Significant win for APSCo as rolled up holiday pay legalised

The Association of Professional Staffing Companies (APSCo) has met with enthusiasm the announcement this week that rolled up holiday pay will be legalised for agency workers including umbrella workers, a move which the trade association has called for in its consultation response.

In an announcement earlier this week, a number of crucial steps were confirmed that recruiters and umbrella companies will welcome, including:

- Retaining two distinct ‘pots’ of annual leave and existing rate of holiday pay (4 weeks at normal rate of pay and 1.6 weeks at basic rate of pay)

- The introduction of rolled up holiday pay for irregular hours workers and part-year workers, which would include some agency workers

- Plans to legislate an accrual method to calculate entitlement at 12.07% of hours worked in a pay period for irregular hour workers and part-year workers in the first year of employment and beyond

- The simplification of TUPE requirements and reduction of administrative burdens for small businesses

Tania Bowers, Global Public Policy Director at APSCo, comments: “This is a significant win for APSCo and its members. We've highlighted for years that rolled-up holiday pay is necessary and will protect agency and umbrella workers. We’re pleased to see our recommendations have been seriously considered and adopted in this consultation response, including the rate of holiday pay and the simplification of TUPE requirements.

“The plans outlined are, in our view, the only fair way to pay irregular workers and ensure they are no longer at risk of losing accrued holiday pay due to the way they are employed. However, it's now important for recruiters and umbrella companies to assert to workers and end clients individuals must take the holiday or pay they are owed and the Working Time Regulations.

“This new development is perhaps the first example of the UK Government being able to utilise the increased freedom of decision making that has been afforded following Brexit. What will be key now, though, is the timing of this transformation and whether or not it will be legislated and enacted under the current Parliament.

“How to fairly compensate holiday entitlement for the flexible labour market is a key topic of conversation at the moment, with the Gangmaster and Labour Abuse Authority (GLAA) also issuing a new brief on the treatment of holiday pay following the Supreme Court decision of Harper versus Brazel.”

https://www.apsco.org

APSCo warns umbrella compliance consultation is ‘flawed’

In response to the Government's consultation period, Tackling non-compliance in the umbrella company market, the Association of Professional Staffing Companies (APSCo) has warned the proposals are flawed as they fail to do address the root cause of the issue, the need for licencing of the umbrella sector.

In its submission to HM Treasury, APSCo highlighted many of the proposals aren't sufficiently wide-ranging, including:

- The proposed options aren't fit for the current marketplace, let alone anticipating future market innovations.

- They won't address the fundamental problems, there are no barriers to entry to the umbrella market, setting up a corporate entity and launching an umbrella company can be done in a mere matter of days.

- The supply chain can't have the same access to payroll data as HMRC, thus no amount of due diligence will give the supply chain access to the information that's vital to find and prevent tax avoidance. If a corrupt umbrella company sets up a shadow scheme, either with or without worker’s knowledge, then this won't be shown on any standard level of due diligence by a recruiter.

Tania Bowers, Global Public Policy Director at APSCo points out: explained: “We've proposed a broader definition to encompass umbrella companies within existing legislation which also allows for marketplace evolution, for example, such as direct engagement with end-hirers.

“While we welcome the commitment to tackle non-compliance in the umbrella sector, we believe the proposals don't go far enough to target the umbrella companies, as opposed to placing more liability and obligations on recruiters.

“There are no barriers to entry to the umbrella market, which means that setting up a corporate entity and launching an umbrella company can be done in a matter of days. 

"A licencing or registration process is required with EAS or another body, in recognition that financial wrongdoing is the largest risk to workers and the supply chain. Further, industry self-regulation should be replaced with statutory compliance codes.

“Members support enshrining due diligence in regulation as a first step as this will immediately lead to a more level playing field but don’t think it’s the most effective route to stop tax non-compliance.

“As to debt transfer and requiring recruiters to take on deemed employer obligations, members consider this will lead to SMEs being edged further out of the marketplace as end-hirers and outsourcers understandably toughen up their preferred supplier lists and contractual indemnities and potentially take the hiring process in-house.

“APSCo will continue to work with HMT, EAS and HMRC to find the right, best solutions to tackle tax non-compliance in the umbrella sector and ensure the voice of our members is heard, but urge Government to redirect their energy at regulating the sector itself, rather than requiring recruiters to do so."

https://www.apsco.org