THE government has been “washing its hands” of thousands of agency workers who have suffered pay injustice at the hands of umbrella companies, Unite said today.

The union said that the Tories have expressed “no interest” in alleviating the “misery” caused by umbrella companies, after a freedom of information request revealed that the Treasury has not researched the number of workers paid in this way in over three years.

Furthermore, the Department of Business, Energy and Industrial Strategy has openly admitted never carrying out any research into the number of people whose pay comes through umbrella companies.

The highest number of workers affected by the practice is in the construction industry, but it also occurs in local government, warehousing, road haulage and education.

In the vast majority of cases, workers are initially taken on by an employment agency, only to be told later that they will be paid through an umbrella company.

The main problem is that the signed-up worker has to pay both the employer’s national insurance contributions as well as their own. When income tax is added on, deductions can amount to about 46 per cent of a worker’s eligible earnings.

Critics also point to the fact that employers roll holiday pay into the rate, meaning that workers take a small amount of money on a weekly basis for holidays but are unpaid when they take annual leave.

Furthermore, workers can also be charged upwards of £25 a week for the privilege of being paid in this way.

The latest allegation from Unite follows the union’s revelation last week that bogus self-employment in the construction industry continues to grow, despite Tory promises in 2014 to cut down in the surge in the practice.

Unite assistant general secretary Gail Cartmail said: “Thousands of workers are being exploited by umbrella companies, but the government clearly has no interest in alleviating their misery as they are not even monitoring how many workers are being paid in this way.

“Workers are being fleeced and deductions are so great that saving for your old age will often be unaffordable as workers can’t make ends meet day to day.

“This is simply storing up further problems for the future.

“If the government had an ounce of decency, it would outlaw the use of umbrella companies and introduce strict rules to ensure workers are paid by standard PAYE.”