Fixed contract rate = Ease of margin calculation
Reduced exposure to increase in legislative rises – Pension increase/National Insurance. Whilst the true cost will be pushed through the contract rate the timing of this can be matched to contract renewals rather than budget changes
Reduced administration – Removal of overheads for payroll teams, labour, software, desk space
One invoice one payment – administrative burden reduced
Reduced Insurance Premium – Employers liability, public liability and professional indemnity can be covered by the umbrella reducing premiums to the agency
Removal of HR burden – dealing with worker HR and payroll queries, employment management, whilst this is reduced due to the contractual arrangement and transient workforce there is still a requirement to deal with Sick Leave, Maternity rights and other employment issues. There is still the exposure to cost but outsourcing to employment specialists that deal with more workers allows for smooth intervention earlier – i.e. Sickness – Workers are removed from employment after two weeks if sick by following a process that allows this in contracts and communications to the worker
Legal Exposure – Employment management being outsourced assists in keeping up to date with legislation changes, new contracts updated to cover new law. Experienced teams are able to ensure full compliance at all times.
Benefits packages – whilst available to be offered through normal employment the price paid for the service is greatly reduced by the number of employees in the scheme
Payments system security – Multiple backups to ensure payments made even when high street banking arrangements fail
IR35 Compliance No issue with employment status
Worker
Continuous Employment – When worker changes agencies or contract their employment doesn’t cease – Improves employment record for lending, reduces issues with emergency tax codes, avoids tax errors that are difficult to get repaid by HMRC
Flexible Pay Arrangements – Rolled up holiday pay available – This is deducted in the adjustments to contract rate prior to applying tax and National Insurance deductions and therefore it is legal to pay as holiday pay – Under standard employment, payment of holiday pay is illegal and workers must take their holiday.
No reduction in pay – Despite the costs of employment being in the umbrella calculation, with the correct uplift there is no reduction in pay and if an agency matches the true cost of production and costs savings there is potential for slight increase
Benefits packages – with good promotion and useage workers can access a range of benefits from shopping discounts, travel and indeed fuel cards to allow fixed price fuel purchases across the country.
Safety and security of data and access to smartphone technology to enhance the employment experience
Salary Sacrifice National Insurance savings available through a salary sacrifice scheme for those who have pension contributions.
IR35 Compliance No issue with employment status
Expenses Ability to record expenses and make a claim at the end of the year for a tax refund – This is also available through PAYE but generally the cost is higher and administration harder
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