Huw Irranca-Davies, has condemned the exploitation of construction workers by so-called umbrella companies. These companies use an entirely legal but very complex pay structure to pass on to workers the cost of employers’ national insurance and processing pay.
In many cases this means workers are losing 25% of their salary as a result of the pay structure put in place by the umbrella companies. The impact of this is that con
This issue was brought to Mr. Irranca-Davies attention by a constituent who noticed that his payslip was consistently lower than advertised. Research conducted by UCATT Union has found that this practice is spreading fast through the construction industry. In some areas it is now impossible for a worker to find a job where pay is not via an umbrella company.
‘This rapidly expanding practice is bad for workers and it’s bad for the construction industry. People feeling cheated and undervalued by their employer naturally are less productive and demotivated.’
‘In the long-term these arrangements will place a great cost on society. The Government is set to lose out on tax revenue and with less pay and worse pensions provisions construction workers will struggle to make ends meet.
‘Though this practice may be legal it is morally and ethically repugnant. People deserve respect in work and a fair wage. HMRC could end this practice with ease. The Government must act urgently to make sure it does.