Becoming an employee of an Umbrella company

What is an Umbrella Company?

A Bar2 Umbrella Company is a company where:
- Many workers are gathered together within one company.
- That company supplies services to a particular type of client, employment agencies.
- The employee of the Umbrella company is employed under a special form of employment contract known as an "overarching employment contract".

What is an "overarching employment contract"?

An overarching employment contract is one which does not come to an end when a particular short term assignment ends. IE: If a person works for two weeks, then has a break of a week, then goes to another site, the employment contract persists. The alternative would be that the employment contract ends immediately the assignment ends.  This is why employment with an Umbrella Company is ideal for people seeking temporary agency work.

An overarching contract is one where there can be a series of short term engagements in different places, where there can be gaps, but where the employment contract does not come to and end because of these gaps.

Overarching contracts typically allow for variable rates of pay. If you examine an overarching employment contract you will see that it states there is no normal rate of pay but that the company decide how much it will pay an employee each week. The only constraint in the contract should be that the hourly rate will never be less than the National Minimum Wage.

Why is the contract so important?

It is important because it is that form of employment contract that allows the worker to claim travel related expenses. Without such a contract the company could not offset expenses before calculating an employees pay.

- It is implicit in an overarching employment contract that the employee's normal place of work is his home, enabling expenses to be claimed from home to work and back again.

- In the absence of such a contract the employees work site becomes his fixed place of work and travel from home to a fixed place of work is not deductible. So, if there isn't a signed contract, expenses should not be allowed.

Normal Employee benefits.

When you are an employee of an Umbrella company you have all the statutory rights that you would expect as an employee.  Deductions for PAYE and National Insurance are made from your gross wage continuing your entitlement to statutory benefits.  If you are off sick you need to call our office by 10am on your first day of absence.  More information regarding Statutory Sick Pay (SSP) can be found here.

You will also be given access to a stakeholder pension that we organise through Scottish Widows.