The Treasury’s incoming response to its call for evidence on the umbrella market will make “crude reading” for the Freelancer & Contractor Services Association, a boss at a payroll firm predicts.
Due to the nature of the details likely sent to officials by contractors who use FCSA-accredited umbrellas, there will also be “much, much more” for the compliance group to process.
Speaking to ContractorUK, the boss was referring to the association last month having to deal with the umbrella contractor’s holiday pay, after a member allegedly pocketed the wages for himself.
“The codes in place at the time were not broken”
But last night the FCSA clarified that the member — JSA (now operating as Workwell) and who is in fact a founding member of the association, had done nothing wrong.
“We are satisfied that the JSA Group has not breached the FCSA Member Compliance Codes which were in place at the time the complaint relates,” FCSA’s Chris Bryce told ContractorUK.
Bryce declined to be drawn into the details of the FCSA’s investigation into the JSA, but apparently as a result of his clearance, the company’s FCSA membership was renewed until March 2023.
“Proactive to encourage the use of paid leave”
The association’s CEO, Mr Bryce, also said its membership codes have been “enhanced” since the complaint against JSA (relating to activity in December 2020).
And following a review in October 2021, he said the strengthening of the code was done to “clarify” that FCSA umbrellas should be “proactive in encouraging” staff to use their holiday pay.
But the adjustments to member codes, made to reflect Smith V Pimlico Plumbers, are too little too late for the payroll boss, who says the FCSA has “form” on paid time off.
“I may own one myself, but umbrella companies have been able to wrongfully profit at the expense of umbrella employees…systematically. [with holiday pay].
“And with FCSA, one of their founders was exposed on paid leave last year on Radio 4’s MoneyBox. So maybe this is a common tactic of FCSA founding companies? asked the boss.
“No consequences for the aggressors”
Since the BBC program which specified the exposed brolly as FCSA accredited, and in light of the FCSA’s extension of the now permitted JSA/Workwell membership, one NHS worker is disappointed.
“The FCSA is clearly not going to hold these companies to account. And he obviously doesn’t have the entrepreneurs’ best interests at the heart of their organization. »
A practitioner in the operating department, the worker continued, “What good is having a compliance code if there are no consequences for those who abuse it?!
“Paid leave is a big concern”
In its own submission to the umbrella market’s call for evidence (the same call the payroll boss who declines to be named predicts will be ‘rough’ for FCSA when he responds), the association says the operation paid leave is a “great concern”.
“FCSA would encourage the government to explore how these standards [derived from FCSA member codes] can be further enshrined in law,” adds the association’s brief.
“[This should be done] fully protect the worker and be explicit in terms of accountability, as to who is responsible for enforcing current and future paid leave legislation.
Kevin Austin, managing director of Access Financial, believes it would be a good idea to make the current FCSA codes mandatory for UK apex companies.
“The standards the FCSA claims to impose are great, but they have to be enforced,” Austin wrote on LinkedIn, at the time of the JSA/Workwell paid leave allegations.
Referring to concerns about the robustness of the investigation then promised by the FCSA, Mr Austin said: “There is no point in turning a blind eye to the wrongdoings of its members, whether or not they are founding members.
“The FCSA should discipline and reprimand disbelievers and, as a last resort, expel them. Likewise, they should have a code for customers that should be robust.”
“Not suitable for use”
In his statement to ContractorUK yesterday, the association’s CEO, Mr Bryce, said he ‘expects all FCSA members to adhere to the practice’ of proactively encouraging workers to use their right to paid leave.
Yet, as well-meaning as they are, it seems tough talk and expectation aren’t enough to win over one healthcare entrepreneur, Robert Wakeford.
Online in a JSA/Workwell thread, Mr Wakeford lambasted: “The blatant disregard for an alleged ‘investigation’ into the fraudulent withholding of paid leave from contractors demonstrates the arrogance of these organisations. The FCSA is clearly not fit for purpose.
“An investigation into the abuse of paid leave by entrepreneurs is necessary”
Meanwhile, Robert Sharp of Orca Pay Group appears to want a more evidence-based set of actions regarding paid leave from umbrella companies, before making up his mind.
In fact, after closing on February 22, 2022, the Treasury’s call for evidence is expected to respond with a recommendation to investigate the extent of “the actual seriousness of the abuse of paid leave in the executive contractor sector.” , says Mr. Sharp.
Separately, in its submission to HMT’s umbrella market evidence call, the agency’s body, the REC, said: “Umbrellas should be subject to some of the obligations that employment businesses have in under current recruitment industry legislation.
“Regulation should create transparency around fees/payments levied by umbrella companies.”
In his contribution to Treasury officials, workplace adviser ACAS wrote: “There can be misunderstandings about pay and vacation rights, which can prevent workers from taking the leave they are due.
“Some of the arrangements we have encountered involving umbrella companies also appear to involve [the unlawful practice of] accumulated holiday pay.
From the FCSA last night, Mr Bryce said he was ‘very pleased’ that a ‘resolution’ had now been reached between JSA/Workwell and the sole proprietor who accused the umbrella company of withholding £2,865 from paid vacation.
He described the resolution as being to the “full satisfaction” of both parties.
“It’s going to be rough”
But speaking on condition of anonymity for fear of reprisals, the payroll boss believes having to tackle accusations of pocketing paid leave could be just the tip of the iceberg for the association .
“When the call for evidence is reviewed and published, it will reveal much, much more,” the boss warned, “and from what those who submitted it have told me, it will be a really brutal read. for FCSA.