The furlough scheme for Umbrella workers had been flawed because of the argument around what should be classed as discretionary pay or not, which meant that due to lack of clarity in government guidance and the complex structure of the employment contracts, many Umbrella workers only received 80% of the NMW element of their pay. We felt their pain, but there was a potential risk to businesses from HMRC looking to recoup funds in the future from those who they might adjudged to have ‘overclaimed’ on furlough amounts e.g. 80% of NMW and discretionary bonus (without this being made clear in official guidance), thus potentially leaving companies to pay back a large bill further down the line. There needed to be a more uncomplicated option should the same topic ever arise again, with Umbrella companies getting some bad press.
Step forward the PEO model. The Professional Employment (PEO) model first became popular in the USA many years ago as a fully outsourced PAYE service that also offered employee’s additional benefits like access to free healthcare.
Workers have a simple what-you-see-is-what-you-get PAYE rate and a straightforward payslip to match, besides additional employee benefits. It is similar to the tried and trusted ‘PAYE-bureau’ service except the additional benefits are that we engage fully with the worker on an employment contract, plus calculate and process the payroll. This is a 100% outsourced service for direct PAYE, offering a multi-industry solution for all levels of pay grades and working arrangements.