Umbrella Company saying they have no money in their account to pay me!

[WoozleWoppit]

I recently started a new 6 month contract where I am employed by an agency who then send my pay to the umbrella company I use as a contractor. I've been there for a month now and initially I realised they had set me up as paying me monthly rather than weekly - which I am used to - so I requested it be weekly which they duly changed. So I have been waiting to get my pay through and last week I was still waiting - checking my umbrella company's pay tracker online to see when I was going to be paid. I contacted the umbrella company to ask what was going on - they said they hadn't been paid by the agency. So I contacted the agency who told me my pay from the first two weeks of my contract had been paid to the umbrella company on the Monday - and should have cleared on the Wednesday (which was the day before I had contacted them.) So I contacted the umbrella company again with the payment date info - one customer services person even forwarded me my own email asking me whether I could tell them where the money was!

 

Eventually I made a complaint and they called me - stating that they had received the money but that the agency sends the pay for all their contractors as a lump sum with a remittance note to state who should be paid and how much etc. However they had also had a huge deduction in the same payment which wiped out their account - leaving only around £1000 - not enough to pay anyone.

 

I contacted the agency again and they said that while the deduction was being looked into, that as far as they were concerned they had paid me (and everyone else on the remittance) and that it was up to the umbrella company to sort things out.

 

I am hopeful that they will sort this out between them - but in the meantime where do I stand with regards to obtaining the money which I am legally entitled to having worked for it?

 

They even said they couldn't notify all the people concerned as there were too many to contact - meaning anyone else wondering where their money was would have to get in touch with them - to then probably be given inaccurate information like I was to begin with, before they find out what is really going on. Surely the umbrella company has a responsibility to notify their clients of any problem with making their payments?

 

Any advice is welcome.

 

Many thanks

[BankFodder]

It looks as if they are in serious trouble.

 

I would put in a county court claim immediately. You will probably get a judgment almost automatically and this will get you a much better chance of being paid in full when the company goes into administration.

 

This assuming that you're contract is with them.

If your contract is with the agency then it is up to them to see that you are paid and it is up to them to get their money back from the umbrella company.

 

Frankly I don't understand the mechanism.

 

I don't see why the agency should be paying the umbrella company.

You do the work for the umbrells company. They should be paying you directly or paying the agency which then pays you.

 

Some thing in your story doesn't make much sense to me.

[rastinan]

Have had something very similar happen to me before. I actually got the company that I was undertaking the work for (due to it being a business critical project and me stating to them that I was going to have to look elsewhere due to not getting paid) to put some pressure on the employment agency who then put pressure on the umbrella company, and within a day or 2 of that happening I was paid in full (dont know where they found the money as like you they claimed they didnt have enough).

 

Personally, I'd attempt that option first, and if that doesnt work out, as per what BankFodder said get that county court claim raised against the umbrella company.

[WoozleWoppit]

Thanks Guys - Bankfodder - the mechanism is this:

 

I am doing my contract for an IT company - lets call them A.

A source out their staff through a company - lets call them B.

B got me through an agency - lets call them C.

C uses a company to manage all their contractors via an online tool where you do your timesheets etc lets call them D.

I use the umbrella company to sort out my tax etc - lets call them E.

 

I do my paper timesheet at A - which then gets given to the manager at B - (C not really involved so much at this point - it goes straight to D). I do an online timesheet through D which gets approved by the manager at B. Once approved D then invoices A for my time and arranges the payment. Meanwhile I also do a timesheet using E who then invoice D for the money to come to me - so they can then sort out my PAYE and NI etc.

 

Now the way D and E work together to secure the payment for the contractors who use E is that E will send D all the invoices from each contractor. D then gather all the funds they have been sent by the various A companies and then send it as a lump sum with remittance advice as to who it should be for so that E then process and send out the various payments to all the contractors.

 

D have said that the deduction in their recent run to E was to correct something like an overpayment - pretty large overpayment if it has pretty much debited out all of the money they had sent across.

 

I am of the belief that E has a separate bank account to handle payments from D - rather than it being their sole company bank account. So it's doubtful they are going into administration because of this.

 

I will be talking to my manager (who although he works at A - is also the managing director at B handily!) and finding out what pressure he can put on things for me.

 

If all else fails then it will be a county court matter.

 

I am awaiting a payment this coming week for my third week of my contract - but I have switched umbrella companies so that this last's weeks timesheet will go through them instead.

 

Lets hope I finally see some money next week.

 

Thanks for your advice. Any other views also still welcome.

[up2meears]

Hi Woozle,

 

When I had problems with my umbrella company, I harassed the hell out of them and also the guy at the agency that employed me. Seemed to work. The boss at the company where I was temping, even offered to come to a temporary arrangement until the UC sorted their life out.but apart from that haven't got any extra advice than you've already received from BF and Rastinan, just want to wish you good luck and hope you get paid soon.

 

These umbrella companies are a nightmare, they charge you loads of your hard earned cash and then constantly mess you around. I've been trying since October to find out who regulates them, but that's another a story.

 

Good luck, let us know what happens

Up2

[WoozleWoppit]

Thanks Up2. Will see what they do this week and will speak to my manager about it.

 

WW

[andydd]

It looks as if they are in serious trouble.

 

I would put in a county court claim immediately. You will probably get a judgment almost automatically and this will get you a much better chance of being paid in full when the company goes into administration.

 

This assuming that you're contract is with them.

If your contract is with the agency then it is up to them to see that you are paid and it is up to them to get their money back from the umbrella company.

 

Frankly I don't understand the mechanism.

 

I don't see why the agency should be paying the umbrella company.

You do the work for the umbrells company. They should be paying you directly or paying the agency which then pays you.

 

Some thing in your story doesn't make much sense to me.

 

If you are working self employed (which in effect is what many contractors are in this position) then the agency or company cant pay you directly (you would then bypass all the PAYE tax issues), they have to pay a Ltd Company, you can set one up on your own or a simple issue, the umbrella company does all the stuff for you, tax, etc and you can offset expenses and they then pay you....

 

I dont have more to add though apart from chasing the umbrella company..through court if needs be.

 

Personally Ive used an umbrella company (edited) without issue,although the rest of the time I used my brothers limited compnay.

 

Andy

Edited March 25, 2012 by honeybee13
Removing company name.