A North MP will stand up for workers rights over ‘umbrella’ companies that leave them out of pocket.
Construction employees paid by so-called umbrella companies claim they have been told to make up lost wages by claiming expenses, even fraudulently.
It is claimed that companies are getting around new government regulations forbidding them to treat workers as self-employed.
They set up umbrella companies so that the workers are not directly employed by the construction firms.
Unions UNITE and UCATT will join MPs in lobbying at the Houses of Parliament this Wednesday.
South Shields MP Emma Lewell-Buck, who will speak alongside union heads and other MPs, said:
“This is the latest in a long line of scams designed to help employers avoid their obligations to their employees and to taxpayers.
“The umbrella company loophole is costing construction workers in my constituency hundreds of pounds a month.
“These are the people who build our homes, schools and hospitals.
“They deserve better than to be conned out of a fair wage.
“The Government was warned about this problem a while ago, and I and other Labour MPs have been raising it in Parliament for months now, but we have been fobbed off by Ministers who don’t understand the scale of the problem.”
One electrician working at a building site in Northumberland was moved onto an umbrella scheme this year.
The worker said that since the change his wages were, on estimate, £2,500 to £3,500 down in six months.
“What they’re saying is that you’ve got to make it up on expenses,” he said.
“I talked to someone from the umbrella scheme on the phone to say that I couldn’t claim for driving and he said ‘surely one of your family uses a car. Use those petrol receipts’.
He said wages should not be reliant on expenses to recoup money lost through tax.
“Why should a trained electrician have to put up with a minimum wage?
“It’s been a struggle.”
In a recent report UCATT General Secretary Steve Murphy said:
“It was hoped that, as a result of the Government’s actions, construction workers would be paid properly and enjoy basic employment rights.
“The hope was dashed as, in order to get work, workers were forced to sign up to umbrella companies.”
But he said his members saw no increase in their wages.
“In fact they have to pay both employee’s and employer’s NI contributions, as much as a quarter of their eligible earnings,” he said.
Another worker, Andy, was in an umbrella scheme at a Teesside site.
He said he asked how to recover his wage and was told to fraudulently claim.
“They told me ‘you can claim six pounds a day for your parking,’ he said.
“The only thing was that the car park was private property – it was the site I worked at – and it wouldn’t cost me a penny.”
Umbrella companies act as an employer and accountant to clients, receiving invoices from them, paying the worker’s salary while deducting tax and a fee for their own work.
The method’s use has increased after government legislation was introduced to reduce the number of workers declared as self-employed.
Source – Newcastle Evening Chronicle, 22 Nov 2014