To start a new contract as an umbrella company employee, you have to know how umbrella companies work. They act as intermediaries between contractors and client agencies, deduct taxes and National Insurance Contributions, and simplify administrative and financial responsibilities.
When you choose an umbrella company, they sign an agreement with your recruitment company, a contract of employment is signed between you, the umbrella company, and the worker, and you become an employee of the umbrella company.
You will need to provide a timesheet with hours worked and expenses, and the umbrella company will invoice your client agency and take care of taxes, NICs, and other deductions required by law. They charge a margin before paying you, and you will receive a payslip and reconciliation sheet for each payment.
Benefits of joining an umbrella company
Thinking about what type of benefits would be linked once you become an umbrella company employee? Don’t worry; we present you with some rational facts to let you think about them.
1. Statutory Employment Rights
When someone joins an umbrella company, they must be fully aware of their statutory and employment rights. It comprises several things: holiday pay, sick pay, and maternity/paternity pay.
2. Permanent HR Support
Another fantastic thing about becoming an umbrella company employee is that you would get assistance from a professional HR department that provides adequate guidance, especially when things don’t run smoothly. It includes everything from notice to pay disputes and even unfair dismissal.
3. Continuity of Employment
When someone has aligned the role of a contractor, he/she is also aligned with multiple end-clients and bears contracts simultaneously. But when you become an umbrella company employee, your employment will continue permanently and make it easier for you to get credited or even apply for mortgages.
Apart from having any selected provider, as an individual, you just need to ensure that you are covered. This is because many umbrella companies offer necessary insurance and allow one to carry out their work in a safe manner.
Some umbrella companies also facilitate health, life, and accident insurance schemes without extra cost. Moreover, you will also be covered by Public & Employers’ Liability Insurance and Professional Indemnity Insurance.
Are you clueless about getting a workplace pension?
You certainly don’t need to be anymore, as we will explain how you can reap the benefits of getting a pension. As an umbrella company employee, you would be easily enrolled into a pension scheme whenever you would join your contracted agency.
Your company will ensure that you will be available for automatic enrolment within some time after your joining. Apart from it, they would provide you with all the details about the entire process and also help you know how important it will be. Above all, you will get an assurance to get the claim of all the pension benefits just like other employees.
Would you carry the same rights as a regular employer?
As an umbrella company employee, your hiring agency will establish a contract with the umbrella company that includes details such as timely payment of agreed umbrella contract rate of pay and invoicing, your job title, position, notice period, and work areas.
You will have the same employment rights as any other professional employee, including a written contract and guidance on your work.
You are entitled to the National Minimum Wage and paid holidays, with holiday pay deducted from completed assignments and redeemable as paid leave.
In the end, we can conclude that by becoming an umbrella company employee, you would get benefits equivalent to any other employee. Apart from it, your scope of employment will also become permanent, indicating a stable career awaits your decision.