"Umbrella company" and Holiday Pay

[Amper]

Hi everyone

I'm working in London on construction site through agency X from more than half a year. I don't have UTR number so I'm working with NIN. I'm getting my payment from other company Y (I've read on the web that they call this kind of companies "Umbrella company"). Everything was ok until I wanted to take my holidays and according to my contract I send an email to company Y to inform them that I would like to have my holiday paid. Unfortunately the company text me that e-mail:
"I checked your record. We don’t have any held holiday pay to release you. You are on Ł8.50 rate. Every week we paid you the holiday money with your wages. Last week your holiday pay amount is Ł46.29.Please refer the attached payslip. Your Ł8.50 rate per hour inclusive of your basic pay & holiday pay. Unfortunately you don’t have any holiday money."

That suprised me because when i look at my payslip I can see in the Deductions - Holiday Pay whitch in my opinion agency is taking from me (by decreasing my basic pay) every week. My contract is saying that i should get paid on the time when I'm going for a holidays and not every week like their answer is saying. I'm attatching copy of my payslip below. Please tell me if I'm thinking right and I should fight for my money or maybe they used my less knowledge about UK law and I can't do anything.

P.s. Today was my last day of work for this company and I think that they should pay me for any unused paid holiday. Am I right ?

Thank You very much for any advice.

[Mr $quandaŁot]

Re: "Umbrella company" and Holiday Pay

Umbrella companies are often one of the biggest cons.

Agencies love them (because they can pass the bug on to them).

Say your agency rings you and informs you that they can offer you work at a daily rate of Ł120. They fail to tell you that the quoted rate doesn't only include your holiday pay but also employer's national insurance contributions. Your true daily rate was less than Ł90. Only on the UK!

In this c(o)unt(ry) anything goes.

Some of my friends don't agree with me but I'm looking to move back to my native country just like my Norwegian friend (a separate thread)!

[FlamingParrot]

Re: "Umbrella company" and Holiday Pay

Hi everyone

I'm working in London on construction site through agency X from more than half a year. I don't have UTR number so I'm working with NIN. I'm getting my payment from other company Y (I've read on the web that they call this kind of companies "Umbrella company"). Everything was ok until I wanted to take my holidays and according to my contract I send an email to company Y to inform them that I would like to have my holiday paid. Unfortunately the company text me that e-mail:
"I checked your record. We don’t have any held holiday pay to release you. You are on Ł8.50 rate. Every week we paid you the holiday money with your wages. Last week your holiday pay amount is Ł46.29.Please refer the attached payslip. Your Ł8.50 rate per hour inclusive of your basic pay & holiday pay. Unfortunately you don’t have any holiday money."

That suprised me because when i look at my payslip I can see in the Deductions - Holiday Pay whitch in my opinion agency is taking from me (by decreasing my basic pay) every week. My contract is saying that i should get paid on the time when I'm going for a holidays and not every week like their answer is saying. I'm attatching copy of my payslip below. Please tell me if I'm thinking right and I should fight for my money or maybe they used my less knowledge about UK law and I can't do anything.

Umbrella companies are often one of the biggest cons.

You can't generalise as a lot of people voluntarily use them to minimise taxes or avoid having to file as self-employed. However, when it comes to the construction industry they often are a con. This relates specifically to that industry: https://www.ucatt.org.uk/files/publi...k%20Report.pdf

Rolled up holiday pay puts health at risk.
In addition, many of the payslips UCATT has seen from umbrella companies include ‘rolled up’ holiday pay, where, instead of being paid during an actual break, employees are paid holiday pay as part of
their weekly wage. This means that umbrella company workers doing hard manual labour on potentially hazardous building sites may not take a holiday for months on end, putting both themselves and those working with them at risk.
Because of this health and safety risk, the payment of rolled up holiday pay is forbidden under the Construction Industry Joint Council (CIJC) agreement.

Operatives are entitled to 29 days paid annual holidays inclusive of eight public and bank holidays. Paid holiday entitlement accrues at the rate of 0.558 days per week of service. This is an absolute entitlement that cannot be replaced by rolling it up into basic pay, bonus or any other allowance which would result in the operative not receiving their full holiday pay when taking annual leave. (2013 CIJC Working Rule Agreement).

As you have seen above, bundling your holiday pay with your regular pay as opposed to paying you to take time off is against the law, at least as far as the construction industry is concerned. :mmph:

Agencies love them (because they can pass the bug on to them).

Say your agency rings you and informs you that they can offer you work at a daily rate of Ł120. They fail to tell you that the quoted rate doesn't only include your holiday pay but also employer's national insurance contributions. Your true daily rate was less than Ł90.

As you can see, they can't do that in the construction industry for health and safety reasons.

Only on the UK!

In this c(o)unt(ry) anything goes.

I don't know the laws in other countries, in fact UK law is complicated enough what with Scotland and NI having different laws in some areas, so I can't say for sure but I'd have thought there would be other countries where employers can get away with even more than here, the US comes to mind.

Some of my friends don't agree with me but I'm looking to move back to my native country just like my Norwegian friend (a separate thread)!

This isn't particularly helpful to those of us who live in this country, natives or otherwise. But good luck to you and your friend!

[judgemental24]

Re: "Umbrella company" and Holiday Pay

Under the Working Time Regulations, holiday pay must be shown as a separate entry on the employee’s payslip when they take annual leave rather than included within their pay rate.

Holiday will be calculated as follows:
Weekly invoices:

28 days per year x 7 hours per day @ Ł6.70 per hour (NMW) / 52 weeks = Ł25.26 holiday pay

Monthly invoices:

28 days per year x 7 hours per day @ Ł6.70 per hour (NMW) / 12 months = Ł109.44 holiday pay.

As flamingparrot has stated your umbrella company is acting illegal as holiday pay is a statutory right

[Mr $quandaŁot]

Re: "Umbrella company" and Holiday Pay

You should always remember the following:

Umbrella companies may legally be classified as your 'employers' but in reality they are just payroll services/accountants.

They don't get compensated enough for their services, hence many contractors have bad experiences. I am saying this because agencies just pass the bug onto them.

Flaming Parrot says many people choose to use them. Some do because they have no choice. Some do because they occur expenses that can be deducted, minimising your tax liability. This usually happens if you are travelling a lot and genuinely working for various clients - or for one who sends you to different locations.

Apart from that, there's no reason to use umbrellas!

[Amper]

Re: "Umbrella company" and Holiday Pay

Thank you for that quick reply. According to your answers do you think I can try to sue them ?

I've tried to contact with one solicitors company but they told me that their payment would be bigger that the amount of money that I can claim for. They told me that I can try to go to Small Claim Court or go to Citizen Advisor.

Can I still do something with that if I don't work for them anymore ? (finally I'll have normal contract) but I don't want to leave this like that. In my opinion they are thinking that they will hire only people that can't count and don't understand english very good and they are using this to get more money.

When I told to my agent that paying me rolled-up holiday is against the law, he start laughing and told me "show me that law"....

Below I'm attatching part of my contract that is saying about Holidays. For me it saying something completly different than my payslip...


9. HOLIDAYS

9.1 The Employee shall be entitled to 28 days' paid holiday in each holiday year which shall include the
usual public holidays in England and Wales or days in lieu where the Company requires the
Employee to work on a public holiday. The holiday year of the Company runs between 1st April and
31st March. If the Appointment commences or terminates part way through a holiday year, the
entitlement of the Employee during that holiday year shall be calculated on a pro-rata basis
rounded up to the nearest whole day.


9.2 Holiday shall be taken at such time or times as shall be approved in advance by Mathi at times
which are convenient to the Company. Requests must be made 3 weeks in advance of any proposed
holiday. The Employee shall not without the written consent of Mathi carry forward any accrued
but untaken holiday entitlement to a subsequent holiday year unless the Employee has been
unavoidably prevented from taking such holiday during the relevant leave year because of sickness
absence or statutory maternity, paternity or adoption leave and this is confirmed in writing before
the next holiday year.


9.3 The Employee shall have no entitlement to any payment in lieu of accrued but untaken holiday
except on termination of the Appointment.


9.4 If the Company has terminated or would be entitled to terminate the Appointment under clause 12
or if the Employee has terminated the Appointment in breach of this agreement any payment due
under clause 9.3 shall be limited to the statutory entitlement of the Employee under the Working
Time Regulations 1998 and any paid holidays (including paid public holidays) taken shall be deemed
first to have been taken in satisfaction of that statutory entitlement.


9.5 If on termination of the Appointment the Employee has taken in excess of his accrued holiday
entitlement, the Company shall be entitled to recover from the Employee by way of deduction from
any payments due to the Employee or otherwise one day's pay calculated at 1/260th of the salary
for each excess day.


9.6 If either party has served notice to terminate the Appointment, the Company may require the
Employee to take any accrued but unused holiday entitlement during the notice period. Any
accrued but unused holiday entitlement shall be deemed to be taken during any period of Garden
Leave under clause 14.


9.7 During any continuous period of absence due to Incapacity of one month or more the Employee
shall not accrue holiday under this contract and the entitlement of the Employee under clause 9.1
for the holiday year in which such absence takes place shall be reduced pro rata save that it shall
not fall below the entitlement of the Employee under the Working Time Regulations 1998.
9.8 Your are entitled to paid holiday pay at your normal rate of basic pay. Holiday payments will be
calculated on the basis of your average hourly rate for the 12 working weeks immediately before
the holiday is taken. This will normally be paid by way of ‘rolled up’ holiday pay and paid to you in
advance of the leave taken, subject to your complying with this Agreement.

[judgemental24]

Re: "Umbrella company" and Holiday Pay

This will come directly under the agency workers and working time regulations.

13(9)Working Time Regulations

http://www.legislation.gov.uk/uksi/1998/1833/regulation/13/made

[judgemental24]

Re: "Umbrella company" and Holiday Pay

You will need to go through the Employment Tribunal service within three months of you leaving the job under section 13 Employment Rights Act and unlawful deduction of wages

SEND YOUR AGENT A 14 DAY LETTER BEFORE ACTION AND GET HIM TO SORT IT OUT AS A MIDDLE MAN