Reflecting on the Government changes to prevent bogus self employment

C&D customer Number 8 Group Ltd. has reflected on the Government changes to prevent bogus self employment, more specifically, here is what one of their customers is doing about it:

You may be aware of a recent consultation paper issued by the government, focusing on ending bogus self employment within the construction and other industries. Whilst the consultation period will last up to eight weeks, it’s likely that the current set up of agencies and intermediaries supplying temporary self employed labour will change. Genuinely self employed people will not be affected however it remains to be seen exactly what the government define as genuinely self employed within the agency supply market.

It’s fair to say that construction companies of all sizes enjoy the flexibility of hiring self employed operatives from agencies, both from a cost and employment status perspective. In our opinion the industry would be in serious trouble if a significant proportion of the agency labour supplied came with the added cost of holiday pay, sick pay and employers NI not to mention maternity/paternity pay. This could add upwards of 25% to the actual cost of hiring in an operative, and this will have to be borne by either the operative, agency, contractor or end client.

This new legislation is due to take effect from April 2014 in some shape or form, which will be finalised after the consultation period has ended. So in four months from now, the way you hire in temporary labour could be very different and ultimately a lot more expensive. Having said that, there is a huge amount of issues and concerns to resolve, and as the government has gone through a similar exercise four years ago, the result could still be very little change.

At Number 8, we’re working with advisors to ensure we have a workable model by April 2014, whatever the outcome. We’re not sure what this model will look like at this point, however rest assured we will be reviewing every possible option in order for us to continue offering a cost effective labour supply service. We fundamentally understand that the recovery in the construction industry will only continue if a viable solution to this new piece of legislation is found, a solution that enables contractors to continue working competitively BUT within the new rules dictated by this legislation.

In the meantime it’s business as usual and we will keep you updated if there are any developments, and certainly inform you of our new model once finalised. Of course please don’t hesitate to contact us if you have any questions about these changes.

Thanks to Number 8 Group Ltd. for providing us with the above.