REC responds to consultation on umbrellas

Responding to the publication of consultation ‘Tackling non-compliance in the umbrella company market’ by HM Treasury, Neil Carberry, REC Chief Executive, said:

“Regulation of umbrella companies is long overdue. Today’s announcement represents progress that is crucial to a sustainable temporary work market. Unlike recruitment firms, umbrellas currently operate without a specific regulatory framework, leaving workers and employment businesses at risk of non-compliance on worker rights and tax. While there are voluntary standards and audits in place for these firms, a strong legislative base is necessary. This consultation is a step towards that.

“The use of a simpler definition of umbrellas is helpful because it will help everyone understand the rules and hold umbrella companies accountable. We will talk to our members about individual proposals before responding formally, but we already know that we need progress on the creation of a suitably resourced Single Enforcement Body (SEB) to make sure any regulation is complied with. Umbrella companies are prone to evolving quickly and have complex structures, so any rules will need a strong enforcement framework. This can’t be bodged by handing responsibility to someone else in the supply chain.”

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Notes to editors:

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

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