“Ban the umbrella company con-trick,” says Nia Griffith MP, who has added her voice to the campaign by trade union UCATT against so-called “umbrella companies“.
Nia explains,
“ This is a con-trick by employment agencies who use an entirely legal but very complex pay structure to pass on to workers the cost of employers’ national insurance contributions and processing pay. Employment agencies are able to pass onthese costs by putting an umbrella company between themselves and the staff they recruit, and, to add insult to injury these companies then help themselves to a fee out of the workers’ wages. This means that workers often end up with a lot less in their pay packets than the rate agreed. Workers, including some working on the UK’s biggest public construction projects, are left seriously worse off: we are talking about £100 a week worse off, with workers taking home £400 instead of £500 a week. Umbrella companies also rip the rest of us off as they deprive the Treasury of tax revenue, amounting to a loss of nearly £4,000 year for a worker who is supposed to be getting £500 a week. So the workers lose out and the taxpayer loses out, whilst the umbrella companies are raking it in –Crest Plus Exchange Ltd for example turned over more than £11 m in 2012 /2013 and increased its profits by 11%. I am campaigning to see an end to these appalling practices: this is a scandal which has got to stop ”