The government consultation on tackling non-compliance in the umbrella company market found that worker education for contractors and freelancers was an important issue.

As part of worker education, consistent business language must be developed across the contracting and umbrella sector as a clear means of improving sector reputation, speakers agreed. Standardising the language to help contractors and freelancers better understand the pay they receive is at the heart of the need, they said. The FCSA, the trade body for umbrella companies, needs to lead that drive.

“There needs to be openness and consistency in the way [terms] are referred to,” said speaker James Collings, a long-time freelancer, former IPSE chairman and contributor to working groups on the umbrella sector and flexible working issues.

“So much of what I read on all the rooms of various websites… they’re [the workers are] angry,” Collings said. “They’re angry because they’re confused. They heard one thing, and it’s turned out to be something else. And all of that poor communication is what’s led to problems. I’d love… to see you guys using consistent terminology because that will filter into the [FCSA] non-members, and they’ll have to start using that same terminology of where the same money is at different points in the chain.”

HM Treasury has published a consultation – ‘Tackling non-compliance in the umbrella company market’, which will close on 29 August 2023.

The government has outlined a two-step process for tacking compliance. First, primary legislation will define what an umbrella company is, and the government will then consult on the specific requirements/standards to be placed on umbrella companies before implementing them.

The FCSA’s contributions to the consultation will include “wider pieces about education, education for workers”, confirmed FCSA CEO Chris Bryce during the discussion.

Speaker Rebecca Seeley Harris, a frequent commentator on the umbrella sector, acknowledged that her own views about the industry had originally been negative, but “I’ve also got to understand what might be causing the problems. There is a lot of misunderstanding”, she said. “The problem is, there’s still so much confusion within the industry about what is and what isn’t allowed. And that is the problem… I think we need to look at the industry and try and prevent it from being talked down; I know there’s a lot of negativism.”

Collings pointed out that while well-paid contractors and freelancers are the highest profile and best educated of the umbrella workforce, “an awful lot of the workers out there are not likely degree-educated. They don’t find the joy of a spreadsheet at 11 o’clock at night. These [may include] local care workers, and they’re not paid an obscene amount of money every day. For those people, I think umbrella working is definitely the correct way”.

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