Quote: rover49 "I was on a site today and the manager was covering for holidays for two weeks and was sent by an agency, he was telling me how he had been ripped off by these agencies (I am sure it must be illegal).
He saw an advert for site managers for £18 p/hr and it stated on the books or self employed, when he rang up he said he wanted to be on the books and was told that they would pay £15 p/hr only if he was on the books. He agreed to this and signed up. He was told by the agency that he would be working for an 'umbrella' company, who would be paying him directly and the agency took only a fee, which would be deducted from his £15 p/hr, leaving him with about £13.50 p/hr.
When he got his first payslip he noticed a his tax and NI had been taken off and an additional £200 +, when he asked what it was for they said it was to cover what they had to pay in 'employers NI contributions' as they said they were not willing to cover this, the amount deducted also included an 'admin fee' for this deduction.
By the time he had his nett pay, he worked it out to be about £8 p/hr.
When he looked into this further, he found out that the umbrella company was a subsidiary of the employment agency. He asked the builder if he could work direct for them instead and they said the 'didn't want the hassle'
I hope to hell these Tory's don't get another shot at the next election, because with things like this and zero hour contracts being brought in during a coalition, imagine what it's going to be like with a right wing Tory majority.'"
I manage a construction agency in Manchester and find the above quote strange to the point of unbelievable. For another side to the debate:
The job would have been advertised at £18 p/h self employed. If he was then to be paid PAYE the agency would have to accrue holiday pay for his wages as this is European legislation and reduces his rate by approximately 10.19%. THis would leave him with a pay of £16.05 per hour and £1.95 per hour in accrued holiday pay, which is paid when he either needs a holiday or as a lump sum at the end of a contract. The agency does not keep this money and it is illegal if they do no t pay it out.
Construction agencies pay PAYE personnel through umbrella companies to avoid paying Employers National Insurance and thus offer cheaper rates to construction companies who are demanding ever more ridiculous rates. The length of a contract is told to us by the end client. We do not advertised jobs for months if they are for a day. If the job is for a day it's a waste of our time as we make no money from it. We give as an accurate length of contract as is given to us by our clients.
"200+ plus deductions they said it was to cover what they had to pay" - who said this the agency or the umbrella company?
The agency should not be making any deduction other than the accrued holiday pay. They send the gross amount to the umbrella company who make the necessary deductions for tax and national insurance. Umbrella companies also allow the provision of expenses to be paid against the tax that the operative pays reducing their tax bill. They charge an admin fee for their services.
The agency makes money from the client NOT the candidate. It does this by charging the client £20 per hour and paying the candidate £18 per hour for example. The umbrella company makes money by charging an admin fee of usually £15-£20 per week.
We payroll hundreds of people through umbrella companies every week and I get no complaints. In fact they pay very little tax and get more back by paying less tax than they do by paying the admin fee.
I fail to believe if the site manager is getting paid £8 per hour net he would still be working there and guess this is a case of Chinese Whispers.
If the site manager who is agrieved wants an explanation of his wages and where it has gone wrong I am more than happy to look at his wage slip and find out if his agency or umbrella company are "ripping him off" - please PM me with details.
Like in all aspects of life their are "Corrupt/Bad" agencies out there who are looking to make a quick buck. If this is the case name and shame them. A bad agency name spread around construction sites will do far more damage than on rugby league forums. We supply across the M62 corridor and have a good reputation I hope!
