umbrella rain

Umbrella Accused Of “Skimming” Threatens Legal Action

Orange Genie, a well established umbrella firm, has threatened legal action against campaign group Contractor Voice following an accusation that Orange Genie has been “skimming” money away from contractors.  Contractor Voice says it has analysed payslips issued by Orange Genie and found an additional £2 deduction disguised within the heading “Employment cost, including Employer National Insurance”.

According to Contractor Voice “none of the Orange Genie payslips that we have seen and audited include an itemised breakdown of the hidden £2 and only becomes visible following a payslip audit.”

However, in a letter to Contractor Voice, Orange Genie said: “Your use of the statements “salary skimming” and “unlawfully and systematically taking money from contractors” are refuted, factually incorrect, misleading and are used to damage the reputation of Orange Genie.”

Contractor Voice has published the correspondence, and their response denying what Orange Genie has said, which you can read here.

The facts are likely to hinge on a technicality, that the “employment cost including employer national insurance” is set by the umbrella and whether it can include whatever costs they consider appropriate to that heading.  However, the question remains – why is this cost made up of employers NICs plus £2?  It is usual for this line on umbrella cost reconciliations to be made up of solely employers NICs.  Assuming the £2 is a genuine employment cost, why has it not been declared transparently?

As an FCSA member, Orange Genie is required to provide their umbrella workers with a transparent itemised breakdown of all employer costs.  Whilst not naming any particular member, FCSA issued this statement in relation to allegations they received about one of their members not providing the required detail in pay documentation.  At the time of writing, no further update has been provided.

Responding to journalists interested in the case, IWORK’s founder Julia Kermode commented:

“This case illustrates why it’s now absolutely essential to demand robust third-party financial checks which verify that both the umbrella’s own financial processes and their payroll software are operating properly.  All too often any malpractice with contractors’ income takes place within the umbrella before the money reaches their payroll system.  This can easily go undetected if the net pay seems in the right ballpark.”  

We will keep you informed of any further developments.


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