Regulating Umbrella Companies: A Balancing Act
Today’s government announcement about a statutory due‑diligence scheme for umbrella companies has sparked a mix of cheers and cautions. The Association of Professional Staffing Companies (APSCo) applauds the move toward stricter oversight, yet warns that the road ahead is riddled with twists and turns.
Why the Need for Clear Definitions?
“We’re missing a clear definition of what an umbrella company actually is,” says Tania Bowers, APSCo’s Global Public Policy Director. “And we need a licensing framework that can grow with the market.” Her goal? A regulatory structure that protects workers without stifling legitimate staffing solutions.
The Peril of Rapid Market Entry
- Umbrella companies can set up shop in just a few days.
- No real barriers mean anyone can launch a new entity.
- Potential for financial misconduct looms large—workers and the supply chain are at stake.
Scholarly solutions have come in the form of an industry licence or registration—perhaps with oversight from the Employment and Apprenticeship Service (EAS) or a similar body—to curb risky behaviour.
Balancing Compliance and Recruiter Freedom
While APSCo supports embedding due diligence in regulatory codes as a “first step,” they’re not convinced it’s the silver bullet against tax non‑compliance. Their stance is clear:
- We don’t want to drape recruiters with more liabilities.
- The forward march of regulation should stay balanced.
- A degree of statutory compliance, not just self‑regulation, is essential.
In Short
The government’s push for responsibility is welcome, but the landscape is complex. One must keep an eye on ensuring compliance without crippling the agile players who keep the workforce moving.
