Contractor rights
Know your rights. Protect your pay.
Under the Conduct of Employment Agencies and Employment Businesses Regulations 2003, you have the legal right to choose which umbrella company you work through. No agency can force you onto a specific provider.
At a glance
You can choose your own umbrella company
Agencies cannot withhold work for using a compliant umbrella outside their PSL
You cannot be subject to detrimental treatment for your choice
You can report violations to the Employment Agency Standards Inspectorate
Your rights under the Conduct Regulations 2003
Three protections every contractor should know.
Freedom to choose
You have the right to choose which umbrella company you work through. Agencies can maintain a Preferred Supplier List (PSL), but they cannot legally restrict you to only using companies on that list.
Conduct Regulations 2003
UK employment law
No withholding of work
An agency cannot refuse to put you forward for work, withhold payment, or delay your assignment because you choose a compliant umbrella company that is not on their PSL.
Conduct Regulations 2003
UK employment law
No detrimental treatment
You cannot be subjected to any form of detrimental treatment — including being passed over for roles, receiving worse terms, or being pressured — for exercising your right to choose.
Conduct Regulations 2003
UK employment law
What is a PSL and why does it matter?
A Preferred Supplier List (PSL) is a list of umbrella companies that a recruitment agency has pre-approved. Agencies use PSLs to streamline payroll and reduce their compliance risk.
PSLs serve a legitimate business purpose, but problems arise when agencies use them to restrict contractor choice. Some agencies pressure contractors into using a specific umbrella — often one that pays the agency a referral fee — rather than allowing the contractor to choose the best option for their own circumstances.
This practice can lead to contractors paying higher fees, receiving worse service, or being placed with non-compliant providers. The Conduct Regulations exist specifically to prevent this.
PSL compliance alert
We have noted an increase in agencies attempting to enforce restricted PSLs. If you have been told you must use a specific umbrella company or risk losing an assignment, this may be a violation of the Conduct Regulations 2003.
What agencies cannot do:
What to do if your rights are violated
Four steps to take if an agency is pressuring you.
Document everything
Keep records of all communications where you were told you must use a specific umbrella company. Save emails, note dates, times, and the names of everyone you spoke with. This documentation is essential for any formal complaint.
Clarify your rights
Politely inform the agency that under the Conduct Regulations 2003, you have the right to choose your umbrella company. Quote Regulation 6(1)(c), which prohibits agencies from making work conditional on using specific services.
Escalate within the agency
If the consultant persists, ask to speak with their manager or the agency's compliance officer. Many issues are resolved at this level once senior staff understand the legal implications and their responsibilities.
Report the violation
If the agency continues to violate your rights, report them to the Employment Agency Standards Inspectorate (EAS). You can also use Accredit+ to log the issue and receive guidance on next steps.
Report a PSL issue
As an Accredit+ member, you can report PSL violations directly through our platform. We will log the incident, guide you through next steps, and work with agencies to improve compliance and protect your rights.
Step 1
Secure logging
Submit details of the PSL restriction through our secure reporting tool. We store everything confidentially.
Incident logged
Confidential
Encrypted
Step 2
Expert support
Receive step-by-step advice on how to respond, including template communications to send to the agency.
Template ready
Agency response
Guided
Step 3
Industry change
Accredit+ works with agencies and umbrella companies to improve industry compliance and protect contractors.
Compliance improved
PSL updated
Protected
What a compliant umbrella company looks like
Know what to expect from a reputable provider.
PAYE processed correctly
Tax, National Insurance, and pension contributions calculated accurately against HMRC rules.
Transparent fee structure
All fees clearly disclosed upfront. No hidden charges or unexplained deductions from your pay.
Holiday pay handled properly
Statutory holiday pay accrued and paid correctly, whether rolled up or accrued separately.
Employment rights provided
As an employee of the umbrella, you are entitled to statutory sick pay, maternity pay, and pension auto-enrolment.
Clear payslip breakdown
Every payslip should itemise gross pay, all deductions (tax, NI, pension, fees), and net take-home pay.
Employer's liability insurance
All umbrella companies must hold employer's liability insurance of at least £5 million.
No tax avoidance schemes
Compliant umbrellas do not use loan schemes, offshore arrangements, or any disguised remuneration.
Continuous employment record
Your umbrella provides a continuous employment record, useful for mortgage applications and credit checks.
Frequently asked questions
Common questions about contractor rights, PSLs, and the Conduct Regulations.
Protect your rights as a contractor
Sign up to Accredit+ to report PSL issues, verify payslips, and access contractor rights resources.