Regulating Umbrella Companies
According to the Government’s Factsheet there are around 700,000 individuals currently working through around 500 umbrella companies. Umbrella companies are payment intermediaries, typically found in complex agency worker/end supplier arrangements which make it difficult for workers to enforce their right to pay and other employment rights. Unlike temporary work agencies they are unregulated. Section. 36 of the ERA 2025 amends the definition of “employment business” within the Employment Agencies Act (EAA) 1973 and brings umbrella companies within the scope of the rules which govern the temporary labour market (the Conduct Regulations) and which are regulated by the Fair Work Agency. A consultation on modernising the regulatory framework of the temporary labour market closed on 1 May 2026. It is expected that umbrella companies will be regulated in 2027.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
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