“Dodgy” Umbrellas Keep Getting Away with It
The government has recently ended their consultation period with stakeholders working with umbrella companies as part of their research to follow up on their promise to form a Single Enforcement Body which will bring about much needed regulation in the umbrella industry...Now facing pressure from a few different factions of the labour market, who recognise the need to speed up the process, the Government is currently analysing the feedback they received in the consultation.
This article looks at the latest news in the journey towards regulation of the umbrella industry, which will help ensure that compliant umbrellas, such as Ship Shape, can continue to provide support to their workers.
Following the government’s call for evidence from stakeholders who have worked with umbrella companies, which closed at the end of February, there have been calls from several directions for a timeline on when to expect from the proposed Single Enforcement Body.
In this article, we look at the latest news in the SEB saga.
Call for Evidence Closes
Back in November 2021, the government issued a Call for Evidence about the umbrella company market. Requesting information from anyone who had experience of working with an umbrella company to ensure that it had an “up to date and well-informed view of how the umbrella company market operates”, the government wants to take action to tackle tax non-compliance and improve worker protection.“Workers Watchdog”
The call for evidence was the first step towards creating the Single Enforcement Body, which has been promised by the government to regulate the industry and ensure that compliant umbrella companies can continue to serve their contractors, while removing danger from dishonest brollies.In a situation much like deciding to peel off a bit of wallpaper and discovering a whole mess of much more serious problems underneath, the Single Enforcement Body has had several names since a consultation period about “establishing a single enforcement body to improve enforcement of employment rights for workers and businesses” in 2019.
Widespread Support
Compliant umbrella companies (like Ship Shape) are in complete agreement of the need to regulate our industry, but like with many things legislation related, progress is slow.The House of Lords Economic Affairs Finance Bill Sub-Committee recently published a letter to the Financial Secretary to the Treasury, laying out their observations and recommendations in light of the call for evidence.
In the letter, they requested a timescale and a better indication of what the Government intends to do with the information it has gathered and says that “the Government needs to commit to a date for bringing forward legislation to create the proposed single enforcement body to regulate umbrella companies.”
The letter also pointed out that dishonest umbrella companies who advertise false, usually tax avoidant, rates make life “very difficult” for those of us who are compliant.
The Trades Union Congress Weighs In, But Are They “Uninformed”?
A recent article in the Guardian sparked further debate when it reported that the TUC, who would like to see an outright ban on brollies, has warned that the government is not adequately protecting temporary workers, arguing that the “government’s proposals fall far short of what’s needed.” It also claimed that dishonest umbrella companies might be “let off the hook.” The article stated that TUC said that the business department’s Employment Agencies Standards Inspectorate (EASI) would be the body which were called on to regulate the industry.But as Rebecca Seeley Harris, prominent tax expert and former senior advisor to the Treasury (who was also quoted in the Guardian article) remarked on LinkedIn, the BEIS have laid claim to being the new Single Enforcement Body, not the EASI. Seeley Harris also pointed out that umbrella companies play an important role in today’s complicated labour supply chain.
