#Employment : Contractors, Agencies and Umbrella Companies

[MaxxPower]

Ok, I'm currently a contractor, working at a company where I'm employed through an agency. Basically I submit my timesheets each week to the agency, and they pay my umbrella company each month, who then pay me. (And they say Contracting is complicated. What's cimplicated about it? )

 

Basically though, my current Umbrella company has decided to cease trading so I need to find another one.

However, the agency I'm employed through have decided that they will only allow Umbrella companies that are on a list that they specify (one of the companies on this list is, surprisingly, run by the agency themselves), and they are adamant that they will not allow any other umbrella companies to be used.

 

Now, there's a guy in our office with his own limited company who has offered to do PAYE for some of us in the office, but the agency have stamped their feet and said No. Only allowed with someone on the list or through your own limited company, nothing else is allowed.

 

Basically what I'm wondering is, are they allowed to do that? Can they dictate who I can and can't use?

 

 

My contract says nothing about having to use only someone that they nominate onto a list, and my previous umbrella company was actually someone else in the office, who wasn't on any list, and there's been no changes to my terms and conditions since then. The agency however are threatening to not give me a contract if I refuse to use someone on their list, who all charge at least twice as much per month as the person I want to use. (And I have strong suspiscions that these 'nominated' companies are paying a commission to the agency for every employee they get from said agency)

 

Any advice would be very much appreciated!

[MaxxPower]

No advice anyone?

[honeybee13]

Hello there, sorry you haven't had a reply yet. This is a fairly specialist area; I do know a couple of people here understand umbrella companies and agency work [not me though], hopefully they will see this and reply to you.

 

Is there a governing body for agencies who would comment on this?

 

My best, HB

[phoenix11]

Maxx - it may also be a question of what contract the agency has with the client - so that can work both ways.

 

The client may have an agreement with the agency that only preferred 3rd Tier agencies (umbrella) can be used. Equally, there may be no such agreement and the client may even have an agreement that the agency must allow any othe company to source their contractors if the agency cannot do so.

 

Another way around this is to look at setting up your own limited company to do this - I believe it's not that difficult and you may be able to get the other guy at your place of work to help you, even to still end up physically doing the PAYE etc.

[borisbeaver]

You might want to post this here http://www.contractoruk.com/. This is a dedicted contractor site.

[MaxxPower]

I'll take a look at that site boris, thanks.

 

There's never been any kind of list before, as I said I've used companies of my choice before, it's only now that they're suddenly deciding to dig their heels in and insist that there's a list of (expensive) companies of their choice that I have to use.

I know for a fact the client has no such restrictions, as they also have people employed through another agency and these contractors are able to use any umbrella/limited company of their choice.

 

As I said, there's nothing in my contract about this list, the agency have just decided to literally pull a list out of thin air and suddenly impose it as a condition.

[pistachio]

It isn't hard to set up a limited company and if you choose a decent contractor accountant they will lighten the load of the paperwork involved. The other thing to consider is that umbrella companies are changing the way they work from October because of the Agency Workers Regs. Umbrella workers are within the scope, which potentially makes them less attractive to clients who want to 'hire and fire' freelancers for whatever skills they need and for how long without worrying about employee rights. So Umbrella companies are looking at different ways of operating (e.g. Swedish Derogation), some are announcing their plans, some aren't yet. If you are looking for alternative umbrella companies