Regulation of umbrella companies

Implementation date: Expected 2027

Umbrella companies will be regulated by the Fair Work Agency. 

The Employment Rights Act 2025 includes provisions to expand the definition of "employment business" under the Employment Agencies Act 1973, to allow for umbrella companies to be regulated.

The measure was announced in the response to a consultation on Tackling non-compliance in the umbrella company market. The consultation sought views on "the most effective way to address issues of tax and employment rights non-compliance by umbrella companies".

The Government has confirmed, in Implementing the Employment Rights Bill: Our roadmap for delivering change, that these measures will take effect in 2027. The Fair Work Agency (which is due to be established in April 2026), will take over regulation of employment businesses from the Employment Agency Standards Inspectorate.