Reply to: Legally, whose choice is it which Ubrella Company I work with?

[madame SasGuru]

Regulation 5 - Conduct of Employment Agencies and Employment Business Regulations 2003 - The real problem at hand (thanks to the legislator) is that although they can't force you to use their umbrella - even though it sounds like they're doing so - They're welcome to reject your umbrella if it doesn't meet their compliance. So , they may well just tell the end-client you're no longer available or something. Nevertheless, an agency can be put on the backfoot when you, as a contractor, speak up about reg.5 with some assurance. They shouldn't be treating you like this.

Actually they can the law is clear that an contractor cannot force an agency to use a particular umbrella. And while it's annoying it's actually valid, there are a lot of dodgy umbrella's around and there is a risk that using a dodgy umbrella may come back and cost the agency money.

[madame SasGuru]

First of all, legally speaking, it is entirely YOUR choice which umbrella you use. This is enforced under Reg.5 Conduct of Employment Agencies and Employment Businesses Regulations 2003 which states that 'neither an agency or employment business can require a work-seeker to use or pay for another service (i.e - an umbrella company) in order to provide work-finding services'.

True but I think you will find that suddenly no work is available and your face doesn't fit even if your mate is still working and they need 1 extra person

Also, agencies should be of the understanding that moving you to a new umbrella strips you of whatever employment rights you have accrued in the time you were with them. So, given this happens, immediately question the agency as to why they are trying to move you or just ask them to sign off the compliance of your chosen umbrella regardless. Remember, their entire business thrives on your contracting, so any smart agency will be contractor-led in the way they deal with umbrellas.

That is a niche case where the person is currently using the agency's payroll - it's not relevant if the person is getting a new contract with a new agency

As for FCSA (and other accreditors), although a bit of agency-backed research into PSLs is comforting, it tends to be the way that agencies go with FCSA on their PSLs because it legitimises the list and puts people at ease. That's what makes the FCSA such a fantastic marketing tactic. Sadly, if you type 'FCSA Corporate Governance' into Google and click on the top hit, it speaks volumes. Every board member at the FCSA works for/has shares in an FCSA-accredited umbrella, thus making money out of the market-cornering that the FCSA creates. After Julia Kermode walks, Phil Pluck is elected as the new Chief Executive and guess who votes him in? the board members. So, I agree with you fully - The FCSA is a club which, ultimately, charges the umbrellas it accredits which ends up falling to the contractors who have to pay higher fees per timesheet for an 'FCSA-Approved' Umbrella.

The FCSA is an old mates club - it only exists to act as a comfort blanket for agencies and to stop new umbrellas breaking into the cartel. And I'm not sure how accurate that is given that even the Employment Agency Regulator has published a Key Information document regarding being paid via an umbrella see Providing a 'Key information document' for agency workers: guidance for employment businesses - GOV.UK

WHEN LOOKING FOR THE RIGHT UMBRELLA - Do a companies house check, look at who the directors and shareholders are and do a little research on them too. See if they have a registered office on companies house and check out what is said about them online. It doesn't take long and these guys deal with all your pay.

That doesn't actually help you - it's actually rather hard to tell who is legitimate and who isn't - witness posters earlier this week when the 1 umbrella that seemed fine turned out to be dubious (and I have reason to believe the poster who says even the final umbrella is dodgy is correct, but not quite enough evidence to confirm just yet)

It's a big deal and, sadly enough, it's rather poorly regulated by government.

That's the only thing you've said so far that is vaguely accurate

I didn't set out intending to write an essay - Remember your rights, choose your umbrella wisely and stick by it when an agency can't be arsed to take the time to read through and sign off your umbrella's compliance. ultimately, they want you to fill their jobs so you'll use whichever umbrella you want.

As this isn't, agencies don't want hassle and if you are awkward there is likely to be a far easier candidate who came second at the interview...

[ladymuck]

First of all, legally speaking, it is entirely YOUR choice which umbrella you use. This is enforced under Reg.5 Conduct of Employment Agencies and Employment Businesses Regulations 2003 which states that 'neither an agency or employment business can require a work-seeker to use or pay for another service (i.e - an umbrella company) in order to provide work-finding services'. Also, agencies should be of the understanding that moving you to a new umbrella strips you of whatever employment rights you have accrued in the time you were with them. So, given this happens, immediately question the agency as to why they are trying to move you or just ask them to sign off the compliance of your chosen umbrella regardless. Remember, their entire business thrives on your contracting, so any smart agency will be contractor-led in the way they deal with umbrellas.

As for FCSA (and other accreditors), although a bit of agency-backed research into PSLs is comforting, it tends to be the way that agencies go with FCSA on their PSLs because it legitimises the list and puts people at ease. That's what makes the FCSA such a fantastic marketing tactic. Sadly, if you type 'FCSA Corporate Governance' into Google and click on the top hit, it speaks volumes. Every board member at the FCSA works for/has shares in an FCSA-accredited umbrella, thus making money out of the market-cornering that the FCSA creates. After Julia Kermode walks, Phil Pluck is elected as the new Chief Executive and guess who votes him in? the board members. So, I agree with you fully - The FCSA is a club which, ultimately, charges the umbrellas it accredits which ends up falling to the contractors who have to pay higher fees per timesheet for an 'FCSA-Approved' Umbrella.

WHEN LOOKING FOR THE RIGHT UMBRELLA - Do a companies house check, look at who the directors and shareholders are and do a little research on them too. See if they have a registered office on companies house and check out what is said about them online. It doesn't take long and these guys deal with all your pay. It's a big deal and, sadly enough, it's rather poorly regulated by government.

I didn't set out intending to write an essay - Remember your rights, choose your umbrella wisely and stick by it when an agency can't be arsed to take the time to read through and sign off your umbrella's compliance. ultimately, they want you to fill their jobs so you'll use whichever umbrella you want.

All good stuff but an agency can still refuse to give you work if you don't use a brolly from their PSL. You'll get something like 'another candidate was offered' or 'the role was withdrawn' as the excuse.

[webberg]

Get real guys.

The end client is the source of all the funds in the system and as such calls the shots.

If they don't like an umbrella or their trusted partner has convinced them that only certain umbrellas are legit, it's game over.

Your choice is to accept their choice, or walk.

[Jared Farr]

Legislation

Hiya

i'm in talks with an agency and have been told that unless I go with on of the three they work with they "wont take the role offer any further", it was my understanding that it wasnt legitimate for a company to dictate this as they are effectively dicatating who handles your money when there is legislation in place that puts that decision in your court, thats something I've been told before but dont know the exact legislation around that

either way if i dont pick one of their preferred umbrella companies I can kiss the job goodbye, this kinda sucks in my opinion, what happens to pension payments when moving from one umbrella to another if you have to swtich when moving jobs?

Regulation 5 - Conduct of Employment Agencies and Employment Business Regulations 2003 - The real problem at hand (thanks to the legislator) is that although they can't force you to use their umbrella - even though it sounds like they're doing so - They're welcome to reject your umbrella if it doesn't meet their compliance. So , they may well just tell the end-client you're no longer available or something. Nevertheless, an agency can be put on the backfoot when you, as a contractor, speak up about reg.5 with some assurance. They shouldn't be treating you like this.

[Harvey Williams]

Great information

After scrolling through this forum looking for relevant information regarding the FCSA and umbrella payroll, your explanation is by far the most informative. Many thanks Jared.

I'm really starting the think that using FCSA approved Umbrellas really isn't beneficial for a contractor... From personal research, I think ill be looking into the benefits provided by the payroll company to the contractor rather than relying on accreditation that was designed to corner the market anyway... and take more of my hard-earned money for this 'accreditation' as well.

[Jared Farr]

Choosing an Umbrella

Do I not need to TRUST the Umbrella company? Is there not any risk to me, regarding which umbrella company I'm employed by? If I don't know them or don't trust them to handle my emplyment, then imposing them on me seems very unfair and risky. Who will cover that risk?
Prior to this, it was my choice to deal with the employer I preferred.
And I see there are accreditors popping up, claiming to vouch for the quality of an Umbrella Company, but why should I trust the FCSA?? It's very easy to claim to be an accreditor. It's just a club.

First of all, legally speaking, it is entirely YOUR choice which umbrella you use. This is enforced under Reg.5 Conduct of Employment Agencies and Employment Businesses Regulations 2003 which states that 'neither an agency or employment business can require a work-seeker to use or pay for another service (i.e - an umbrella company) in order to provide work-finding services'. Also, agencies should be of the understanding that moving you to a new umbrella strips you of whatever employment rights you have accrued in the time you were with them. So, given this happens, immediately question the agency as to why they are trying to move you or just ask them to sign off the compliance of your chosen umbrella regardless. Remember, their entire business thrives on your contracting, so any smart agency will be contractor-led in the way they deal with umbrellas.

As for FCSA (and other accreditors), although a bit of agency-backed research into PSLs is comforting, it tends to be the way that agencies go with FCSA on their PSLs because it legitimises the list and puts people at ease. That's what makes the FCSA such a fantastic marketing tactic. Sadly, if you type 'FCSA Corporate Governance' into Google and click on the top hit, it speaks volumes. Every board member at the FCSA works for/has shares in an FCSA-accredited umbrella, thus making money out of the market-cornering that the FCSA creates. After Julia Kermode walks, Phil Pluck is elected as the new Chief Executive and guess who votes him in? the board members. So, I agree with you fully - The FCSA is a club which, ultimately, charges the umbrellas it accredits which ends up falling to the contractors who have to pay higher fees per timesheet for an 'FCSA-Approved' Umbrella.

WHEN LOOKING FOR THE RIGHT UMBRELLA - Do a companies house check, look at who the directors and shareholders are and do a little research on them too. See if they have a registered office on companies house and check out what is said about them online. It doesn't take long and these guys deal with all your pay. It's a big deal and, sadly enough, it's rather poorly regulated by government.

I didn't set out intending to write an essay - Remember your rights, choose your umbrella wisely and stick by it when an agency can't be arsed to take the time to read through and sign off your umbrella's compliance. ultimately, they want you to fill their jobs so you'll use whichever umbrella you want.

[lucyclarityumbrella]

Maybe just maybe when the government finally get their backsides into gear, the umbrella regulation may allow for a little more fair competition in the marketplace!

[eek]

Hiya

i'm in talks with an agency and have been told that unless I go with on of the three they work with they "wont take the role offer any further", it was my understanding that it wasnt legitimate for a company to dictate this as they are effectively dicatating who handles your money when there is legislation in place that puts that decision in your court, thats something I've been told before but dont know the exact legislation around that

either way if i dont pick one of their preferred umbrella companies I can kiss the job goodbye, this kinda sucks in my opinion, what happens to pension payments when moving from one umbrella to another if you have to swtich when moving jobs?

As Lucy says on multiple level it's completely unfair but agencies have the right to conduct business however they want and being frank a lot of umbrellas are actual cowboys (in multiple ways and not Lucy's lot) so it doesn't surprise me that an agency insist on you using the umbrellas on their list. And I won't fault an agency for insisting on a their way or no way approach.

* This excludes the health care agency discussed elsewhere who seem to be a front for a dodgy tax scam umbrella company.

[lucyclarityumbrella]

Hiya

i'm in talks with an agency and have been told that unless I go with on of the three they work with they "wont take the role offer any further", it was my understanding that it wasnt legitimate for a company to dictate this as they are effectively dicatating who handles your money when there is legislation in place that puts that decision in your court, thats something I've been told before but dont know the exact legislation around that

Unfortunately there is no actual legislation on this that anyone has used to challenge it. In our conversations in the past, BEIS stated that it was a commercial decision as to who the agency chooses to engage with on a business level.

[MikeL4675]

agency umbrella dictation

Hiya

i'm in talks with an agency and have been told that unless I go with on of the three they work with they "wont take the role offer any further", it was my understanding that it wasnt legitimate for a company to dictate this as they are effectively dicatating who handles your money when there is legislation in place that puts that decision in your court, thats something I've been told before but dont know the exact legislation around that

either way if i dont pick one of their preferred umbrella companies I can kiss the job goodbye, this kinda sucks in my opinion, what happens to pension payments when moving from one umbrella to another if you have to swtich when moving jobs?

[lucyclarityumbrella]

Yes, the likelihood is any of the compliant brollies are all working in the same manner. It does also assist with pension auto enrolment, if the figure was based on the full contract rate, deductions would be a lot larger than at present. It is standard practice.

I have been told that there is some legal recourse on agencies forcing contractors to use an umbrella dictated by that company, once I get confirmation I will come back to you all, as it seems to be causing a few issues.

[mjh822]

No choice

In my case its not the agency who dictates which umbrella I should use (they have a list of about 6 that they currently use) but the end client.
My client are forcing all contractors to use Giant - my last choice. The reason for their choice, we were told, was there is little or no time to do any due diligence and Gaint are the cheapest we have found !!

Sign with Giant or go is my current option.

I'm not sure about other umbrella companies but with Giant your payslip is split into basic pay and a bonus which is OK since you end up with the same money in your pocket at the end of day. However, the bonus is discretionary and doesn't form part of any contractual agreement.

So in other words Giant are only contractually obliged to pay you National Minimum Wage (for 366 hours a year). I'm sure they will also forward the full amount (minus NIC and TAX) from the agency to me, but contractually they don't have to. Should I have an issue with this?

The way I see it is that Giant are taking all the possible risks associated with being an employer and pasting them onto me.

Is this the way all umbrella companies work?

[lucyclarityumbrella]

Now I know you don't want to hear this but there do seem to be a lot of fully PAYE compliant umbrellas (for want of a better means of differentiating between umbrellas and tax avoidance outfits) currently offering to support Expense claims and SDS appeals to attract customers.

Always happy to hear and I do get it, but there are also many umbrella's operating compliantly who can now not get a look in as the PSLs are closed off!

[eek]

I think that is the key, the agencies are simply relying on the audit with no actual due diligence over and above that from what I have seen.

My statement was "As an agent....." for good reason because of the previous sentence - as an agent you don't want an umbrella firm causing problems running deemed payments attached to SDS appeals is just going to cause pain for the agency and end clients.. Hence you may well adopt a rule of this list of umbrellas and no one else..

Now I know you don't want to hear this but there do seem to be a lot of fully PAYE compliant umbrellas (for want of a better means of differentiating between umbrellas and tax avoidance outfits) currently offering to support Expense claims and SDS appeals to attract customers. This may be because they don't fully understand the new world, it could be just doing whatever is necessary for their month end bonus..