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The very same issues I have raised on this forum were featured on the Channel 4 Dispatches last night.
These are mainly recruitment agencies forcing candidates either to form a limited company or use an umbrella company. Anyone choosing the latter, often have to choose from so called 'preferred list'.
As most service providers, umbrella companies do have their place. However, they are generally not suitable unless you are earning at least Ł250 a day (inclusive of your holiday pay and employer's national insurance contributions) AND occurring genuinely deductible expenses.
In most cases, umbrellas themselves are not the root of the problem but the way how an increasing number of recruitment agencies operate nowadays.
Say, an agency advertise a job paying for Ł20 an hour in London (or less elsewhere in the country). You are then being told that unless you have your own limited company, you will have to sign up with one of the agency's preferred umbrella companies. The recruiter conveniently forgets to mention that a) Your hourly rate not only includes your holiday pay but also your EMPLOYER'S NI contributions and b) the chosen umbrella company will deduct a weekly or monthly fee for processing your pay, typically around Ł30 per week or Ł120-130 per month.
I am sure that in most other EU countries this kind of practice wouldn't be legal or possible but, hey, this is the UK where authorities shout a lot and do very little.
If you happened to watch the above program last night, you saw how a Mac Professional Solutions representative clearly stated that there is no such thing as a minimum wage in the UK. He is right. While there is a minimum wage on paper, there are far too many loopholes.
Unfortunately, there is just one (and only one) solution available - refuse to work for those recruitment agencies who don't run their own PAYE payroll!
These are mainly recruitment agencies forcing candidates either to form a limited company or use an umbrella company. Anyone choosing the latter, often have to choose from so called 'preferred list'.
As most service providers, umbrella companies do have their place. However, they are generally not suitable unless you are earning at least Ł250 a day (inclusive of your holiday pay and employer's national insurance contributions) AND occurring genuinely deductible expenses.
In most cases, umbrellas themselves are not the root of the problem but the way how an increasing number of recruitment agencies operate nowadays.
Say, an agency advertise a job paying for Ł20 an hour in London (or less elsewhere in the country). You are then being told that unless you have your own limited company, you will have to sign up with one of the agency's preferred umbrella companies. The recruiter conveniently forgets to mention that a) Your hourly rate not only includes your holiday pay but also your EMPLOYER'S NI contributions and b) the chosen umbrella company will deduct a weekly or monthly fee for processing your pay, typically around Ł30 per week or Ł120-130 per month.
I am sure that in most other EU countries this kind of practice wouldn't be legal or possible but, hey, this is the UK where authorities shout a lot and do very little.
If you happened to watch the above program last night, you saw how a Mac Professional Solutions representative clearly stated that there is no such thing as a minimum wage in the UK. He is right. While there is a minimum wage on paper, there are far too many loopholes.
Unfortunately, there is just one (and only one) solution available - refuse to work for those recruitment agencies who don't run their own PAYE payroll!
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