Reply to: Umbrella company kick back to agency

[kristen330]

Please can you help with some advice. I am working for an agency called Allen Lane who forced me to work through an umbrella company called First Umbrella. First Umbrella is charging me an extra £30 a day on top of their normal margin which they are paying back to Allen Lane. So basically I am paying Allen Lane £150 a week out of my earnings.

I spoke to another umbrella company who said this is actually illegal as the Conduct of Employment Agencies regulations say you cant charge a contractor. Please can someone confirm whether this is correct? Thank you.

It looks like the agency has closed their google page to censor the reviews. Talk about dodgy.

Just in case anyone comes across this thread and is thinking of using them, don't! What kind of company would threaten reviewers with legal action and then have a tantrum and shut down their google page so people cannot read reviews about them? Pathetic poor excuse of a recruitment agency.

If you type in google maps "len lane king street", you should still be able to see the original reviews. Not sure how long before google deletes them. The agency changed their address on google maps and their name and closed their company page down to censor the reviews.

[moggy]

You are lucky. Also this is an Allen lane thing - not the fault of the umbrella company. Allen lane give the money (your salary) to the umbrella company, and the umbrella company only can only pay what they have. How it works is allen lane give a pot of money to first and they pay you from that. What seems to have happened here is that you queried it, first umbrella decided they didn't want to be part of allen lane's dodgy scheme anymore and partake in their scam, and they told allen lane to either stop the practice or find another umbrella company. Allen lane seem to be the ones who have backed down and are now not taking their £150/wk cut, so well done. I hope the government investigates these guys. What they are doing is really bad.

The Govt would never do anything - its a contract issue at best i'd say.

The best thing for the OP do is ensure everyone knows how the umbrella act/ do business - and leave them ASAP once funds are returned.
I would also speak with the client and let them know what sort of agency they are dealing with.

I know quite a few on here feel that all agencies are bad, that's not my opinion, and i would advise getting close to some decent ones and working closer with them rather than having to deal with ones who operate with hidden margins or underhand tactics.* That is is the agency are party to this as you say.

[lucyclarityumbrella]

"Umbrella companies are not covered by the above legislation, and as such we cannot look into the issue of them deducting £150 per week. However, it may help if I provide you with some background on how umbrella companies operate. If you are employed by an umbrella company, any money paid to them by an employment business becomes the umbrella company’s income. From that they deduct any statutory deduction, such as employers NI and the Apprenticeship Levy. The remainder is then treated as your income, from which statutory deductions are made as well as any fee that they charge for processing pay."

I'm impressed that BIS actually seem to have an understanding of how an umbrella company operates, it has taken some years. I think the devil will be in the detail of the contract you have with them as to how it is structured, and at that point I think it would be a legal matetr which could cost you a fair whack

[kristen330]

It looks like First Umbrella have accepted that their kick back scheme with Allen Lane is somewhere between horrendous and illegal as they have just cancelled it and are going to pay me full rate from now on. Thanks to everyone on here for your great advice.

I am obvs happy to be getting the extra money but think there are still questions to be answered here, like why First Umbrella thought this was ok until last week and now have decided it is not. And whether this is just a short term reprieve until they come up with a new scam scheme.

But don't want to upset things now I have a £150 a week payrise. And by the time they bring in a new scheme I should be in a new contract.

You are lucky. Also this is an Allen lane thing - not the fault of the umbrella company. Allen lane give the money (your salary) to the umbrella company, and the umbrella company only can only pay what they have. How it works is allen lane give a pot of money to first and they pay you from that. What seems to have happened here is that you queried it, first umbrella decided they didn't want to be part of allen lane's dodgy scheme anymore and partake in their scam, and they told allen lane to either stop the practice or find another umbrella company. Allen lane seem to be the ones who have backed down and are now not taking their £150/wk cut, so well done. I hope the government investigates these guys. What they are doing is really bad.

[kristen330]

Here it is:



Horses mouth here: The Conduct of Employment Agencies and Employment Businesses Regulations 2003 No. 3319

This is actually a bit of a maze. The original legislation is tucked away in section 6(1) Employment Agencies Act 1973.

http://www.legislation.gov.uk/ukpga/...9730035_en.pdf



BUT HERE'S THE KICKER FOR UNSCRUPULOUS AGENCIES.

They CAN charge for other services such as CV writing, portfolio preparation, training and the like.

So be careful how you meet them or have them 'review' your CV or offer you advice.

This is an excellent translation of the regs:
http://www.bis.gov.uk/files/file24248.pdf

(PS. The TUC got it wrong, only photographic and modelling agencies are now included in the Regs, other media agencies are still out.)



Note the bold bit at the bottom..

Hi cojak,

You seem knowledgable about this issue. This is the reply I got from the dept. of business when I told them about this act.

"Umbrella companies are not covered by the above legislation, and as such we cannot look into the issue of them deducting £150 per week. However, it may help if I provide you with some background on how umbrella companies operate. If you are employed by an umbrella company, any money paid to them by an employment business becomes the umbrella company’s income. From that they deduct any statutory deduction, such as employers NI and the Apprenticeship Levy. The remainder is then treated as your income, from which statutory deductions are made as well as any fee that they charge for processing pay."

Do they have a point or are they just fobbing me off? Looks like Allen Lane have found a loop hole to rip people off in a legal way huh?

@force11 have you had any luck with your complaint? I've hit a brick wall. Trying to decide who else I can complain to.

[force11]

why wait for the contract to end?

Getting a decent rate now and don't want to upset things, ie if I threaten legal action now they may end the contract immediately. Not losing anything by waiting till the contract ends before I kick off about the dodgy deductions.

[moggy]

why wait for the contract to end?

[force11]

Thanks - I agree. When the contract ends, I will look into legal action against the umbrella for the dodgy deductions.

And then never work with First Umbrella again.

[moggy]

get the money back and then leave the brolly - vote with your feet.

[NotAllThere]

So given the fact they know its wrong and given that they (probably) haven't changed your contract will they be paying you that £30 for all the days it was illegally deducted.

You may not want to ask that question now but I would definitely keep it in the back pocket for the day after your final invoice is paid....

End of contract, treat the illegally deducted money as a debt, and then chase it. (Get legal advice first!)

[eek]

It looks like First Umbrella have accepted that their kick back scheme with Allen Lane is somewhere between horrendous and illegal as they have just cancelled it and are going to pay me full rate from now on. Thanks to everyone on here for your great advice.

I am obvs happy to be getting the extra money but think there are still questions to be answered here, like why First Umbrella thought this was ok until last week and now have decided it is not. And whether this is just a short term reprieve until they come up with a new scam scheme.

But don't want to upset things now I have a £150 a week payrise. And by the time they bring in a new scheme I should be in a new contract.

So given the fact they know its wrong and given that they (probably) haven't changed your contract will they be paying you that £30 for all the days it was illegally deducted.

You may not want to ask that question now but I would definitely keep it in the back pocket for the day after your final invoice is paid....

[force11]

It looks like First Umbrella have accepted that their kick back scheme with Allen Lane is somewhere between horrendous and illegal as they have just cancelled it and are going to pay me full rate from now on. Thanks to everyone on here for your great advice.

I am obvs happy to be getting the extra money but think there are still questions to be answered here, like why First Umbrella thought this was ok until last week and now have decided it is not. And whether this is just a short term reprieve until they come up with a new scam scheme.

But don't want to upset things now I have a £150 a week payrise. And by the time they bring in a new scheme I should be in a new contract.

[northernladuk]

I suspect that the agency's defence will be to demand that all threads referencing them be removed.

I was waiting for that one to honest. Admin must have been checking his mails hourly since the thread started

[cojak]

I suspect that the agency's defence will be to demand that all threads referencing them be removed.

[northernladuk]

I would guess that the only people to ask is the brolly - the agency can simply ask for it - it is likely to be the brolly that is making the decision to charge it on.

Absolutely. I just thought seems neither of them are coming out of this smelling of roses I thought one of them might come on and attempt a bit of defence.

Maybe admin will let us link them with anchor text in this particular instance