Source · Select Committees · Business and Trade Committee
Recommendation 7
7
Accepted
Publish plans to regulate the umbrella company market and tackle non-compliance.
Recommendation
While compliant umbrella companies can have many benefits to workers, there have been longstanding concerns across governments that the lack of regulation in the umbrella company market can lead to exploitative working practices. The evidence is overwhelming of the need for the Government to properly regulate umbrella companies. The Committee therefore asks the Government, in response to this report, to set out how it plans to regulate the sector and tackle non-compliance in the umbrella market. (Recommendation, Paragraph 43)
Government Response Summary
The government agrees timely action is needed to regulate umbrella companies, has set out plans in response to a 2023 consultation, introduced an amendment to the Employment Rights Bill, and committed to consult on a bespoke regulatory framework.
Government Response
Accepted
HM Government
Accepted
The Government agrees that timely action in the umbrella company market is imperative to protect the most vulnerable workers and has set out its plans to regulate umbrella companies in the response to the 2023 consultation, Tackling non-compliance in the umbrella company market1 (undertaken by the previous government). In addition to the plans announced at the Autumn Budget, which have been referenced in the Committee’s Report, the Government will regulate umbrella companies to ensure individuals working through them receive comparable rights and protections to any other person currently working through an employment business. The Government has introduced an amendment to the Employment Rights Bill to bring umbrella companies’ activities under the same enforcement regime as employment businesses. The Government will consult on the bespoke regulatory framework for umbrella companies in due course.