PAYROLL SECURITY
regulated so anyone can spring up and be an umbrella company, which means there is very little legal protection against preventing this happening in the first place.” Offpayroll.org.uk recently launched a new rating system for umbrellas called FairScore to highlight ethical, well-run companies and those that are rogue and campaigns for regulation in the sector (see Road to Regulation, p40).
Be commercial and compliant Janet De-Havilland (top right), founder and CEO of Pendragon Consultancy, which are experts in compliance and deliver a range of services in the temporary and contract labour market, is currently working with the authorities and the FCSA following the appearance of two apparent clones: Pendragon Consultancy Ltd Payroll Account Limited and Pendragon Consultancy LLP Ltd. Like Smith, she alerted people on LinkedIn and believes openly discussing it is important. “If we keep it all quiet, these people will be allowed to work under the cover
“If we keep it all quiet, these people will be allowed to work under the cover of darkness” of darkness and we all need to help to shine a light on it,” she says. “Also, if you’re a client, you would be disappointed if the first time you heard about this issue is when money has gone missing.” Pendragon carries out compliance audits for clients and she believes compliance lies at the heart of tackling this and other issues the sector faces. She adds that clients are often shocked when they see where the holes are in their processes and systems following an audit. Part of the challenge is that sometimes the person charged with the responsibility for due diligence and compliance isn’t as senior as they should be. Pluck
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agrees and notes that the fraudsters are often targeting middle grade employees of contractor recruitment agencies, perhaps knowing that senior directors will be on top of what transfer protocols are in place, and “thus smell a rat”. De-Havilland highlights another issue, too, which is that compliance costs rather than generates money. “When you go into some businesses and ask where compliance is in their hierarchy of importance, you can hear a nervous outburst of laughter,” she says. “Compliance teams are challenged all the time with the ‘we’ve got to get these people out to work, so let’s get on with it’ attitude. But if something goes wrong, things can become much more costly, and you potentially lose the client that you’re trying to help. You’ve failed in your due diligence, and you’ve failed the client.” The answer, she believes, is moving compliance up the agenda and her desire is to bring it “screaming and kicking” from the back office to ensure it’s on the table of “every senior manager and boardroom director”.
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