I'm getting paid minimum wage...

[LisaContractorUmbrella]

This minimum wage shenanigans is because some (most?) umbrellas have adopted the ‘AWR (Agency Worker Regulations) Swedish Derogation’ model since last October. You should still get the same cash at the same frequency..

Example:
200 day rate = 1000/week
After PAYE, NIs, umbrella fee deduced = approx 500/week net (I’m guessing !)

Before AWR: pay slip shows £500
After AWR: pay slip shows minimum wage (e.g. £280) + ‘bonus’ (e.g. £220)

You’re a full time, not temporary, employee of the umbrella company. You ARE on the same salary as a burger flipper but unlike the McNugget crowd you get a fat bonus each time you’re paid.

Q. Why are umbrellas doing this?
A. ‘Agency workers regulations’ were introduced by the EU last October giving temporary workers the same rights as permanent workers after 12 weeks. Umbrellas don’t want to give you these rights so they’re using an ‘opt out’ called the Swedish Derogation which means that you’re a full time (not temporary) employee of the umbrella and consequently they must ‘pay’ you between assignments. As your wage is the minimum wage, this is all they’ve gotta pay between assignments. They can give you the boot (P45) after making 4 weeks worth of between assignment payments.

Some umbrellas pay the ‘between assignments’ pay (derogation pay) in advance whilst you’re working.

DANGERS/CONCERNS TO WATCH OUT FOR: Umbrellas paying bonus late, umbrellas taking large fees, mortgage applications (what’s you’re salary sir?) !

Also...

AWR Swedish derogation has been adopted in other industries but some genuinely minimum wage only workers are getting badly fleeced by it..

http://www.unitetheunion.org/PDF/Act...egulations.pdf

HMRC/government may be taking another look at it soon.

Most of what you say is incorrect. Umbrella companies have based their employment contracts on minimum wage and bonuses for the last 4-5 years - way before the introduction of the AWR. The reason for this is that umbrella companies have to operate an overarching contract of employment and this requires, to be legally effective, mutuality of obligation and HMRC have determined that this will be represented by pay between assignments - please see Sir Christopher Slades comments here: Case Law: Clark v Oxfordshire Health Authority. This type of contract is required to create a series of temporary assignments under a permanent contract of employment as this is an accurate representation of the role of contractor.

The Swedish Derogation Model, as it became known, was being operated by all umbrella companies for many years and still should be in order for the overarching contract to be maintained. No umbrella company should be making deductions from the contractor for payment between assignments and neither should they be making those payments 'in advance', that completely goes against the spirit of the legislation.

Contractors will not be 'fleeced' by a reputable umbrella company. You need to bear in mind that there is one pot of money - to use your example £1000 per week. From this amount the following payments must be made:
Net pay to the contractor
Income tax to HMR&C
Employee's NI to HMR&C
Employer's NI to HMR&C

The balance (usually £80-£100 per month) is the income of the umbrella company - otherwise known as their margin.

HTH

[SunnyInHades]

This minimum wage shenanigans is because some (most?) umbrellas have adopted the ‘AWR (Agency Worker Regulations) Swedish Derogation’ model since last October. You should still get the same cash at the same frequency..

Example:
200 day rate = 1000/week
After PAYE, NIs, umbrella fee deduced = approx 500/week net (I’m guessing !)

Before AWR: pay slip shows £500
After AWR: pay slip shows minimum wage (e.g. £280) + ‘bonus’ (e.g. £220)

You’re a full time, not temporary, employee of the umbrella company. You ARE on the same salary as a burger flipper but unlike the McNugget crowd you get a fat bonus each time you’re paid.

Q. Why are umbrellas doing this?
A. ‘Agency workers regulations’ were introduced by the EU last October giving temporary workers the same rights as permanent workers after 12 weeks. Umbrellas don’t want to give you these rights so they’re using an ‘opt out’ called the Swedish Derogation which means that you’re a full time (not temporary) employee of the umbrella and consequently they must ‘pay’ you between assignments. As your wage is the minimum wage, this is all they’ve gotta pay between assignments. They can give you the boot (P45) after making 4 weeks worth of between assignment payments.

Some umbrellas pay the ‘between assignments’ pay (derogation pay) in advance whilst you’re working.

DANGERS/CONCERNS TO WATCH OUT FOR: Umbrellas paying bonus late, umbrellas taking large fees, mortgage applications (what’s you’re salary sir?) !

Also...

AWR Swedish derogation has been adopted in other industries but some genuinely minimum wage only workers are getting badly fleeced by it..

http://www.unitetheunion.org/PDF/Act...egulations.pdf

HMRC/government may be taking another look at it soon.

[LisaContractorUmbrella]

Thanks so much for your reply I was getting a little bit worried for a minute!

I will contact my company now, the reason I didnt contact them initially was just incase there was something dodgy going on I knew they would feed me some technical jargon designed to confuse me over the phone. But now I know its all above board I will get onto them

Thanks again!

You're welcome - nice to know you'll be contracting and not burger flipping

[BrilloPad]

Have you chatted to the umbrella? What did they say?

BTW if you are on min wage you might as well get a Mcjob! Mines with large fries please....

[jimmyb99]

Thanks so much for your reply I was getting a little bit worried for a minute!

I will contact my company now, the reason I didnt contact them initially was just incase there was something dodgy going on I knew they would feed me some technical jargon designed to confuse me over the phone. But now I know its all above board I will get onto them

Thanks again!

[LisaContractorUmbrella]

Hi guys,

First time user of an umbrella company over here and I am confused!

I went to a job interview and got a job (yay!) then was told I either had to set up my own limited company or use the umbrella company they recommended. I chose the umbrella company with the intention to go limited down the line.

However I am now starting my job next week and I have just been sent a notice which contained this clause:

As per clause 5 of your Terms and Conditions of Employment when working on assignments your remuneration will be paid at the assignment rate. The assignment rate will be the national minimum wage in addition to which you may be eligible from time to time to a bonus.

Clause 5 of my contract effectively says the same thing as above.

As a first timer I am very confused, I was led to believe that I was on a day rate of 200GBP but now i am being told I am getting paid minimum wage...

Im unsure of what to make of this as I cant believe that they would be taking nearly 150GBP out of my packet every day and just giving me the bare minimum.

I have assumed (possibly incorrectly) that this is what umbrella companies do and in the end I will get the bulk of my pay and that they do this to ensure maximum tax is saved.

However as I said I am completely new to all of this and really would like some answers from people in the know (thus I found this forum!)

Is this normal? What could/should I do?

Thanks for listening
Jim

Congratulations on the new contract Jim. Firstly, don't panic! All umbrella companies will have a similar clause in their contracts but it doesn't mean that you will only get paid minimum wage, it means that you would receive a min wage payment from the umbrella company if they were not paid in the month by the agency/end client. Umbrella companies are employers and they are obliged to operate under an overarching contract of employment which has to have a required mutuality of obligation i.e. regular salary payments. It's quite a complicated subject but your umbrella company should be able to explain the legalities behind it

HTH

[jimmyb99]

Hi guys,

First time user of an umbrella company over here and I am confused!

I went to a job interview and got a job (yay!) then was told I either had to set up my own limited company or use the umbrella company they recommended. I chose the umbrella company with the intention to go limited down the line.

However I am now starting my job next week and I have just been sent a notice which contained this clause:

As per clause 5 of your Terms and Conditions of Employment when working on assignments your remuneration will be paid at the assignment rate. The assignment rate will be the national minimum wage in addition to which you may be eligible from time to time to a bonus.

Clause 5 of my contract effectively says the same thing as above.

As a first timer I am very confused, I was led to believe that I was on a day rate of 200GBP but now i am being told I am getting paid minimum wage...

Im unsure of what to make of this as I cant believe that they would be taking nearly 150GBP out of my packet every day and just giving me the bare minimum.

I have assumed (possibly incorrectly) that this is what umbrella companies do and in the end I will get the bulk of my pay and that they do this to ensure maximum tax is saved.

However as I said I am completely new to all of this and really would like some answers from people in the know (thus I found this forum!)

Is this normal? What could/should I do?

Thanks for listening
Jim