Government plans let ‘dodgy umbrella companies off the hook’, warns TUC

Trades Union Congress renews calls for ban on umbrella firms to address labour market abuses

The Trades Union Congress (TUC) has warned that government plans to address labour market abuses by umbrella companies are inadequate, amid signs that thousands of temporary workers may be being denied pay and basic rights.

As many as 600,000 temporary workers in the UK are thought to be employed by umbrella companies - used by recruitment agencies and companies to cut temporary payroll costs, which are usually charged as fees to the workers instead. The problem costs workers and the government as much as 4.5bn in fraud and misappropriation, according to estimates recognised by the government.