On 6 April 2026, new rules governing labour supply chains will take effect, including stricter regulations around umbrella companies. For those involved in procurement, HR, recruitment, and talent acquisition, understanding these changes is essential. The upcoming legislation will affect how organisations engage contingent workers and manage compliance, making it vital to stay informed and prepared.
Overview of the new legislation
The revised regulations aim to strengthen oversight within labour supply chains. Key among these is the inclusion of umbrella companies under a new compliance framework.
From 6 April 2026, organisations must ensure that every link in their supply chain, including umbrella companies, meets updated legislative requirements. This encompasses clearer documentation, greater transparency in payroll arrangements, and enhanced due diligence.
Umbrella companies act as employment intermediaries, hiring workers on behalf of agencies and end clients. Under the new measure, recruitment agencies will be held responsible for administering Pay As You Earn (PAYE) and Class 1 National Insurance Contributions (NICs) on payments to individuals provided through umbrella companies. If there is no agency involved, the obligation will rest with the end client organisation.
The goal is to protect workers’ rights and reduce risks associated with non-compliant supply chain partners.
Implications for labour supply chains
For procurement, HR, and recruitment professionals in the public sector, these changes mean adapting processes to guarantee compliance. The inclusion of umbrella companies may require reviewing current contracts, verifying supplier credentials, and ensuring that payroll arrangements are transparent and fair.
Talent acquisition teams will need to consider how these regulations affect candidate engagement and onboarding. The legislative shift is designed to promote ethical workforce management and reduce exposure to potential risks.
Preparing for change
To prepare for the new rules, organisations need to map their supply chains and identifying all umbrella company relationships. It’s important to update policies and procedures to reflect legislative requirements, train staff on compliance, and communicate changes with suppliers.
For suppliers working with partners, they will need to follow approved umbrella lists for any umbrella engagements.
Conducting regular audits and keeping thorough records will support ongoing compliance. By taking these steps, organisations can safeguard their operations and workforce.
Contact Comensura
If you’re seeking guidance or support in navigating these changes, Comensura is ready to help. Our team can assist with compliance reviews, supply chain mapping, and workforce management strategies tailored to every organisation’s needs. Contact us today.
