The scandal of umbrella companies siphoning off the hard-earned wages of temporary workers is continuing to grow, despite wide-spread calls for it be halted.
Today (May 3) it was revealed that a group of joiners working in Skegness, Lincolnshire, have been left more than £15,000 out of pocket by a shady employment agency.
Meanwhile, an analysis of pay slips from major construction sites in London showed that payroll companies have been siphoning off more than £20 a week from low-paid workers’ wages.
Joiner Paul Robinson, from Sheffield, was one of those who was ripped off while working on a holiday park site in Skegness.
He told the Mirror, “We’re owed more than £15,000. The job was advertised at £21 an hour by employment agency Worker Direct, but we only got £8.75 an hour.
“I later discovered that the joinery firm had only agreed to pay £17 an hour, so we were never going to get £21. In hindsight I should have known, because no one would pay £21 an hour for local joiners. We were ripped off.”
Joiner Martin Fey added, “We worked in a snowstorm for three days. We spent more on accommodation, food and diesel than we got paid, which has put me in arrears with my gas, electricity and council tax.”
The joiners received their wages through a labyrinth system of companies. The work was untaken on behalf of David Green Limited, advertised by Worker Direct Limited, paid by Outsauce Financing Limited, while the payroll was managed by NMW Contracting.
Worker Direct Limited, which has been blamed for withholding the lion’s share of the cash, has now ceased trading.
Worker Direct Limited boss Karl Fairbrother said he was not aware of the contract but said “it could have been other people at my company”.
He added, “The business has now gone so there’s not much I can do.”
Unite assistant general secretary Gail Cartmail said the scourge of umbrella companies exploiting workers has to end.
“Umbrella companies appear to be deliberately making payslips as confusing as possible in order to befuddle workers and hide how much money is being taken from their wages,” said Cartmail.
“There is absolutely no benefit for workers to be paid via an umbrella company. All the advantage is with employers who avoid paying their share of national insurance contributions, and holiday and pension provision.
“If the government had any sense of moral decency it would outlaw umbrella companies tomorrow.”
Meanwhile it was revealed that some of the lowest paid workers on construction sites in London are also having their wages skimmed by payroll companies.
An investigation by the Construction Enquirer found that traffic managers, security guards and sweepers on some of the biggest sites in the capital are losing £22.75 a week from their pay packets because of payroll company deductions.
“These workers have no choice – they are forced to work through a payroll firm. It’s not like electricians or other skilled workers who may be able to claim something back in expenses,” said Unite London region officer Harry Cowap.
“These workers – who are the lowest paid on site – are simply facing another fee for being employed through a payroll company designed to save money for the firms who should be really employing them.”
Cowap described the endemic use of umbrella payroll companies as a “scam which spread like a cancer through the industry”.
He said, “It needs to be stopped. Workers also lose out on holiday and sick pay rights – even though they are working on some of the most prestigious jobs in the capital.”