Tag: HIVE360

TUC should be lobbying for statutory compliance

According to HIVE360, the recent blanket on umbrella companies will escalate the current war on talent and worker shortages, put pressure on pay rates and penalise both good and bad operators. The government’s call for evidence invites views from stakeholders on the role that umbrella companies play in the labour market, and how they interact with the tax and employment rights systems. It sets out the concerns that have been raised by some stakeholders, as well as government action already taken to tackle tax non-compliance and improve protection for workers, and closes on 22 February 2022.

David McCormack, CEO of HIVE360 has stated that the government’s current call for evidence on the umbrella company market – recruitment companies in particular – are already reeling from the effects of Brexit and the pandemic and the consultation’s timing could not be worse.

McCormack said: “A ban would penalise legitimate transient workers. It would put immense pressure on pay rates for umbrella workers, who struggle to understand the implications and will seek their current rate of pay as a PAYE rate, meaning higher pay rates that many companies simply can’t afford at this time. For the recruitment sector, this would mean vastly increased processing costs – which their clients would understandably be unwilling and unlikely to pay to cover the higher labour costs.”

McCormack, who has first-hand experience of the various payroll models used today and was the head of his own umbrella business before setting up HIVE360, believes that there is widespread misunderstanding of all umbrella companies, and people are tarnishing all umbrella businesses with the same brush. Commenting further, David said:

“The proposed total ban on the use of umbrella companies, would be a sledgehammer to crack a nut. Rarely does a blanket approach address the real issues, and an all-out ban on umbrella companies would be no exception. The TUC doesn’t appear to understand the roll of umbrella companies, or that there are multiple types. Rather than lobbying government for a total ban on their use, the TUC should be lobbying for statutory compliance and an independent statutory body that administers and polices clear rules and consequences, and which governs the industry in an effective, consistent and unbiased way.”

He added in a statement: “Companies have to take part in the government’s call for evidence on umbrella companies, which closes on 22 February. They must understand that HMRC doesn’t appear to be effective in curbing the multitude of ‘mini’ umbrella companies, which is the side of the industry that predominantly gets the whole industry a bad name, and involves the use of multiple companies to access multiple amounts of employers NI allowances and effectively removes the obligation to pay one of employment’s core statutory taxes.

“IR35 has tried to address this – but failed.  The simple solution is to require the end user and the recruitment agency to answer one simple question (and this could apply to labour only supplies or all agency supplies only) that simply asks: ‘Are you accessing the employers NI allowance yourselves or is your NI bill over £100,000?’ If the answer is yes from either party, then the agency should be liable for any unpaid employers NI.”

Share this article on social media

By David McCormack, CEO, HIVE360

Looking after the welfare of the business and its workers is not only beneficial for performance and profitability, it is a legal requirement in a growing number of sectors like the fresh produce, food packing and processing industries that are governed by employment standards regulated by the Gangmasters & Labour Abuse Authority. Recruitment agency outsourced PAYE payroll, wellbeing and benefits provider, HIVE360, is a GLAA license holder.

The Gangmasters & Labour Abuse Authority (GLAA), is a Non-Departmental Public Body of the UK Government, and a national enforcement agency whose role is to protect workers from labour exploitation.

The GLAA began in April 2006 after the horrific deaths of Chinese cockleshell pickers in Morecambe Bay. Since then, it has regulated businesses providing workers to the fresh produce supply chain and horticulture industry, to ensure they meet the exacting employment standards required by law. It investigates reports of unlicensed trading, worker exploitation, illegal labour provision, and offences under the National Minimum Wage and Employment Agencies Acts.

Despite the incredible work of the GLAA, its latest figures are concerning – the number of potential victims of exploitation more than doubled last year to 15,186.

This is far from okay. We believe everyone deserves the best work:life experience, to feel safe at work, and to never be exploited. These values have been the foundation for building HIVE360, and our GLAA licence is central to how we work with and support our clients, strategic partners, and labour providers, and to our own workplace policies. Currently, HIVE360 is one of around 1000 active GLAA licence holders, and we are all subject to regular compliance inspections on health and safety, accommodation, pay, transport and training standards. Non-compliance will result in the GLAA revoking the licence.

People-first

Many of the UK’s leading temporary worker recruitment agencies, operating extensively in the GLAA sector, work with HIVE360 to provide vital welfare support and transparency of pay. Earlier this year, we launched a unique strategic partnership with Rocket Software, which provides temporary workers software to around 300 temporary worker recruiters, and payroll and accounts software solutions to 60,000 key workers.

At the time, the company’s MD Danny Steel was clear about the significance of HIVE360’s GLAA license: “We have been looking for a strategic partner in the employee benefits space and found HIVE360 innovative, collaborative, progressive and creative.  As a GLAA license holder with much experience in this vital sector, we felt HIVE360 a really good fit.”

An embedded employee/candidate engagement strategy that looks after payroll and people continues to take an important part in candidate retention and attraction rates.

On-the-go engagement in hand

As well as being an expert in recruitment agency PAYE outsourced payroll, HIVE360 goes further to add value to candidates’ experience, with our unique customisable engagement app Engage.

Provided as a standard element of our outsourced payroll solution, Engage gives employees and temporary workers access to a range of health and wellbeing benefits and services:  24/7, confidential access to mental health support, counsellors and GPs, a personal doctor, support helpline and care support, gym memberships, high-street, lifestyle, dining and insurance discounts, a training platform, along with a secure digital payslips portal and a real-time workplace pension dashboard to support employees’ financial wellbeing.  To find out more, visit www.hive360.com.

Share this article on social media

By David McCormack, CEO of HIVE360

Recruitment businesses are wrestling with how to cover the increased costs following the IR35 changes that took effect last month. An outsourced PAYE model is the solution as both recruiters and their workers will be financially better off.

Following a year of COVID-19-related delays, IR35 changes kicked-in last month. To comply, recruitment businesses have three options: set-up an in-house payroll facility, cut workers’ pay, or outsource payroll to a recommended PAYE, compliant specialist.

The cost of IR35

The new off-payroll rules mean there is more tax to pay.  Umbrella companies charge recruiters for administering payroll, at an average £20 per worker per week – so that’s around £1,000 per worker a year, based on an £18,000 salary.

An in-house payroll also carries additional costs – we estimate a recruitment company with 400 workers should plan for an additional £30,000 each year in administration and resource costs.

To cover these and the additional tax, recruitment business must either ‘absorb’ the financial hit, or pass the costs on to workers in the form of a pay cut, which, if using an umbrella model, would have to be at least five percent to cover the additional costs.

If agencies offer workers a fair, comparable PAYE rate, workers are financially better off being paid this way. When you deduct the weekly fee and all costs of employment going through an umbrella company, and see the real ‘take-home pay’ for workers, you have to ask if the vanity of a higher umbrella rate (and we all know it’s not really a higher pay rate) is stopping recruiters moving workers to PAYE, which is the ‘IR35 safe solution’.

The cost-savings of outsourcing PAYE payroll to a compliant provider speak for themselves:

  • > Recruiters outsourcing temporary workers’ PAYE payroll to Hive360 report savings of £100 or more per worker in the first year.
  • > A temp agency with 2,000 PAYE temps could see a return of £200,000 per annum.
  • > An employer with 100 employees could achieve a bottom-line return of over £10,000.

Added benefits on-the-go 

HIVE360 is an expert in recruitment agency PAYE payroll including those governed by the GLAA (Gangmasters and Labour Abuse Authority). We are also specialists in wellbeing and benefits provision – and bring all this together in one powerful and unique solution: Engage.

Recruiters that outsource their PAYE payroll to HIVE360 gain automatic, complimentary access for all pay-rolled workers to this employee digital health and wellbeing app.

The app’s features include a personal doctor, personal support helpline, care support, and gym memberships, thousands of high-street and online lifestyle, dining and insurance discounts, mobile phone savings, online training resources, and GDPR-compliant pay and pension information such as digital payslips and a real-time workplace pension dashboard.

Recruitment businesses using Engage record worker engagement levels of over 80%.

Recruiters’ choice

By bringing recruiters’ candidate and HR systems seamlessly together in one mobile experience, and by working closely with our team, Engage delivers customised, accurate, on time and fully transparent agency worker pay, whilst creating significant cost savings on PAYE Payroll and Pensions Administration, as well as improving internal process efficiencies and reducing overheads.

Dean Nixon, Commercial Director of First Call Contract Services told me: “Operating extensively in the GLAA Sector means our business has a big commitment to the welfare of our workers. Our decision to launch a new engagement platform with HIVE360 during the global pandemic was an easy one. By giving our temporary workers access to a mobile app that provides immediate GP services, mental health counsellors, pay and pensions information, means we’re helping to support and protect them ‘on the go’ and can give them immediate access to vital information.”

Tricia Hay, MD of First Base Employment added: “I’m really passionate about making sure we consistently uphold high standards in what is a highly competitive recruitment market, especially in the way we treat and look after our temporary workers. Partnering with HIVE360 has allowed First Base to really take welfare and benefits to an exemplary level for all of our valued candidates and our own staff.”

Speaking about its partnership with HIVE360, MD of Rocket Software, Danny Steel, said: “We had been looking for a strategic partner in the employee benefits space and after reviewing numerous potential partners, we found HIVE360 innovative, collaborative, progressive and creative. Their mobile-based tech easily integrates with our TempID+ software and Pocket Rocket app, and as GLAA license holders with much experience in this vital sector, we felt HIVE360 was a really good fit for us, and so they became the obvious choice for our preferred strategic partner.”

Specialist employee benefits and outsourced payroll provider, GLAA license holder and Inspiring Workplaces corporate member, HIVE360 is championing a new model of employment administration in the UK market, and redefining employment and pension administration processing.  For more information, visit: www.hive360.com  

Share this article on social media