Advice for Carillion Contractors who Work for Umbrella Companies

The UK’s second largest construction company, Carillion, has gone into liquidation, after talks between the firm, it’s creditors and the government failed to reach a deal to save it.

Contractors working for Carillion will be watching with interest today, hoping for indications that they will be paid for work they’ve completed. Whatever the eventual outcome, thousands of contractors are in for a tense time.

Speaking on BBC Radio 5’s Phil Williams show, Anthony, a contractor who had previously worked for Carillon, expressed concerns on behalf of colleagues who work for umbrella companies. Chief among these concerns was the worry that they were less likely to be paid because Carillion has no contractual relationship with them.

In fact, umbrella employees find themselves in a much stronger position than many other contractors in this situation.

Where many contractors may not be paid at all, and are understandably anxious, those employed by umbrella companies have additional protection. As their employer, the umbrella will still have to pay them, even if the agency or client are unable to pay.

The protection offered by umbrella companies

Choosing umbrella employment means just that; you’re employed. You have a contract of employment with the umbrella company, who in turn have a contract to supply your services to the recruitment agency or client.

The agency or client doesn’t owe money to you, they owe the umbrella company. If the client folds and your umbrella employer doesn’t get paid, they still have to pay you. Typically, your umbrella employer will be contractually obliged to pay you for the hours you worked at the applicable National Minimum Wage.

Why the National Minimum Wage?

If your umbrella employer does not pay you for the time that you have worked, it is likely that it would be in breach of the National Minimum Wage (Amendment) Regulations 2017.

What you need to do

If you’re working for an umbrella company on a contract with Carillion, or any other client in financial difficulties, our advice is to contact your umbrella as soon as possible. It’s in their interests to secure payment in full, and this is obviously the best outcome for you as well. The sooner they know about a potential issue, the better their chances of resolving it.

If you have questions about this issue, or if Orange Genie can help in any way, please contact our expert team on 01296 468 483 or email info@orangegenie.com.

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