[UK] Salary skimming accusations at another major umbrella firm

UK-based umbrella firm Liquid Friday has been accused of ‘skimming’ millions from the payslips of contractors. It is the second umbrella company within a month to have received such an accusation from Contractor Voice, SIA reports.

Earlier this month, Orange Genie was accused by the contractor support site of incorrectly deducting and disguising £2 per week on payslips in a deduction called ‘Employment cost, including Employer National Insurance’, without the knowledge of contractors. Orange Genie was reportedly investigated by the Freelancer & Contractor Services Association (FCSA) and was subsequently issued a termination of membership notice which the umbrella company has appealed.

Following the appeal, Orange Genie published a statement that the FCSA agreed not to terminate its accreditation, and ‘instead work with us through a period of suspension.’  The firm said that it has already implemented the required changes and stated it will ensure that it satisfies the standards to remain an accredited member.

In a November 14 LinkedIn post, Contractor Voice said Liquid Friday - a member of the Freelancer & Contractor Services Association and a business partner of the Recruitment and Employment Confederation - does not provide a transparent breakdown of employer costs.

“Liquid Friday Ltd charge contractors a margin, plus an additional 1.5% ‘Business Overhead’ to ‘facilitate assignments’. This 1.5% additional deduction is estimated to be millions of pounds of additional revenue every year,” the post said.

Contractor Voice said, “We have seen that Liquid Friday (much like Orange Genie) has not provided a breakdown of Employer Costs, providing an aggregate figure inclusive of Apprenticeship Levy, despite the FCSA Codes stating that they must not do this to obtain accreditation. This also makes it nearly impossible for contractors to calculate if the deduction is correct without access to payslip auditing.”

Earlier this year, Liquid Friday reportedly announced that it had renewed its FCSA accreditation for another year for both PAYE Umbrella and CIS services.

Colin Gunnell - Chief Executive Officer of Liquid Friday - made a statement, published on the firm’s website, in response to Contractor Voice’s accusations.

In his statement, Mr Gunnell, said, “All elements from PAYE Tax and National Insurance to our company margins and employment deductions are shown and explained to contractors via the Onboarding Consultation, Key Information Document, Key Facts Document, Personal Illustration, Payslip and Remittance Advice.

“In addition, Liquid Friday contacts all contractors further to their initial new assignment payment to ensure they are fully aware of all deductions and answer any questions they have. This is above and beyond what a business is required to do in line with the FCSA code of conduct in our ongoing pursuit to be the best contractor service delivered within the industry.”

Mr Gunnell added, “We simply do not understand the negativity towards our business. Liquid Friday clearly details and discusses all elements of the financial relationship of working with us so contractors and recruitment agencies alike have all the information available to make an informed decision about whether they choose to work with us.”

Staffing Industry Analysts reportedly reached out to the FCSA for comment but has yet to receive a response.

Kate Shoesmith - deputy CEO of the REC - said, “Workers should expect and receive total transparency on deductions made to their pay by umbrella companies. Anything less than that is completely unacceptable.

“What this and other cases highlight is why we need a fully regulated labour supply chain as soon as possible. We have been asking government for this repeatedly.  BEIS took one step forward with their call for evidence on umbrella companies, so the new Ministerial team should now prioritise the regulation and proper enforcement of umbrella company activities.

“Regardless of government legislation, our advice to REC members is always to conduct their own due diligence on each supplier – we have a checklist and legal support to help REC members do just that. We will also be asking FCSA to investigate and advise on their findings as soon as possible.”

Contractor Voice said, “Liquid Friday is making millions of pounds by hiding in plain sight an additional fee that has been costing contractors dearly every single week for years.”

Fred Dures - founder of umbrella payroll compliance auditor PayePass - told SIA, “Another week and another umbrella company has been accused of skimming money from unsuspecting contractors. This time, the umbrella in the spotlight is said to have been deducting 1.5% from every payslip. This apparent sleight of hand and other mischievous ways to syphon money from contractors doesn’t help the reputation of the umbrella industry.

“We should be careful not to tar all umbrellas with the same brush, though. If an umbrella refuses to agree to a full and transparent payroll audit to remain on or join an agency’s preferred supplier list, it should be assumed that they have something to hide. My advice is to run a mile from these umbrellas. However, there are far more umbrellas out there that will gladly agree to a full payroll audit, as they have nothing to hide.

"Even if the recent allegations against two of the UK's largest umbrellas are not proven to be illegal, lack of transparency is a real issue. This should be enough for agencies to act, as contractors will rapidly lose trust unless they can show that their preferred supplier list is only made up of payroll-audited umbrellas.”

Mr Dures said that, if an umbrella is proven to have been illegally skimming, “agencies will struggle to plead ignorance and be certain that they don’t have any involvement”. He added that “Lawyers are already circling the sector, looking for the next big feed and agencies will be on the menu.”

Source: SIA

(Links and quotes via original reporting)

UK-based umbrella firm Liquid Friday has been accused of ‘skimming’ millions from the payslips of contractors. It is the second umbrella company within a month to have received such an accusation from Contractor Voice, SIA reports.

Earlier this month, Orange Genie was accused by the contractor support site of incorrectly deducting and disguising £2 per week on payslips in a deduction called ‘Employment cost, including Employer National Insurance’, without the knowledge of contractors. Orange Genie was reportedly investigated by the Freelancer & Contractor Services Association (FCSA) and was subsequently issued a termination of membership notice which the umbrella company has appealed.

Following the appeal, Orange Genie published a statement that the FCSA agreed not to terminate its accreditation, and ‘instead work with us through a period of suspension.’  The firm said that it has already implemented the required changes and stated it will ensure that it satisfies the standards to remain an accredited member.

In a November 14 LinkedIn post, Contractor Voice said Liquid Friday - a member of the Freelancer & Contractor Services Association and a business partner of the Recruitment and Employment Confederation - does not provide a transparent breakdown of employer costs.

“Liquid Friday Ltd charge contractors a margin, plus an additional 1.5% ‘Business Overhead’ to ‘facilitate assignments’. This 1.5% additional deduction is estimated to be millions of pounds of additional revenue every year,” the post said.

Contractor Voice said, “We have seen that Liquid Friday (much like Orange Genie) has not provided a breakdown of Employer Costs, providing an aggregate figure inclusive of Apprenticeship Levy, despite the FCSA Codes stating that they must not do this to obtain accreditation. This also makes it nearly impossible for contractors to calculate if the deduction is correct without access to payslip auditing.”

Earlier this year, Liquid Friday reportedly announced that it had renewed its FCSA accreditation for another year for both PAYE Umbrella and CIS services.

Colin Gunnell - Chief Executive Officer of Liquid Friday - made a statement, published on the firm’s website, in response to Contractor Voice’s accusations.

In his statement, Mr Gunnell, said, “All elements from PAYE Tax and National Insurance to our company margins and employment deductions are shown and explained to contractors via the Onboarding Consultation, Key Information Document, Key Facts Document, Personal Illustration, Payslip and Remittance Advice.

“In addition, Liquid Friday contacts all contractors further to their initial new assignment payment to ensure they are fully aware of all deductions and answer any questions they have. This is above and beyond what a business is required to do in line with the FCSA code of conduct in our ongoing pursuit to be the best contractor service delivered within the industry.”

Mr Gunnell added, “We simply do not understand the negativity towards our business. Liquid Friday clearly details and discusses all elements of the financial relationship of working with us so contractors and recruitment agencies alike have all the information available to make an informed decision about whether they choose to work with us.”

Staffing Industry Analysts reportedly reached out to the FCSA for comment but has yet to receive a response.

Kate Shoesmith - deputy CEO of the REC - said, “Workers should expect and receive total transparency on deductions made to their pay by umbrella companies. Anything less than that is completely unacceptable.

“What this and other cases highlight is why we need a fully regulated labour supply chain as soon as possible. We have been asking government for this repeatedly.  BEIS took one step forward with their call for evidence on umbrella companies, so the new Ministerial team should now prioritise the regulation and proper enforcement of umbrella company activities.

“Regardless of government legislation, our advice to REC members is always to conduct their own due diligence on each supplier – we have a checklist and legal support to help REC members do just that. We will also be asking FCSA to investigate and advise on their findings as soon as possible.”

Contractor Voice said, “Liquid Friday is making millions of pounds by hiding in plain sight an additional fee that has been costing contractors dearly every single week for years.”

Fred Dures - founder of umbrella payroll compliance auditor PayePass - told SIA, “Another week and another umbrella company has been accused of skimming money from unsuspecting contractors. This time, the umbrella in the spotlight is said to have been deducting 1.5% from every payslip. This apparent sleight of hand and other mischievous ways to syphon money from contractors doesn’t help the reputation of the umbrella industry.

“We should be careful not to tar all umbrellas with the same brush, though. If an umbrella refuses to agree to a full and transparent payroll audit to remain on or join an agency’s preferred supplier list, it should be assumed that they have something to hide. My advice is to run a mile from these umbrellas. However, there are far more umbrellas out there that will gladly agree to a full payroll audit, as they have nothing to hide.

"Even if the recent allegations against two of the UK's largest umbrellas are not proven to be illegal, lack of transparency is a real issue. This should be enough for agencies to act, as contractors will rapidly lose trust unless they can show that their preferred supplier list is only made up of payroll-audited umbrellas.”

Mr Dures said that, if an umbrella is proven to have been illegally skimming, “agencies will struggle to plead ignorance and be certain that they don’t have any involvement”. He added that “Lawyers are already circling the sector, looking for the next big feed and agencies will be on the menu.”

Source: SIA

(Links and quotes via original reporting)