THE NHS must stamp out “umbrella companies” that are exploiting its workforce, health union Unite demanded yesterday.
The union said the response from NHS Improvement to previously raised concerns was “entirely inadequate” and called for a ban on companies that are ripping off health workers.
Government changes introduced in April effectively banned agency workers in the public sector from being paid on a non Pay As You Earn (PAYE) basis.
However, unscrupulous agency bosses have forced NHS workers to be paid via umbrella companies. Under this arrangement workers have to shell out to pay what should be their employers’ tax and national insurance contributions — and are frequently charged an administration fee to boot.
Umbrella companies have long blighted the construction industry with workers exploited on bogus self-employment contracts and bosses dodging their responsibilities — including holiday pay and sick pay.
The government estimates that at least 430,000 people are employed via umbrella companies but Unite says the figure is likely to be much higher.
NHS Improvement — the body responsible for NHS Trusts — has admitted being aware of some umbrella organisations working outside of tax rules. It said: “NHS Improvement has stated through the agency programme that we do not encourage the use of personal service companies or umbrella payment methods within trusts and have encouraged the use of PAYE mechanisms.”
The body claimed it was working with HMRC “to get a clear message on these unlawful practices.”
But Unite national officer Colenzo Jarrett-Thorpe said: “Despite the warm words from the NHS their response is entirely inadequate. Workers are being ripped off and exploited and [NHS Improvement’s] message is essentially that it is down to individual trusts if they allow umbrella companies or not.
“It is especially alarming that the NHS is aware that there are illegal umbrella companies operating in its environs and they are still not prepared to ban them.
“Umbrella companies are simply parasites feasting off workers’ wages. Although they are not technically illegal they are certainly immoral.”
He said Unite planned to target NHS trusts that use umbrella companies, calling for them to stop and repay workers’ money that they have lost.