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 full statutory employment rights from day one. That includes the National Living Wage, paid holiday, sick pay, pension auto-enrolment, and protection from discrimination. 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, pension auto-enrolment, Statutory Sick Pay, and protection from unlawful deductions and discrimination.
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 strengthened day-one rights. Unfair dismissal protection is being phased in from day one, replacing the old two-year qualifying period. The rollout takes place across 2026 and 2027.
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.
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. Implementation runs through 2026 and 2027.
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’s the single enforcement body for umbrella contractor rights. It replaced HMRC’s National Minimum Wage team and the Employment Agency Standards Inspectorate.
Before April 2026, enforcement was split across several agencies. That made complaints slow and confusing. The FWA puts everything in one place.
It handles NMW complaints, holiday pay enforcement, and employment agency standards. You can report an umbrella that underpays you or breaches your rights directly to the FWA.
Full holiday pay enforcement powers are expected from 2027. The FWA is already operational and taking complaints now.
Read the full guide to what the Fair Work Agency means 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: day-one unfair dismissal protection (phased in), the right to request predictable hours, and new record-keeping duties on holiday pay. These changes roll out in phases across 2026 and 2027.
Day-one unfair dismissal protection removes the two-year qualifying period. Once this is in force, an umbrella can’t dismiss you without a fair reason from day one.
Zero-hours protections give workers on variable hours the right to request a predictable work pattern. You submit a formal request, and the umbrella must consider it and respond.
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 the FWA.
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, escalate to the Fair Work Agency or 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 audit DASA’s processes. It’s the strongest compliance signal available.
Check the FCSA and Professional Passport accreditation for details on what those accreditations cover.
