Umbrella Compliance

The umbrella sector plays an important role in protecting workers, however it is currently not regulated by the government.

An increasing number of umbrella firms operate dubious practices that are not compliant and may put umbrella workers at risk. There are a number of self-regulation bodies that test umbrellas against their compliance standards, and any umbrella wishing to become an IWORK Partner must achieve one of these:

ABOUT ERA Services

Employment Rights Assessment (ERA) Services was developed following the government’s commitment to the Good Work Plan to ensuring that all workers are protected. Employment law is complex with varying rights depending on the type of worker as well as the contract with the company engaging the worker. ERA covers all elements of the worker engagement chain including the individual themselves, their recruitment agency and their umbrella company.

ERA Services prides itself on integrity, impartiality and transparency, and has robust governance procedures to ensure these values are upheld in practice.


The Freelancer and Contractor Services Association (FCSA) accolade is widely recognised as confirming a high level of compliance by the umbrella firms that successfully achieve it. FCSA’s standards and compliance codes are published on their website, and their annual compliance testing is conducted independently of FCSA by regulated lawyers and accountants.

FCSA’s accreditation process includes pre-requisite and due diligence checks, assessing documentary evidence of how each and every standard is met, on-site audits (COVID restrictions and policies permitting), backed-up by ‘mystery shopping’ throughout the year and a contractor complaints procedure.

ABOUT Professional Passport

The largest independent assessor of payment intermediary compliance, Professional Passport tests against all relevant legislation and recognised best practice in the sector, and requires transparency in all information communicated to contractors so there should be no misunderstandings in how the worker is engaged.

Professional Passport reviews all relevant services provided by its members, and requires any new services developed by its members to be approved by Professional Passport prior to launching. Professional Passport is the only insurance backed compliance standard in the market currently.

ABOUT WTT Consulting

WTT’s compliance testing audits the payroll to ensure that it has been processed accurately within current HMRC legislation, and ensuring that all invoiced monies are accounted for and reconciled. Their monthly testing follows the money trail from agency, to umbrella, to contractor and ensuring that all deductions are recorded accurately and match both HMRC’s RTI submissions and the umbrella company records, including payslips issued.

The monthly audit reviews the umbrella against WTT's bespoke database of tax avoidance “red flags”, acting as an early warning system for contractors and agencies, and protecting them against the Corporate Criminal Offence of failing to prevent tax evasion.

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