Umbrella companies are rather like any other business especially when it comes to suffering from bad management, changes in legislation and changing market conditions. These corporations can go bankrupt in any of these eventualities. And when this happens, the contractors are the last ones to find out about it. The other creditors will always be preferred.
Therefore , the contractors have to safeguard themselves against anything like that. They are going to have to identify the signs that can likely tell about a company running improperly. Likewise, there are signs that will tell if a company is going to face issues when the proposed changes in legislation get approval from the Parliament. As a contractor, you have got to look for these signs.
When you use umbrella company, you become an employee of the company. If a company does not offer you a worker contract, then it isn't the company to go for. You have to be a true employee so as to stay safe in scenarios like the ones discussed above.
When you use an umbrella company, you become a worker. This implies that you ought to be paid even when you are not in a contract since you become employee of the company once you sign a contract with it. The companies will probably top-up their charges to get to the minimum wage. If a company does these practices, then you never know what number of other laws the company is flouting.
Ultimately, a good umbrella company must take the responsibility to pay you in case the client becomes bankrupt. If your umbrella company does not say in its terms and in the contract, they need you to sign, then you need to avoid using that umbrella company. You will always face the specter of not being paid since the clients frequently go bust in troublesome financial situations.
About the Author:
Greg Dickson is head of marketing for the Bedouin Group, one the leading suppliers of umbrella company solutions for contractors and self employed staff. Bedouin Money also supplier contractor mortgages, contractor tax calculator and annuities.
