What is an umbrella company?
An umbrella company is a business that acts as an employer for temporary workers (contractors and freelancers in the UK).
Acting as an employment intermediary between the client/agency and temporary worker – umbrella companies provide the temporary worker with employee status and take care of their payroll and a majority of administrative responsibilities.
Umbrella companies regularly pay temporary workers operating directly with a client or via a recruitment agency. This is because many clients/agencies don’t want to be responsible for processing their temporary staff’s payroll due to increased liability, administration, costs, etc.
For more information and a step-by-step example of how umbrella companies fit into the supply chain of temporary workers, please visit: How does an umbrella company work?