Orange Genie, a UK-based umbrella company, has been accused of unlawfully and systematically taking money from contractors for many years.

According to Contractor Voice, £2 per week had been incorrectly deducted and disguised on the payslip in the deduction called ‘Employment cost, including Employer National Insurance’, which was unbeknown to contractors.

“This deduction is consistently equal to the employer national insurance and a £2 additional masked deduction, which is invisible to contractors,” Contractor Voice stated.

SIA reached out to Orange Genie for comment and the umbrella firm said, “there are legal proceedings pending due to factual inaccuracies in certain reporting”.

Contractor Voice also called on the Freelancer and Contractor Services Association (FCSA) to remove Orange Genie from its list of members without delay; adding that all contractors employed by them should find a new umbrella, and that all agencies should stop working with them for the ‘benefit of contractors’.

SIA also reached out to the FCSA. The Association launched an investigation into the alleged breaches and issued a notice to terminate the firm's (which remained unnamed in its statement) membership. 

The Association provided a full statement on its LinkedIn page here. 

A report from Contractor Voice added, “The FCSA code of compliance clearly requires that ‘the pay reconciliation you [the umbrella company} provide to the employee transparently show an itemised breakdown of all employer costs, including but not limited to the Apprenticeship Levy.’ (FCSA Umbrella Employment code of compliance, A17, page 9) No doubt the aim is to give comfort to contractors that the individual elements and calculation are correct. However, none of the Orange Genie payslips that we have seen and audited include an itemised breakdown of the hidden £2 and only becomes visible following a payslip audit,” the report stated.

“Given the scale and years of skimming, Contractor Voice believes that investigating authorities must take a very close look at the Orange Genie payroll software as it will have been impossible to skim on this scale without bespoke software involvement,” the report stated.

According to Contractor Voice, its investigations continue to identify the payroll software developer, but added that this skim may have been purposely designed into the software algorithms so that exactly £2 can be automatically taken from every payment.

Contractor Voice audited payslips via SafeRec.co.uk dating back from 2017 to September this year, all of which have allegedly been skimmed from contractors. Contractor Voice estimates that Orange Genie have in excess of 8,000 contractors that they are payrolling each week, which if applied across the last five years suggests that the total sum of the skim could be in excess of £4 million.

Meanwhile, ContractorUK reported that, since the Orange Genie accusations, a ‘few agencies’ have removed the umbrella company from their PSLs (preferred supplier lists).

Contractor Voice also told ContractorUK that the ‘skimming’ it says Orange Genine did was ‘known about in the sector for a few weeks’ before it published the allegations.

In an interview with Freelance Informer, Contractor Voice founder Jacob Bellas said that the original audit was initiated after a number of contractors asked to have their payslips audited, and, as a result, several agency whistleblowers contacted Contractor Voice directly after they audited their workers’ payslips.

Contractor umbrella companies have also reportedly began to issue reassurances to their recruitment agency partners following the Orange Genie allegations.

Orange Genie provides a full range of support services to contractors and recruiters including Accountancy, Umbrella, Agency PAYE and CIS (construction industry scheme).

Orange Genie is also a business partner of the Recruitment and Employment Confederation. The REC’s business partners have been selected for their ability to provide relevant, quality services to its members.

In 2015, the REC and the FCSA announced a new working relationship. The relationship states that umbrella companies holding REC business partner status must have FCSA membership, and the professional body for the recruitment industry is advising its members to use only FCSA compliant contractor accountancy service companies.

‘The FCSA sets and maintains standards for umbrella companies via its compliance code and rigorous assessment of its members’ business operations by regulated accountants and lawyers,’ the announcement stated.

Staffing Industry Analysts reached out to the REC for comment. 

Kate Shoesmith REC Depty CEO said, “The REC condemns any actions by umbrella companies that hide information about deductions from payslips. Umbrellas should act in good faith and be transparent with their employees and this is why have repeatedly called on government to regulate how umbrellas operate. The FCSA are looking into whether Orange Genie has hidden any deductions. If the FCSA find that Orange Genie have acted wrongfully then we will immediately review our business partner agreement with them.”