"Clear cut" evidence suggests FCSA accredited umbrella has been "unlawfully" withholding money from contractors

“Clear cut” evidence suggests FCSA accredited umbrella has been “unlawfully” withholding money from contractors

Contractor Voice has accused an FCSA-accredited umbrella company of unlawfully retaining the pay of the contractors it has been paying. Keep reading to learn more about these allegations and the official response from the FCSA.

Orange Genie intended to “skim” money from the salaries of contractors, accordingly to Contractor Voice

Contractor Voice was originally launched to raise awareness about malpractice linked to holiday pay and umbrella company employees. However, while promoting compliance and acting as a source of vital information for contractors looking for ethical payroll services, the body has also released plenty of additional news items about malpractice within the sector. The most recent news drop is perhaps the most shocking.

In an article on the Contractor Voice website, the allegations against the FCSA-accredited umbrella company (Orange Genie) are explained, along with “clear cut” evidence that the umbrella has been “unlawfully and systematically taking money from contractors”. The content below has been taken directly from Contractor Voice, and you can read the original article by clicking here.

“Contractor Voice announces that Orange Genie, an FCSA member for over 10 years, has been unlawfully and systematically taking money from contractors, week in, week out for many years.

The evidence collected by Contractor Voice is so clear cut, demonstrating the intention of Orange Genie to skim from the salaries of its contractors, that we urge the FCSA to remove them from its list of members without delay; all contractors employed by them should find a new umbrella, and all agencies to stop working with them for the benefit of contractors.”

Contractor Voice then explains the “crux” of the malpractice. Below are six bullet points taken from Contractor Voices’ article:

  • “Contractors provided payslips to Contractor Voice for auditing
  • All payslips have been forensically audited by saferec.co.uk
  • £2 per week has been secretly deducted from every audited payslip
  • The deduction is not itemised on the payslip
  • This has been Orange Genie practice for at least 5-years
  • The total extra revenue generated by OG come to at least £4million”

Further supporting evidence is explained by Contractor Voice, and it is as follows:

“Unbeknown to contractors, £2 per week has been incorrectly deducted and disguised on the payslip in the deduction called “Employment cost, including Employer National Insurance”.

This deduction is consistently equal to the employer national insurance and a £2 additional masked deduction, which is invisible to contractors.

The FCSA code of compliance clearly requires that “the pay reconciliation you [the umbrella company} provide to the employee transparently show an itemised breakdown of all employer costs, including but not limited to the Apprenticeship Levy.” (FCSA Umbrella Employment code of compliance, A17, page 9) No doubt the aim is to give comfort to contractors that the individual elements and calculation are correct. However, none of the Orange Genie payslips that we have seen and audited include an itemised breakdown of the hidden £2 and only becomes visible following a payslip audit.

Given the scale and years of skimming, Contractor Voice believes that investigating authorities must take a very close look at the Orange Genie payroll software as it will have been impossible to skim on this scale without bespoke software involvement.

Contractor Voice continues its investigations to identify the payroll software developer, but this skim may have been purposely designed into the software algorithms so that exactly £2 can be automatically taken from every payment.

Contractor Voice has audited payslips via SafeRec.co.uk dating back from 2017 to September this year, all of which have skimmed from contractors. Orange Genie boast a contractor base in the many thousands (we estimate they have in excess of 8,000 contractors that they are payrolling each week), which if applied across the last five years suggests that the total sum of the skim could be in excess of £4million.

That is £4million that was intended to be paid to contractors. Statistically, some of the contractors would have been nurses, doctors, and healthcare professionals, who were working on the frontline during covid and treating the sick and dying. It also means that cash strapped contractors who are suffering from the current cost of living, energy and inflation crisis have also been victims to this treacherous and deliberately designed skim.”

The FCSA release a statement on LinkedIn regarding the allegations that a member has acted unlawfully

The Freelancer and Contractor Services Association (FCSA) has officially responded to the reports that a member has acted unlawfully. In a statement published on the FCSA’s LinkedIn profile, the FCSA said:

“FCSA has investigated alleged breaches of our Umbrella Code by a member. The alleged breaches cite Articles A3e and A17 of our Code, specifically a lack of clear detail contained in illustration documents, payslips and accompanying reconciliation statements.

Following our investigation into these allegations, we issued a sanction to the member concerned and required them to remedy them within seven working days of our notice to them. The member did not instigate the required remedies timeously therefore we have issued notice to terminate their FCSA membership. The member concerned has appealed this decision, as is their right under our processes, and the Independent Appeals Panel is now considering the matter.

It is FCSA policy not to name the member involved until any appeal process is complete.”

When an allegation has been made about an FCSA-accredited umbrella company, the FCSA “take action to investigate”.

The statement continued:

“Whenever we receive evidence of a breach of our Codes – whether it’s related to a new complaint by an individual or evidence provided by a third-party – we’ll take action to investigate and follow our documented procedures to ensure any issues are dealt with fairly and effectively.”

The statement continued to explain more about what the FCSA does and how it operates:

“FCSA is a not-for-profit trade association, not a regulator or statutory body. We’re also not a for-profit company with shareholders or owners expecting dividends or profits. And, just like many other trade associations, we require our members to meet certain standards.

Our members contractually commit to adhering to our Codes in the course of their business, and occasionally we receive and investigate reports that a member has breached our Codes in some way.

Unlike any other organisation in our field, we are open and transparent about our Codes and we publish them on our website at fcsa.org.uk. These Codes are reviewed and updated by us with input from tax and legal experts, other industry bodies such as REC and APSCo, government stakeholders such as BEIS and HMRC and we also consult from time-to-time with other organisations working in this field. When we have completed the review, the Codes are previewed to members for comment, and then published openly. Members are regularly assessed against these Codes. Importantly this assessment is carried out not by FCSA but by a panel of highly-regarded professional services firms – and we openly publish the panel members on our website.”

New whistleblowing hotline launched by the FCSA

If you ever suspect an umbrella company with FCSA accreditation is acting unethically or unlawfully, you can call a new dedicated whistleblowing hotline launched by the FCSA. The number you need to dial is 0203 302 5112.

Top 10 umbrella companies

If you’re looking for a new umbrella company – perhaps for the first time or because you want to find better value from a different provider – you’ve come to the right place. We have collated a list of our top 10 umbrella companies, and they’re accredited by either the FCSA or Professional Passport. Some have special offers at the moment, so please go and check them out.

Click here to see our top 10 umbrella companies!

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