Joint and Several Liability: How Real-Time Transparency is Shaping Labour Supply Chains

This is a guest blog by REC business partner, SafeREC

April 6th is approaching, and while much has been written about the technicalities of Joint and Several Liability (JSL), the most significant change is not just in legislation, but in how the market is responding.

We are seeing a shift in our data regarding how labour supply chains are managed. The industry is moving away from classic due diligence and accreditations toward a more evidence-led approach to compliance. As agencies and MSPs prepare for increased scrutiny, several clear trends are emerging.

MSPs are strengthening and enforcing PSLs

Managed Service Providers (MSPs) are placing greater emphasis on how supply chains are structured, monitored, and audited. Rather than relying on static lists of approved providers, Preferred Supplier Lists (PSLs) are increasingly made up of umbrella companies that can demonstrate compliance through independent, real-time auditing.

We believe this shift is the reason why, since the beginning of the year, an average of 75 to 100 new agencies sign up to platforms like SafeRec every single day. The focus is also moving beyond umbrella companies; MSPs are starting to ask agencies for evidence of tax compliance even when the agency engages their workers' PAYE directly.

Agencies are prioritising auditing

Agencies are fundamentally changing how they approach supply chain risk. Across the market, there is a clear increase in agencies adopting models that allow compliance to be evidenced rather than assumed. For instance, as of March 2026, more than 17,000 recruitment agencies use SafeRec-certified umbrella companies to review operational and tax compliance.

While the past three years have seen a steady increase in demand for real-time visibility, the new legislation has driven this growth exponentially by making all parties in the supply chain potentially liable. We are even seeing an increase in umbrella companies creating secondary PAYE references to evidence to agencies that liability is being paid weekly.

Financial monitoring as an essential framework

Another emerging trend is that financial monitoring is becoming an essential part of the compliance framework. Adoption of CreditSafe integration within the SafeRec platform increased by over 250% in March alone.

Agencies are showing greater interest in taking a broader perspective when working with partners, viewing compliance not only in terms of structure but also in terms of long-term sustainability and insolvency protection.

The Bottom Line

As April 6th approaches, the direction of travel is clear: the industry is shifting toward a transparent, evidence-based approach. Technology has made umbrella and agency tax compliance possible, and 2026 is set to be the year when agencies empower themselves with tools to transform compliance risk into a sales advantage when engaging with clients.

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