How Can Recruiters Benefit from Using an Umbrella Company?

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Whilst the majority of recruiters operate compliantly, new research by the Department for Business, Energy, and Industrial Strategy has named and shamed three recruitment agencies for being in breach of the Minimum Wage Legislation.

Recruiters found guilty of underpaying workers

These recruitment agencies weren’t alone. Some 233 companies were named and collectively faced fines totaling a record £1.9 million. In the case of the recruitment companies, this unfortunate state of affairs did not arise deliberately, but through a series of misunderstandings.

One of the companies withheld a deposit from their workers initial week’s wages to cover the purchase of specialist clothing with the full intention of paying it back at a later date. Another paid upfront for two workers accommodations and only fell afoul of the legislation because their repayment programme for the workers was monthly whereas the workers were paid weekly. This resulted in the unforeseen consequence of the workers being paid less than the minimum wage on two occasions.

The benefits of using a compliant umbrella company

In light of this news, it is important for recruiters to ensure that they are not leaving anything to chance. As these cases illustrate, navigating ever-changing rules can often be a challenge and this is why it can be beneficial to work with an umbrella company.

Working with Parasol as an alternative to managing your PAYE in-house means you can rest easy knowing that we take care of all your contractors pay and tax and help you ensure you are never in breach of such rules. An umbrella company such as Parasol will always be up to date with all of the newest legislation to ensure that such mistakes do not arise.

All administration is also undertaken by the umbrella company and they will deal with all tax and National Insurance contributions for the client on behalf of the recruiter. Parasol is completely transparent about the figures presented to clients, which is another step to mitigate any risks on behalf of the recruiter.

Support from Parasol

As one of the UK’s largest umbrella companies, Parasol has a wealth of experience in assisting recruiters and contractors alike. Our team of experts are always on hand to ensure you are up to date with the newest legislation and provide support wherever possible. For answers to any of your questions, just call us on 0800 464 1192 or email bestadvice@parasolgroup.com.

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