On the back of fresh allegations that another of the UK’s leading umbrella companies has been ‘skimming’ millions from contractors’ payslips – reportedly amounting to a 1.5% deduction from contractors’ pay – umbrella payroll auditor, PayePass, has urged contractors to “run a mile” from umbrellas that refuse to a transparent payroll audit.
Publication, Contractor Voice, states: “Liquid Friday is making millions of pounds by hiding in plain sight an additional fee that has been costing contractors dearly every single week for years.”
The revelations come just weeks after another umbrella company, Orange Genie, was reported by Contractor Voice to have been unlawfully skimming £2 from every contractor payslip for at least 5 years – amount to £4m.
Fred Dures, founder of PayePass said, “Another week and another umbrella company has been accused of skimming money from unsuspecting contractors. This time, the umbrella in the spotlight is said to have been deducting 1.5% from every payslip. This apparent sleight of hand and other mischievous ways to syphon money from contractors doesn’t help the reputation of the umbrella industry.
“We should be careful not to tar all umbrellas with the same brush, though. True, there are a few cowboys, but this industry isn’t the wild west. Believe it or not, more umbrella companies are taking it upon themselves to raise standards and demonstrate their compliance, which can be achieved by auditing payroll processes. Many operators are watching situations like this unfold and are proactively looking to show to contractors, recruiters and end clients that they can be trusted.
“Employment agencies must quickly realise and accept that they, their clients and candidates need to be protected against unscrupulous umbrellas. The payroll auditing technology exists right now to stop and stamp out all financial wrongdoing within weeks across the entire sector.”
If an umbrella refuses to agree to a full and transparent payroll audit to remain on or join an agency’s preferred supplier list, it should be assumed that they have something to hide. My advice is to run a mile from these umbrellas. However, there are far more umbrellas out there that will gladly agree to a full payroll audit, as they have nothing to hide”.
“Even if the recent allegations against two of the UK’s largest umbrellas are not proven to be illegal, lack of transparency is a real issue. This should be enough for agencies to act, as contractors will rapidly lose trust unless they can show that their preferred supplier list is only made up of payroll audited umbrellas.
“With the payroll auditing technology that exists today, the days of an umbrella company displaying FCSA accreditation – historically one of the sector’s compliance standards – and agencies putting complete reliance in this, doesn’t cut it any longer. This is because it doesn’t audit the payroll financials.
“Let’s be frank; there are billions of pounds of funds flowing through the temporary workforce sector every single month. As a result, there is a temptation to unlawfully take a slice of it. Even so, agencies and their clients are slow to realise and accept that fact and embrace the technology that can stop it.
“Agencies are now also acutely aware of the fact that things aren’t right in the umbrella sector. Consequently, if an umbrella is proven to have been illegally skimming, agencies will struggle to plead ignorance and be certain that they don’t have any involvement. Lawyers are already circling the sector, looking for the next big feed and agencies will be on the menu.”