Umbrella found guilty of deducting ERNI & AL

[SimonMac]

...and that is also illegal under the existing law. You have to advertise the rate for the role payable to the worker, not an artificially inflated one to make the role more attractive. This is what Chaplin calls the Smurf Rate, attractive but non-existent.

Of course that rate may well be 30% under market, which has the same effect except you risk not seeing good people applying, but that's the client's decision.

The advertised rate has nothing to do with it, its all about the rate in the contract, which for the contractor is between them and the brolly, what the agent pays the brolly is of little or no relevance, taking brollys out of the equation we all know of examples of an agent saying "sorry the rate has come down £50 a day since interview"

[Old Greg]

I suppose the agency should advertise as "X less applicable taxes" and that could be enough fluff to make it legal.

The mess comes about in part because the agency is advertising for a worker but intends to contract with the brolly company. The advert should say something like "£400 pd to be paid to supplying company" but it's cumbersome. Really, the agency should just put the worker on their books for PAYE as Hays would with a temp. Smaller agencies could buy in services from a brolly.

[malvolio]

The advertised rate has nothing to do with it, its all about the rate in the contract, which for the contractor is between them and the brolly, what the agent pays the brolly is of little or no relevance, taking brollys out of the equation we all know of examples of an agent saying "sorry the rate has come down £50 a day since interview"

So it's fine to offer something for £500 when you know full well you will only ever pay £350... Fair enough.

People who can afford it will walk away. Most won't. The role will still be filled by someone who can't afford to walk.

[Anonimouse]

I still don’t understand why contractor is liable for AL, they don’t turnover enough to qualify. The agency/umbrella on whose turnover the percentage is based should pay.

[Anonimouse]

The mess comes about in part because the agency is advertising for a worker but intends to contract with the brolly company. The advert should say something like "£400 pd to be paid to supplying company" but it's cumbersome. Really, the agency should just put the worker on their books for PAYE as Hays would with a temp. Smaller agencies could buy in services from a brolly.

Hays are a bunch of crooks, client pays for triple time for bank holiday if worked, standard rate if not, contractor doesn’t see it, hays have pocketed it.

[mjcp]

Hays are a bunch of crooks, client pays for triple time for bank holiday if worked, standard rate if not, contractor doesn’t see it, hays have pocketed it.

On the flip side, I put a time sheet in on Friday/signed off, got paid on Tuesday (PSC). Best system I've worked under! (never did any Out of hours, so didn't notice / miss the fiddle you mention)

There are up sides to "global hyper mega corp"

M

[Old Greg]

On the flip side, I put a time sheet in on Friday/signed off, got paid on Tuesday (PSC). Best system I've worked under! (never did any Out of hours, so didn't notice / miss the fiddle you mention)

There are up sides to "global hyper mega corp"

M

I worked through Hays and they were taking a 4.7% margin with the same excellent payment terms and administration you describe. Super-sweet.

[VelcroPower]

I still don’t understand why contractor is liable for AL, they don’t turnover enough to qualify. The agency/umbrella on whose turnover the percentage is based should pay.

When you engage with an Umbrella Company you're basically signing up as an employee to receive NMW + Commission.

How that commission is made up is usually as a result of getting the invoice value for the work and then deducting the costs that the Umbrella incurs employing that individual and their margin.

Those costs for the Umbrella will include Employer's NI, Apprentice Levy and any Employer Pension contributions. Because the Umbrella company invoices for the work it's the Umbrella company's money so they can divvy that up pretty much however they want to arrive at the figure that is Gross Pay. Gross pay is the NMW they have to pay and then whatever is left from the invoice after deducting all those Umbrella costs is the commission.

i.e If the government brought in a new payroll tax of 10% per run for companies with £5m+ turnover for Coronavirus - that would get passed on to the umbrella contractors because that then becomes a cost of employing them. The individual contractor wouldn't be anywhere near those limits but as an employee of the umbrella company they are generating those costs that will have to be covered somewhere.

[eatenrifles]

Judgement here
Mr P Weldon v 6CATS UK Ltd: 2410288/2019 - GOV.UK

But it doesn't detail any of the facts of the case. It would be nice to know the exact circumstances.

Employment Tribunals Rules of Procedure 2013 – Rule 21

Under rule 21 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (SI 2013/1237), if no response has been presented to the employment tribunal within the relevant time limit, an employment judge may issue a judgement on the information available, or may decide to hold a hearing.

Looks like the brolly didn't contest the claim so it was automatically awarded to the contractor. Not sure this is the legal landmark it's being made out as.

[NotAllThere]

Hays are a bunch of crooks, client pays for triple time for bank holiday if worked, standard rate if not, contractor doesn’t see it, hays have pocketed it.

Not when I worked through them.