Why Continuity of Employment Matters for Umbrella Company Contractors

When working via an Umbrella Company, understanding the continuity of employment can make a huge difference to your financial stability, rights and your peace of mind. In simple terms, continuity of employment means you stay employed by the same organisation (SG Umbrella), even when moving between different contracts.

In this blog we’ll explain what it is, why it matters and how it benefits you as an umbrella company employee.

• Continuity of employment allows you to maintain an unbroken employment record with the same umbrella employer, despite changing contracts or assignments.
• By having a continuous employment history you’re able to boost your ability to secure mortgages, loans and better interest rates.
• It reduces the administrative burdens, such as shifting tax codes or switching employers frequently.
• You become eligible for employment rights, such as statutory leave, pension auto-enrolment, etc more easily when continuity is maintained.

Continuity of employment refers to the uninterrupted period during which you are employed by the same entity, SG Umbrella.

• From the moment you joined SG Umbrella you became one of our employees, under one overarching contract of employment.
• This employment relationship remains in place, even when one contract ends and another begins, helping to avoid the gaps in employment status.
• For contractors this means that rather than switching for every new contract, you remain with SG Umbrella throughout.

By maintaining continuity of employment, you’re able to enjoy a variety of real-world advantages, such as:

• Financial credibility – Lenders favour applicants with ongoing employment records rather than those who have multiple, short-term contracts with several different employers.
• Consistency in payroll and tax code – By staying with one employer you’re reducing the risk of tax code errors or sudden spikes in deductions.
• Access to employment rights – Rights such as maternity / paternity pay, sick pay, holiday pay and auto-enrolment pensions may depend on continuous employment periods.
• Reduced administrative load – By staying with SG you’ll avoid the hassle that comes with setting up new employment contracts, organising PAYE arrangements or dealing with multiple employers.

By staying with the same umbrella company, the benefits of continuity of employment are there for the taking, but keep the following in mind:

• Stay with an umbrella like SG Umbrella, one that uses an overarching employment contract, which allows you to stay employed between contracts.
• Avoid any breaks between your assignments. Some umbrella schemes will ensure employment continues during gaps so that your record remains intact.
• Keep your employment relationship with your umbrella company active (ie maintain your timesheet submissions, staying registered, etc) so that your contract remains valid.
• Ensure that your umbrella company is accredited to ensure the arrangement is compliant and protects your rights. SG Umbrella is FCSA accredited, so there’s no need to worry about our compliance.

Whilst continuity of employment is a benefit, there are some areas to look out for:

• A break in employment, such as when you’re moving from one umbrella company to another and resigning your old contract in the process, can break continuity.
• Not all umbrella companies guarantee continuity, as some poorly structured schemes may possibly require you to sign a new contract per assignment, which will interrupt continuity. Here at SG we guarantee continuity, no matter what.
• Continuity alone cannot excuse non-compliant payroll practices or tax avoidance, you must still ensure the umbrella company you use is operating properly and correctly.

As an umbrella company employee, continuity of employment should not be ignored. It offers real-world benefits, from smoother tax and payroll treatment to stronger financial credibility and access to employment rights. This only works though if the umbrella you engage with genuinely protects the continuous relationship, and you play your part in maintaining that relationship. The good news for SG Umbrella’s employees is that we only offer continuity of employment, are FCSA accredited, and put our employees first, so you don’t need to worry.

If you have any questions about continuity of employment, it’s conditions or our accreditations, get in touch with the SG Umbrella team.