Safeway Contractors to cover umbrella payroll costs for contractors
by Alan Little
In a groundbreaking move, a prominent supplier of specialist rail, engineering and construction services, Safeway Contractors, has announced that none of its temporary/contracting workers will need to pay umbrella companies for payroll services as it will now cover these costs on their behalf.
The Manchester-based firm is seeking to end the culture of ‘paying to be paid’ with the initiative, which will result in all of its contractors being better off by £30 a week.
Safeway operates as both a contingent labour supplier of highly skilled talent to time-limited projects and by subcontracting part or all of the project. It clearly recognises the value of compliant umbrella companies to its contractors, who receive all the statutory employment benefits via the umbrella that salaried employees are entitled to.
The company’s Director, Paul Walpole, said: “We are delighted to be spear-heading this new initiative in our sector which will see our temporary workers significantly better off each week.
“Paying for a service just to get paid is like an additional tax on temporary workers, and it can hit the pocket hard, especially for those who don’t have a fixed, regular income.
“We’re the first firm in our sector to do this and obviously, our workers are delighted at the news.”
From now on, he added, Safeway Contractors will cover the costs of umbrella payroll provision directly instead of requiring contractors to do so.
The development comes when most industry observers are expecting Chancellor Phillip Hammond to announce an extension of public sector IR35 reforms to the private sector in his November budget.
Writing recently for the staffing industry news source OnRec, employment law specialist Adrian Marlowe, who chairs the Association of Recruitment Consultancies, said that the reforms were almost certain to be announced, despite widespread opposition from representatives of the professional contracting and recruitment industry sectors.
If so, Marlowe believes a significant increase in the use of umbrella companies, as has already happened in the public sector, is highly likely.