A fair proportion of jobbing Umbrella Company Employees rely on recruitment agencies to match them up with forthcoming assignments; however, a recent report in the Sun newspaper claiming that the recruitment industry exploits low-paid workers and dodges NICs has been “wholly rejected” by the Association of Recruitment Consultancies (ARC).
The Sun article alleged that as many as 270,000 low-paid workers are being forced to pay weekly fees to employment businesses upon commencing work, and that employment businesses evade payment of NICs by providing self-employed workers. The chancellor, the newspaper claimed, will close down this ‘loophole’ in his autumn statement.
The ARC has robustly rejected the assertions. ARC chairman Adrian Marlowe said that the Sun’s claims were “hard to swallow” when the recruitment industry is highly regulated both in terms of tax payments and practice. The industry, he added, “has worked well for so many years with fewer and fewer complaints that the government has recently scaled back its enforcement section, the Employment Agency Standards Inspectorate.”
He went on to point out that the government may well have identified a specific area of practice it wishes to address in which some people who claim to be self-employed have not been paying the right amount of tax. This certainly does not add up to any illegal conduct on the part of agencies.
Mr Marlowe added: “The suggestion that illegality is so widespread is wholly rejected. The vast majority of recruiters provide an essential and legitimate service for the United Kingdom.”