the allegedly widespread practice of employment agencies taking “kickback payments” from umbrellas in order to recommend them to their contractors.
Responding, a spokesperson said that it was a priority of the government to both protect and enhance workers’ rights, including the rights of those working through umbrella companies, via legislation.
The spokesperson said that, while the government had taken steps to improve the information those working for agencies receive about their terms and rates, it had also committed to setting up an enforcement body which would provide additional protection for “vulnerable workers”.
Regarding the claims surrounding “kickback payments”, the spokesperson said that the government would seek to expand the power of inspectors to look into complaints relating to umbrella companies and empower officials to take enforcement action where appropriate.
The spokesperson clarified that such action would be needed in situations where contractors working for umbrella companies were not receiving their adequate pay. According to the government, this will not only protect vulnerable workers, but will also make sure compliant employers don’t suffer from unfair competition.
The government also sought to quell any misgivings contractors might have about using umbrella companies or employment agencies, saying that there is no reason not to use fully compliant companies and that those who are non-compliant can generally be spotted fairly easily.
Author: Steven English