The government’s consultation on modernising the agency work regulatory framework, published by the Department for Business and Trade on 6 February 2026 under the Make Work Pay agenda, closes on 1 May 2026. What is on the table could reshape the regulatory architecture of the UK’s temporary labour market. The industry has until that date to influence the outcome.
FCSA has described the proposals as containing “potentially seismic change” that “could reshape how the temporary labour market is regulated.” That is not hyperbole. The changes are coming, and the window to respond is closing.
What the Consultation Covers
The full title is “Make Work Pay: Modernising the Agency Work Regulatory Framework”. It is structured around four pillars: Security, Transparency, Choice, and Modernisation.
The headline proposals are:
Bringing umbrella companies within the Conduct Regulations. The consultation proposes bringing umbrella companies formally within scope of the Conduct of Employment Agencies and Employment Businesses Regulations — a regulatory framework they currently sit outside. This would subject umbrella companies to conduct standards that already govern recruitment agencies.
Restricting kickbacks. The consultation proposes restricting or prohibiting margin-sharing arrangements between umbrella companies and recruitment agencies, commonly known as kickbacks. This practice has long been identified as a driver of non-compliance and an incentive for some agencies to direct workers towards cheaper, less scrupulous operators.
Preventing forced umbrella arrangements. Proposals to prevent workers being required to use umbrella companies where they have not freely chosen to do so — a direct response to evidence of workers having no meaningful choice in how they are paid.
Streamlining for compliant businesses. Alongside tougher enforcement proposals, the consultation acknowledges the need to reduce unnecessary administrative burden on compliant providers operating in good faith.
FCSA’s Position
FCSA is broadly supportive of the direction of travel. Greater regulatory clarity for the sector, caution surrounding kickbacks, and formal oversight of umbrella companies are changes that compliance-focused operators have advocated for years. A level playing field — where non-compliant businesses cannot undercut responsible ones on price — is in the interests of the industry and of the flexible workers who rely on it.
The concern FCSA has raised is equally clear: a one-size-fits-all approach risks penalising providers who are already operating to the highest standards, and could disrupt the flexible arrangements that many workers choose freely. Regulation designed to address bad actors must not inadvertently constrain good ones.
That distinction will only emerge from the consultation process if the industry engages with it in volume and with specificity.
Why Your Response Matters
Government consultations are shaped by the breadth and quality of responses received. FCSA will be submitting a formal response representing the compliance-focused segment of the industry. But individual responses from umbrella companies, recruitment agencies, and professional advisers carry independent weight — particularly where they reflect direct operational experience of the market’s problems and its strengths.
If you have views on how the proposals would affect your business, your clients, or the contractors you support, this is the moment to make that case.
FCSA has published a consultation summary and response guidance for Members, and will be engaging further with Members before submitting ahead of the 1st May 2026 deadline.
