FCSA: Contractors against joining public sector payroll

Friday 30 September 2016

Plans to put contractors onto the payroll in the public sector have been poorly received by the self-employed, a new study suggests.

Research from the Freelancer and Contractor Services Association (FCSA) found that 37 per cent of intermediaries who source (and/or support) contractors for public sector roles believe end-hirers will seek to place freelancers on agency payrolls. 

As well as this, 23 per cent of respondents suggested that companies sourcing contractors directly will be the most likely to seek to put them on their own payroll as temporary employees. 

Contractors put on the hirer payroll will be taxed as employees, though they will not be entitled to the same statutory benefits as regular workers, despite facing the same tax charges. 

Some 26 per cent of intermediaries reported that there is a higher chance of sourced workers being placed on fixed-term contracts by the client. 

The poll also revealed that 34 per cent of intermediaries report that contractors will not accept being payrolled, while 38 per cent stated that individuals will not accept fixed-term contracts as they do not wish to be employed by the hirer. 

Julia Kermode, chief executive of FCSA, said: “Our research has revealed a mismatch in thinking between contractors’ intentions and the options being considered by agencies and public sector hirers.  

“Contractors are simply not going to accept fixed-term contracts or being put on the payroll as temporary workers.”

She went on to say that many contractors are already not accepting public sector contracts after April 2017 as a result of the proposed changes, with several condemning false employment engagement tactics. 

Ms Kermode stressed that she is worried about the government’s intentions to “force the entire workforce to be employed”, explaining that she believes it is an outdated point of view that needs to be reviewed by the prime minister. 


By Victoria McDonnell

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