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AWR and Agency/Umbrella Relationships

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    #11
    Originally posted by DolanContractorGroup View Post
    I should also mention that there's no such thing as a 'No Rights Employee'.
    Agreed, however it's the term that's being popularised by a lot of commenters on IR35 and how it will essentially create this new class of worker.

    Originally posted by DolanContractorGroup View Post
    The client is under no obligation to offer employment rights, and I would doubt any client will.
    This is where my colleagues are getting it confused. Taking the PSC out of the equation, in the case of working through an agency or through an agency-umbrella situation, it is the umbrella or agency that is the employer and must offer the same rights as the clients' employees? And the only place this can come from is the rate paid to the agency, therefore if you want the rights, you can have them but your take-home will be reduced accordingly?

    Comment


      #12
      Originally posted by eatenrifles View Post
      Agreed, however it's the term that's being popularised by a lot of commenters on IR35 and how it will essentially create this new class of worker.



      This is where my colleagues are getting it confused. Taking the PSC out of the equation, in the case of working through an agency or through an agency-umbrella situation, it is the umbrella or agency that is the employer and must offer the same rights as the clients' employees? And the only place this can come from is the rate paid to the agency, therefore if you want the rights, you can have them but your take-home will be reduced accordingly?
      The purpose of AWR is for lower paid people it ensures everyone is on at least an even footing - it removes the ability to pay an agency worker less than an employee which then removes any desire to replace employees with agency workers.

      None of the rights the AWR offer really impacts a well paid contractor except the amount that needs to be withheld for holiday pay.

      And it really only matters to us because agencies have screwed up how their advertise rates and display umbrella level rates when it should be a PAYE rate being displayed.

      As I said the interesting bit for me is if / when someone tries to push for the reverse - that because some agency workers are being paid far more than their permanent equivalents the permanent equivalents push for equal pay.
      merely at clientco for the entertainment

      Comment


        #13
        Originally posted by eatenrifles View Post
        Agreed, however it's the term that's being popularised by a lot of commenters on IR35 and how it will essentially create this new class of worker.

        This is where my colleagues are getting it confused. Taking the PSC out of the equation, in the case of working through an agency or through an agency-umbrella situation, it is the umbrella or agency that is the employer and must offer the same rights as the clients' employees? And the only place this can come from is the rate paid to the agency, therefore if you want the rights, you can have them but your take-home will be reduced accordingly?
        Yes, the umbrella employer would have to ensure the agency worker is receiving at least the same amount of pay as a permanent comparator. Some rights ("day 1 rights") are the responsibility of the end client, as obviously the umbrella employer can't control who uses the end client's facilities.

        If the rate being paid to the agency worker is less than a perm, the umbrella has to ask for an increase from the agency/end client, otherwise the assignment has to be terminated by them. The umbrella can't even put the worker onto a Swedish Derogation contract from April as regulations 10 and 11 are being revoked.

        Things like SSP, etc are a cost of doing business for us. We do not charge workers for this.

        Originally posted by eek View Post
        As I said the interesting bit for me is if / when someone tries to push for the reverse - that because some agency workers are being paid far more than their permanent equivalents the permanent equivalents push for equal pay.
        Perm workers had 20 years to do this, but nothing happened. Less of a point now when contractors' pay isn't even as high as it used to be.


        Thanks

        Zeeshan
        Dolan Accountancy

        Contractor Umbrella

        01442 795 100

        Comment


          #14
          Originally posted by DolanContractorGroup View Post
          Perm workers had 20 years to do this, but nothing happened. Less of a point now when contractors' pay isn't even as high as it used to be.
          When in the past 20 years have their been agency workers sat next to employers with the agency workers earning more? There have been self employed contractors outside IR35 doing so but no agency workers were doing so until 2017.

          And there are tribunals in progress from after the 2017 public sector changes just not being advertised as no-one wants to build hopes up or complete scare people.
          merely at clientco for the entertainment

          Comment


            #15
            Originally posted by eek View Post
            When in the past 20 years have their been agency workers sat next to employers with the agency workers earning more? There have been self employed contractors outside IR35 doing so but no agency workers were doing so until 2017.

            And there are tribunals in progress from after the 2017 public sector changes just not being advertised as no-one wants to build hopes up or complete scare people.
            Hi

            Umbrella workers are agency workers. We employ some on very high rates.

            I know this because when we get comparator information back from the agency/client to comply with AWR, the perms are sometimes earning significantly less.

            Thanks


            Zeeshan
            Dolan Accountancy

            Contractor Umbrella

            01442 795 100

            Comment


              #16
              Originally posted by DolanContractorGroup View Post
              Hi

              Umbrella workers are agency workers. We employ some on very high rates.

              I know this because when we get comparator information back from the agency/client to comply with AWR, the perms are sometimes earning significantly less.

              Thanks


              Zeeshan
              I'm curious - when you say Umbrella's have to pay SSP etc, and it's a cost of doing business, which part of the Umbrella business model (outside the Umbrella employee's income from the client) allows Umbrella's to fund such a cost?

              Most consultancies, that I know of, charge such high rates, so as to cover all their fee and non-fee paying employees for this sort of thing.

              Is it a simple uplift? Employee gets x, Umbrella sells to agency at x+£markup, agency sells to client for x+£markup+£another markup?
              Last edited by pacontracting; 27 February 2020, 10:30.

              Comment


                #17
                Originally posted by pacontracting View Post
                I'm curious - when you say Umbrella's have to pay SSP etc, and it's a cost of doing business, which part of the Umbrella business model (outside the Umbrella employee's income from the client) allows Umbrella's to fund such a cost?

                Most consultancies, that I know of, charge such high rates, so as to cover all their fee and non-fee paying employees for this sort of thing.

                Is it a simple uplift? Employee gets x, Umbrella sells to agency at x+£markup, agency sells to client for x+£markup+£another markup?
                You are misunderstand how an umbrella works.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #18
                  Originally posted by northernladuk View Post
                  You are misunderstand how an umbrella works.
                  Correct. I'm not in the business of running an umbrella company hence the question. Just curious about the business model.

                  Certainly agencies make their money by tagging on a % to the contractor day rates, multiply this by a lot of contractors, spread out over time, which provides them with an income to pay for premises and staff, and make a profit. Is the Umbrella company model any different, especially as they have provide employment benefits to their 'fee earning' employees i.e. temps. That money must come from somewhere?
                  Last edited by pacontracting; 27 February 2020, 11:07.

                  Comment


                    #19
                    Originally posted by pacontracting View Post
                    Correct. I'm not in the business of running an umbrella company hence the question. Just curious about the business model.

                    Certainly agencies make their money by tagging on a % to the contractor day rates, multiply this by a lot of contractors, spread out over time, which provides them with an income to pay for premises and staff, and make a profit. Is the Umbrella company model any different, especially as they have provide employment benefits to their 'fee earning' employees i.e. temps. That money must come from somewhere?
                    Umbrella's make their money from the fee they charge every week / month for processing the payroll payment
                    merely at clientco for the entertainment

                    Comment


                      #20
                      Originally posted by pacontracting View Post
                      I'm curious - when you say Umbrella's have to pay SSP etc, and it's a cost of doing business, which part of the Umbrella business model (outside the Umbrella employee's income from the client) allows Umbrella's to fund such a cost?

                      Most consultancies, that I know of, charge such high rates, so as to cover all their fee and non-fee paying employees for this sort of thing.

                      Is it a simple uplift? Employee gets x, Umbrella sells to agency at x+£markup, agency sells to client for x+£markup+£another markup?
                      Hi pacontracting,

                      It comes from the bottom line. If it's a well established business, there is usually some provision for these sorts of things.

                      Thanks


                      Zeeshan
                      Dolan Accountancy

                      Contractor Umbrella

                      01442 795 100

                      Comment

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