SWES announces closure as JSL Reform Interpretation Forces Ethical Providers Out of the Market

The team at SWES and payroll provider, Flexr have worked with members who have been affected to support them through this change.

JSL reform introduces shared tax liability across the labour supply chain, making umbrella companies, recruitment agencies, and sometimes end clients jointly responsible for unpaid PAYE and National Insurance contributions. Previously the responsibility rested primarily with the umbrella company.

Through this process many master vendors have interpreted the reforms as requiring umbrella companies to hold commercial accreditations such as SafeRec or FCSA to demonstrate their compliance and for organisations like SWES to be on their framework.

These schemes are expensive, designed for large commercial umbrellas, increase costs to the worker and do not provide any additional protections to them beyond those already offered by SWES.

This interpretation has created a de facto closed shop, excluding ethical, not for profit umbrellas from Preferred Supplier Lists (PSLs) and making it almost impossible for organisations like SWES to continue operating.

SWES which is affiliated to the British Association of Social Workers (BASW) has been operating since 2020 and was a direct response to BASW member calls for an ethical alternative that prioritised the needs of the worker.

SWES spokesperson said: “This is an incredibly difficult decision, but the market has shifted in a way that leaves no viable route for not for profit umbrellas. We have always operated to the highest ethical and compliance standards, but the new commercial accreditation requirements are simply not compatible with a reinvestment based model. Our priority now is ensuring that every worker experiences a smooth, supported transition.”

SWES will close responsibly and is working with payroll partner, Flexr to ensure that all workers can move to a new umbrella provider with minimal disruption to their income or employment continuity.

BASW will continue to advocate for social workers affected by these changes. Kate O’Regan, Executive Director at BASW said: “The exclusion of ethical, not for profit umbrellas was never the intention of the JSL reforms.

"BASW will continue to lobby government, raise awareness of these unintended consequences, and represent the voice of social workers who deserve genuine choice over their umbrella employer. Worker protections and ethical employment models must not be collateral damage in the implementation of regulatory reform.”

SWES and BASW are contributing to the government’s consultation on umbrella company regulation and are calling for:

• Recognition of not for profit umbrella models within new regulations • Transitional arrangements to prevent disruption to workers • Engagement with ethical umbrella providers to understand sector impact • Alternative compliance pathways that do not rely on costly commercial accreditation schemes • Protection of worker choice as a core principle