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News » UK » More than a million now on CIS » published 1 Aug 2017

More than a million now on CIS

Nearly half of the entire construction industry workforce is paid through the Construction Industry Scheme, latest figures reveal.

In 2016/17 at least 1,076,000 construction workers were paid via the Construction Industry Scheme (CIS), an 8% increase on the figure of 12 months ago when 992,973 were paid via CIS. In total 47% of the entire construction workforce is now paid via CIS.

The figures were obtained by the Unite union through a freedom of information request. Unite said that the growth in ‘self-employment’ in the industry was further evidence of the case for reform and how previous attempts had failed. In 2014 the government introduced measures that barred construction workers operating via employment agencies and payroll companies from being classed as self-employed.

CIS is the stand alone tax system for construction workers. Workers paid via the scheme are normally officially classified as self-employed although many have all the employment characteristics of an employee but are denied even the most basic employment rights such as holiday and sick pay and they can be instantly dismissed without warning.  Unite calls this ‘bogus self-employment’.

The union says the principal beneficiaries of the system are employers who avoid paying employers’ national insurance contributions of 13.8% and benefits such as holiday pay.

Unite assistant general secretary Gail Cartmail said: “These figures demonstrate that bogus self-employment in construction is out of control. Employers are simply ignoring the rules in order to line their pockets and deny workers their rights.”

The government’s 2014 reforms led to an increase in workers being paid via payroll (or ‘umbrella’) companies, which results in the worker having to pay both employers’ and employees’ national insurance contributions as well as a plethora of other deductions from their wages. The government has previously estimated there are 430,000 workers being paid via umbrella companies, the majority of whom work in construction.

The government’s recent Taylor Review into the gig economy – motivated more by the plight of Uber drivers than the construction industry – called for clarity in self-employment but failed to address how existing Treasury policies are promoting bogus self-employment and causing worker exploitation, Unite said.

Gail Cartmail added “We have huge numbers of construction workers being routinely exploited via the government’s own tax scheme and via umbrella companies and yet the Taylor Review has ducked these issues.

“Taylor talks about his seven principles for fair and decent work which includes workplace training and the health and wellbeing of workers but while the real employer can continue to divest themselves of their workforce and have no responsibility for them, his principles are nothing but warm words.

“The only way that workers will be treated fairly and decently is by introducing clear rules which ensure that workers are either genuinely self-employed or paid by a standard PAYE method. Without such a reform productivity in construction will remain low, accidents and ill health will be high and the industry will fail to train sufficient numbers of apprentices.”

 

 

MPU

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This article was published on 1 Aug 2017 (last updated on 1 Aug 2017).

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