When you register with an umbrella company, you become an employee of theirs and can benefit from continuity of employment. Please continue reading to discover what continuity of employment is and what it means for umbrella company employees.
What is continuity of employment?
Most umbrella company employment contracts are written to be overarching, which means the employment relationship between a contractor and the umbrella company continues even once an assignment ends. One of the main benefits is that it allows a worker to maintain continuous employment across all assignments, even when there are gaps between them. Contractors can also move from assignment to assignment, work on multiple assignments alongside each other or even accept assignments with different agencies. You will be seen as one umbrella company employee, and your tax code won’t be negatively affected as there is a continuous payroll link between assignments.
Are there any other benefits of continuity of employment?
Demonstrating continuity of employment can be helpful for contractors when applying for a loan and makes referencing for mortgages or credit much more accessible. A minimum period of continuous employment is also required for certain employment rights, such as maternity and paternity pay entitlement. If you change umbrella companies each time you secure a new contract, you will not get this benefit and will not be protected by certain employment rights.
When would a period of continuity of employment start and end?
Continuity of employment begins when you start your contract with the umbrella company. For example, if you registered with the umbrella company on the 23rd of September 2022, your period of continuity of employment would also begin then.
There will be times during your employment when you may have extended time away from work for the following reasons. It is important to note that these will not impact your continuity of employment:
- Periods of annual leave, maternity and paternity leave and sick leave.
- If you are absent from work due to a ‘temporary cessation of work’. For example, the workplace has been damaged by a fire or is deemed unsafe.
- When an employee is dismissed on the ground of ill health (provided they are re-employed on a new contract within 26 weeks).
However, continuity of employment is deemed broken when there is a clear break of one week (usually measured from Sunday to Saturday) between two different employment contracts. For example, if you notified your current umbrella company of your intention to leave and requested your P45, this would break your period of continuity of employment.
Register with an FCSA accredited umbrella company today
Umbrella Company UK is a leading FCSA-accredited PAYE umbrella company backed by professionals with over 20 years of experience in contractor payroll. Our umbrella service is simple, straightforward, and by far the easiest way to get paid – whether you are a first-time contractor, working on short-term assignments or accepting assignments inside IR35.
Get in touch with us today to find out how Umbrella Company UK can make your contracting journey stress-free. Please give our expert Sales Consultants a call on 01707 669023 or request a call for a time that suits you.
