New laws to stamp-out false self employment came into force yesterday. The move could see at least 200,000 workers receive less in their pay packets as the terms of their employment change.
Directly employed workers earn less than self employed but enjoy other benefits like proper sick and holiday pay.
Experts predict the average worker will be at least £24 a week worse off under the new regime. One said: “Site workers will find out this week exactly how new arrangements work and they’re bound to be unhappy if they get less money in their pockets.”
The Enquirer understands that unrest has already broken out on a number of M&E jobs over the crackdown. The source said: “This will have massive implications. Contractors are facing cost hikes on existing jobs so they will try and snipe some back from the workers. Or they will try and keep them self employed via some manufactured arrangement with payroll firms but that will still end up costing the lads on site.”
The crackdown has split the construction industry.
Many contractors are happy to see the change to create a level playing field and support firms who already employ their workforce directly. But others fear the cost increases could bankrupt some firms while payroll companies and some labour agencies face a very uncertain future.
Payroll firms are setting-up new umbrella companies in a bid to side-step the crackdown. But one industry watcher said: “The tax authorities aren’t kidding this time and will go after anyone trying to get around this.”