Umbrella Reform Is Coming: Here’s How to Stay Compliant and Competitive

The landscape is shifting fast for recruitment agencies. As new legislation moves closer to formalising umbrella company definitions and pulling them into the scope of the Conduct Regulations, agencies need to take a fresh look at their payroll partnerships—and fast.

This isn’t just regulatory housekeeping. It’s a strategic reset.

At AGPayroll, we’ve always believed that compliance and clarity should be built in, not bolted on. These upcoming changes will demand that agencies tighten supply chains, scrutinise PSLs, and put transparency at the heart of their operations.

So, what’s changing?

• Umbrella companies are set to be formally defined in law—removing ambiguity.

• They’ll be regulated under the Conduct Regulations, bringing oversight to a space long vulnerable to misuse.

• Combined with the Employment Rights Bill, these changes signal a higher bar for compliance across the industry.

For agencies, this means doing your due diligence isn’t just smart—it’s survival.

What can you do now?

• Audit your PSL. Who are you trusting with your payroll? Are they audited? SafeRec certified? Do they provide monthly compliance reports?

• Communicate the value. Clients and contractors may not see what goes on behind the scenes, so be upfront about your commitment to safe, ethical payroll.

• Choose smarter partnerships. With AGPayroll, you get SafeRec real-time auditing, HMRC-integrated systems, and full transparency—built to stand up to scrutiny.

The agencies that act early and lead with confidence will be the ones who grow from this. Let’s make compliance your competitive edge.