ABSTRACT
This chapter examines the role of umbrella companies, which represent an ‘innovative’ mechanism in construction that allows some companies to avoid paying tax or national insurance contributions by effectively passing these costs on to workers. These umbrella companies sit at the intersection between labour exploitation and financial-related crimes such as tax evasion. In the UK, umbrella companies expanded as a direct consequence of government policy that was intended to address false self-employment, but due to its haphazard implementation has arguably made matters worse. Simply put, construction companies benefit by saving money on tax contributions, building contractors get to hire workers more cheaply, yet workers see reductions in their take-home pay. For this reason, trade unions have referred to umbrella companies as a ‘con-trick’, and this represents a growing concern in the construction industry, which already contains large numbers of precarious, self-employed workers. Umbrellas are compared to other forms of non-UK state- and private-led agencies and subcontracting practices such as the posting of workers. Since umbrella companies do not operate in a vacuum, they are situated within a number of differing employment models, each of which has implications for the way in which labour is recruited and managed during projects. Hence, this chapter highlights types of work and employment in the construction industry and industry patterns that might fuel and/or mitigate harmful practices.
