Umbrella companies move to reassure agencies, in wake of £4million salary skimming allegations

Contractor umbrella companies are issuing reassurances to their recruitment agency partners, in wake of allegations Orange Genie unlawfully deducted £4million from contractor salaries.

One brolly, People Group Services (PGS), says it has written to all its staffing partners to explain how “each line” on payslips gets “scrutinised and verified” by a third-party assessor.

Its CEO Terry Hillier took to LinkedIn to say that for “total transparency,” PGS goes further, explaining “in detail what each line means” including any and all deductions, and why.

'Agencies have removed Orange Genie from PSLs since the allegations'

Since Orange Genie was last week accused of pocketing £4million by deducting £2 per payslip from 8,000 contractors, a “few agencies” have removed the umbrella company from their PSLs.

Speaking last night to ContractorUK, Contractor Voice also revealed that the ‘skimming’ it says Orange Genine did was “known [about] in the sector for a few weeks” before its Oct 31st blog went live with the allegations.

Contractor Voice is now offering any umbrella company contractor concerned about salary skimming (related to its Orange Genie allegations or not), to get their own payslip individually checked.

'Hundreds of contractors now asking for their payslips to be independently audited'

“If you would like to upload your payslips here then we will get them audited and provide you with the reports,” invited the blog’s Jacob Bellas.

Last night, Bellas indicated that his offer had been well-received, indicating concern from contractors about whether they are skimming victims to be widespread.

“A lot of contractors have asked for the auditing service. I couldn’t honestly tell you [exactly] how many have actually sent [their] payslips in…[because] we’re in the hundreds audited since Monday,” Bellas told ContractorUK. “And the audited payslips have only confirmed our previous findings.”

'Check every payslip you've ever had'

Calling contractors to come forward too is Orca Pay Group.

“Contractors, it’s time to…stand up for your pay -- this is your money,” wrote the group’s CEO Robert Sharp.

“Doing ‘due diligence’ on your umbrella, your pay, and checking your payslips is vital, every single time. Not just payslips now, but check every payslip you’ve had historically as well.”

'All deductions must be fully itemised'

Sounding in agreement, an IT contractor messaged ContractorUK since the allegations against Orange Genie, a Freelancer & Contractor Services Association member, to ask:

“Why aren’t the FSCA picking up the important point that all payments [and deductions on contractor payslips] must be fully itemised?”

Asked to confirm that Orange Genie is the member who it has expelled for breaches of its code relating to pay illustrations, an FCSA spokesperson would only tell ContractorUK:

“It is FCSA’s policy not to comment on specific cases until any disciplinary process is exhausted, including the right to appeal to the independent arbitration panel.”

'Taxi-rank basis'

But FCSA’s chief executive Chris Bryce has said the association is going to make changes to the way its payslip assessors are appointed, following questions last week by ContractorUK.

“Existing [FCSA] members whose accreditation expires after April 1st 2023 will have their assessors assigned by FCSA on a ‘taxi-rank’ basis, with those assignments lasting no more than three years,” Bryce said, in outlining one of the changes.

“[So] as members approach accreditation renewal, the assessor assigned by FCSA will change, if the current assessor has carried out assessments for that member for two or more years.”

'Some big umbrellas could be wrongly pocketing an extra £2million-a-year from contractors'

Bryce added that the association’s introduction of taxi-ranking and “mandatory rotation of assessors” will “further enhance the independence and integrity of the accreditation process”.

Hopefully it will boost compliance, because a senior-level source with inside knowledge of the FCSA -- who once detected skimming at an umbrella company bigger than Orange Genie, says umbrella companies underhandedly pocketing the monies of contractors is endemic.

“I never could get to the bottom of it,” the source began to ContractorUK. “But my estimates…suggest holiday pay [withholding] -- and skimming, was bringing in over £1million per annum, possibly £2million. And that‘s per large umbrella company. Not all big brollies of course, but some.”

Online, an education staffing sector CEO said it was wrong to abuse candidates but suggested any rush to judgement of providers would also be wrong. Almost putting both contractual sides on notice, he warned: “The industry is watching.”