Government consults on regulation of umbrella companies.

The Government is now consulting based on recommendations in the Good Work Plan to establsh a new single enforcement body for employment rights. This consultation will also look at the possibility of one single enforcement body that will inevitably look at the regulation of umbrella companies.

The consultation will consider the creation of a new single enforcement body responsible for enforcing employment rights which will include the regulation of umbrella companies. This type of arrangement has worked in other countries and the Government will now look to see if similar measures can be applied in the UK.

The proposal is that the new body would combine the responsibilities that currently sit under the Director of Labour Market Enforcement’s remit. This includes the enforcement of national minimum wage currently carried out by the HMRC, domestic regulations relating to employment agencies, licenses to supply temporary labour in high risk sectors, and labour exploitation and modern slavery related to worker exploitation.

The consultation also suggests that the department will have new responsibilities in relation to umbrella companies and holiday pay for vulnerable workers.

The government aims to deliver on the following:
Extended enforcement particularly in the areas of umbrella companies and holiday pay, which are not currently enforced;
A strong, recognisable brand making it easier for individuals to know where to go for help;
Better support for businesses through development of guidance;
Coordinated and consistent enforcement action;
Greater sharing of intelligence, and;
Closer working with other enforcement partners.

The Government are asking for feedback on the consultation with views being sought on whether the new body should include responsibilities in relation to statutory sick pay breaches, the Equality and Human Rights Commission in relation to discrimination and harassment and BEIS in relation to the enforcement of employment tribunal awards.

The consultation closes on 6 October 2019.