If you’re a recruiter and you manage contractors, you’ll know that sometimes you just need to get someone paid right away. Depending on the situation, asking the umbrella company to make an advance payment might be the best way to solve it. In this article, we’ll look at the issues surrounding umbrella company advance payments.
Why your contractor might need an advance
There are any number of reasons why your contractor might be having a financial emergency. The only thing we need to know for the purposes of this article is that the normal payment process will see your contractor receiving money too late, and you need to help them.
This could be because they have an emergency in their personal life, or it could be because something has been delayed at the client, your agency or the umbrella company.
What the umbrella company will need from you.
The umbrella company will want to help you and your contractor, but they need to ensure they don’t overpay, either by making a payment that isn’t due or by paying them too much.
If the normal payment process isn’t followed, there’s an increased risk of errors and while an underpayment is relatively easy to resolve, overpayments can cause huge problems, particularly if the contractor is under financial pressure.
A good umbrella company will have an emergency advance process, designed to ensure the contractor is not paid money that will later need to be recovered. It’s important that this process is followed, regardless of how urgent the emergency is from your contractor’s point of view.
What happens next?
Once the advance has been paid, the normal payroll process will usually by followed and the advance will be recovered. Depending on the value of the advance, there may or may not be a further payment due to the contractor.
Looking after your contractors
Contractors accept that their pay will vary depending on individual contracts and the hours they’ve worked, but this can leave them vulnerable. A regular pattern of requesting advances may indicate that your contractor is dealing with an underlying issue, and there may be something you can do to help.
If your contractor is employed by Orange Genie, they will have access to general financial advice through our wellbeing service, and specific advice and counselling through our employee assistance program. Both are available at any time through their Orange Genie Companion app or portal.
If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.