If you work through an umbrella company, that umbrella is your legal employer. Employment law applies to you through your umbrella company employer, just as it would for any other employee.
This article explains what you’re entitled to, when those rights start, and who enforces them now.
What rights do you have as an umbrella contractor?
You get statutory employment rights from day one. That includes the National Living Wage, paid holiday, sick pay, and protection from discrimination. Pension auto-enrolment applies if you meet the age and earnings conditions. You’re not self-employed. You’re an employee of the umbrella company, and the law treats you that way.
The umbrella is your employer of record. It runs your payroll and deducts tax and National Insurance. It also handles statutory payments such as sick pay and maternity pay.
Your rate from the agency is known as the assignment rate. The umbrella takes its margin from that amount. What remains is your gross pay before deductions. Use the umbrella company take home calculator to see what your take-home should look like.
You can also check a compliant umbrella’s obligations under triple accreditation.
What rights do you have from day one?
From day one, you’re entitled to the National Living Wage (£12.71/hour from April 2026). You also get a written statement of employment particulars, Statutory Sick Pay, and protection from unlawful deductions and discrimination. Pension auto-enrolment applies if you meet the age and earnings conditions.
You also build up paid holiday from day one. That’s 5.6 weeks a year, including bank holidays. Your umbrella has to accrue and pay this correctly.
The Employment Rights Act 2025 also changes the unfair dismissal rules. From 1 January 2027, the qualifying period for ordinary unfair dismissal falls from two years to six months.
What changes after 12 weeks?
After 12 continuous weeks with the same hirer, you gain equal treatment rights under the Agency Workers Regulations (AWR). That means the same basic pay, working hours, rest breaks, and annual leave as a comparable permanent employee.
This is the key milestone in the AWR framework. “Continuous” means working for the same hirer through the same agency chain. Short breaks do not always reset the clock.
Day-one AWR rights apply from the start too. These cover on-site facilities such as canteen access, parking, and job vacancy notices.
Read the full breakdown of agency worker rights under AWR.
Can you opt out of the Conduct Regulations?
Yes, under the current rules, if you and your umbrella both agree. You both tell the agency before it puts you forward. The agency can’t make an opt-out a condition of work. You can’t opt out at all if your work involves children or vulnerable adults.
The Conduct of Employment Agencies and Employment Businesses Regulations 2003 set the rules for agencies. They cover clear terms, fees and checks before you start. You’re covered by default.
You can cancel an opt-out at any time. If you cancel mid-role, your cover comes back when that role ends.
Read our guide to the Conduct Regulations and opting out (PDF) before you agree to an opt-out.
What are your holiday pay rights?
You’re entitled to 5.6 weeks of paid holiday per year. Your umbrella must calculate this correctly and show it clearly on your payslip. Holiday pay is either accrued and paid when you take leave, or rolled up and paid in each wage payment.
Rolled-up holiday pay is legal for irregular-hours workers under the 2024 regulations. But the holiday element must still appear separately on your payslip. If it’s hidden inside your rate with no breakdown, that’s a problem.
The Employment Rights Act 2025 adds new record-keeping duties for holiday pay. Umbrellas must keep accurate records of entitlement and payments. This duty started in April 2026.
Get the full picture on holiday pay for umbrella workers.
Who enforces your rights now?
The Fair Work Agency (FWA) launched on 7 April 2026. It now brings state enforcement of pay and agency rules together. It took over from the Employment Agency Standards Inspectorate. HMRC still delivers NMW enforcement for it until April 2027.
Before April 2026, enforcement was split across several agencies. That made complaints slow and confusing. The FWA is bringing those together in stages.
It covers NMW and employment agency standards, with holiday pay enforcement expected from 2027. Report minimum wage underpayment to HMRC. Report employment agency breaches to the FWA.
The FWA is already operational and taking complaints now.
Read the full guide to what the Fair Work Agency covers for contractors.
What does the Employment Rights Act 2025 change for umbrella contractors?
The Employment Rights Act 2025 brings three key changes for umbrella contractors. They are six-month unfair dismissal protection, guaranteed hours for zero-hours workers, and new holiday pay record duties. The record duty started in April 2026. The government has not announced the zero-hours date.
From 1 January 2027, the qualifying period falls from two years to six months. After six months, an umbrella will need a fair reason to dismiss you.
Zero-hours and low-hours workers will get a right to guaranteed hours, if they want them. The government has not announced when this starts.
Holiday pay record-keeping puts a legal duty on umbrellas to keep accurate records of leave entitlement and payments. Underpaid holiday has long been a problem in the sector. ERA 2025 makes it harder to hide.
These changes apply to you through your umbrella. A compliant umbrella will put them in place on time. If yours doesn’t, contact Acas for advice.
What to do if your rights are being ignored
If your umbrella is underpaying you or breaching your employment rights, you do have options. Start with the umbrella’s complaints process. If that fails, contact Acas for advice on your options, including an employment tribunal.
Keep records. Save every payslip. Note any gap between what you were promised and what you were paid. An unexplained drop in your rate can be an unlawful deduction.
If your umbrella holds a compliance accreditation, you can complain to that body too. DASA holds accreditation from the FCSA, Professional Passport and SafeRec. That means three independent bodies check DASA’s processes.
Check the FCSA, Professional Passport and SafeRec accreditation for details on what those accreditations cover.
