Recruiters: Why do Umbrella Companies Conduct Right to Work Checks?

Getting your contractors registered with an umbrella company should be relatively simple, but there are some things that the umbrella absolutely must do before they can pay your contractors for the first time, even if they result in frustrating delays. In this article we’ll cover the one that causes the most queries among contractors and recruiters – right to work (RTW) checks.

What is a right to work check?

Whenever a UK employer takes on a new employee, they are required to check the employee’s identity and confirm that they have the right to work in the UK. For most employers, this will mean meeting the new employee in person and physically checking their documents. Umbrella companies are likely to have implemented an online solution, because they will usually be unable to conduct an in-person meeting with every new employee.

Why are right to work checks important?

RTW checks are a legal requirement, and generally speaking, a good umbrella company will comply with the law simply because it’s the right thing to do. As a recruiter you should look for this attitude to compliance in your umbrella company partners, because it protects them, you and your contractors from a whole host of risks.

If your umbrella company partner seems particularly inflexible about their RTW process, this is probably due to the risks and potential penalties for non-compliance.

Failure to complete the necessary RTW checks could cost the umbrella up to £45,000 per illegal worker for a first breach, and up to £60,000 per illegal worker for repeated breaches. Given that an umbrella company can employ and pay thousands of contractors in any given week, they obviously need a robust process for checking RTW.

How do umbrella companies handle right to work checks?

Most umbrella companies are unable to meet with each new employee in person, or physically check their documents, so they will have implemented an online process. In most cases this will involve using an identity service provider to complete an online identity and RTW check.

The most common solution is to ask the worker to take a “live photo” with their documentation, so their identity can be verified using specialist software.

How can you prevent delays?

Because it needs to be completed for every new employee, bottle-necks and errors will cause significant problems and you can therefore expect your umbrella’s RTW process to already be as simple and flexible as they can make it. Your contractors simply cannot be employed and paid until the process is complete.

The main thing you can do as a recruiter to prevent delays is to set your contractor’s expectation, to ensure they know the check will be necessary and that they treat it as important.

If you have questions or if we can help in any way, please call our expert team on 01604 360222 or email [email protected].