A commonly asked question amongst contractors, freelancers and stakeholders in the temporary staffing industry is whether or not the government regulates the umbrella company sector. The short answer is no, but two self-regulating bodies, the FCSA and Professional Passport, are doing an excellent job promoting compliance and protecting temporary works. Keep reading for more information about umbrella company regulations and a new video we’ve produced which explains more.
Video transcript: Is the umbrella company sector regulated by the government?
If you don’t have time to watch the video but want to understand what’s included, please read the transcript below.
The short answer is no – the government does not regulate the umbrella company marketplace. However, industry stakeholders have recently called for the government to take action after claims that some umbrella companies have been acting unethically. In 2022, it was reported that a leading umbrella had been unethically retaining the holiday pay of its employees, and another significant umbrella was accused of salary skimming.
While the government doesn’t regulate the umbrella company sector, there has been a recent increase in online materials released to help contractors, freelancers, and bodies within the supply chain make well-informed decisions regarding payroll. For example, if you search on Google for the phrase “Working through an umbrella company”, you will find some government guidance which explains how compliant umbrellas should operate. This information is valuable and should be read by all temporary workers before registering with an umbrella. The “Working through an umbrella company guidance” includes information about how umbrellas work, your employment rights, how you get paid, understanding how gross pay is calculated, payslips, your rights, and more.
The government provides a lot more information regarding umbrella companies. Please visit the government website and search for “umbrella companies”.
While the government doesn’t regulate the umbrella sector, it is worth mentioning that two well-respected professional bodies self-regulate the umbrella company sector: the Freelancer and Contractor Services Association (FCSA) and Professional Passport. For an umbrella company to earn accreditation from either the FCSA or Professional Passport, they must undergo a strict series of assessments and audits to prove they operate compliantly and in the very best interests of their employees. And once accreditations are awarded – umbrella companies are assessed annually to ensure they maintain the highest compliance standards.
Before choosing an umbrella company, always make sure they are compliant. We recommend that you only seek the services of an umbrella company with an FCSA or Professional Passport accreditation and carry out thorough due diligence before registering with an umbrella.
Please visit the new Umbrella Companies YouTube Channel for more umbrella company videos
We have been busy putting some videos together which answer the most commonly asked questions about umbrella companies! To see the latest videos, please visit our YouTube Channel.
Top 10 umbrella companies
Are you looking for a new umbrella company? If you are, you’ve come to the right place! We have collated a list of our top 10 umbrella companies. They’re accredited by the Freelancer and Contractor Services Association (FCSA) or Professional Passport. It’s worth noting that some of our top 10 umbrella companies have special offers at the moment that you won’t want to miss out on.
