Holiday pay ruling places Lancashire firms at risk of legal action

Following a landmark legal ruling, Pierce is warning employers that they must be prepared for changes to holiday pay calculations, which must now reflect voluntary overtime worked during the rest of the year.

The warning follows an employment appeal tribunal which set a new legally binding precedent on holiday pay entitlement. Employees who earn overtime pay from voluntary duties when working should also receive those payments when they take holiday. If companies do not adhere to this, workers will have a case for an employment tribunal.

Pierce payroll administrator, Philip Johnson, said: “We are advising our clients that they must have the correct procedures in place to calculate holiday pay, and we are supporting them in implementing the necessary changes.

“This ruling has set an import legal criteria which all employers need to be aware of. Pierce is happy to advise any company that is not sure of their obligations towards employees.”

An employment tribunal appeal hearing by Dudley Metropolitan Borough Council ruled that payments for voluntary duties – including voluntary overtime, standby, call-out work and travel time linked to work – should be calculated into holiday pay.

The case involved 56 members of the Unite union and employed by Dudley MBC to work on the town’s housing stock. The workers did regular overtime, worked weekends and were on a standby rota, all on a voluntary basis.

In some cases, employees received around £6,000 a year for the voluntary duties in addition to their basic salary when working, but the overtime wasn’t included in their holiday pay. The underpayments for the 56 employees varied between £350 to £1,500 per year dependent on the amount of overtime accrued.

For more information about holiday pay, contact Philip Johnson on 01254 688110 or payroll@pierce.co.uk

Lancashire firms warned about the dangers of preparing for school holidays

As the excitement among children for the six-week summer holiday builds, the enthusiasm may not be shared by parents and employers who are frantically trying to work out the logistics for childcare.

According to research from Direct Line for Business the six-week summer holidays cost home businesses alone £658 million a year. The increase in leave requests creates an annual problem for companies of balancing a happy workforce with meeting the needs of the business.

Simon Diggle, Associate Director at Pierce Chartered Accountants provides his top tips to businesses to efficiently manage staff during the summer.

Length of leave

Employers can allow workers to have three weeks off at any one time, but they will need to ensure enough staff members are available to cover them. If there isn’t, they have the right to refuse the leave-but businesses need to ensure that they are consistent when approving holiday leave. To prevent any disgruntled employees, businesses should have a policy regarding when holidays can be taken and how many people can be off at any one time.

Refusing holiday requests

Although employees have a statutory right to annual leave, the company can dictate when it can be taken. Employers can set the times for when workers take their leave, most commonly at Christmas with some Lancashire businesses still operating a summer shut down. Employers can prevent people taking leave during busy periods.

When childcare arrangements fall through

Sometimes childcare arrangements break down, when they do, employers have a legal right to provide reasonable time off for dependants. This is normally unpaid and would expect to last between one or two days. Employers could suggest the use of annual leave or special leave which the company may allow with pay.

Flexible working

Parents of children aged 16 and under can request flexible working during the summer holidays. This can consist of part-time, flexi-time, compressed hours, staggered hours, working from home or term-time only working.

Employers are obliged to consider this and can only reject the application if there is a good business reason. A new work pattern needs to be agreed, once confirmed, it will permanently change the terms and conditions of the employment.

Does travel delay=pay?

During the busy summer period, travel delays do happen and there are no legal rights for employers to pay for any missed days. The result of this depends on your contract, some businesses may have contractual arrangements in place for this and provide discretionary pay for travel disruption.

Planning is key

Planning ahead during the summer months is the key to business success. If members of your accounts team are off, ensure that invoices are still processed on time to prevent payment delays as this could damage your reputation and credit rating. If the person in charge of payroll is away, organise for someone else to manage it in their absence to guarantee that staff members will be paid on time.

Payroll administrator nominated for Young Employee of the Year

THERE is nothing dull about working in an office – just ask Philip Johnson and he is happy to share his genuine love for his job as a payroll administrator.

Philip 21, is on the shortlist for Young Employee of the Year and when he explains his progression over the past three years, it is no surprise.

Not only is he well on his way to completing a foundation degree in payroll management, he is currently standing is as manager of a team of six people while his boss in on maternity leave.

Philip, from Rishton, began working at Pierce CA in Blackburn on an apprenticeship scheme just over three years ago.

He said: “I left school at 16 and went to college and then worked in a local cinema for a while. Then I decided I needed something more permanent and full time and I got an apprenticeship through North Lancashire Training Group.

“The range of clients we have means I can be dealing with a sole trader one day and a company with 350 employees the next.

“ Every day is different and that’s one of the things I like about the job.”

Philip said he didn’t expect to hear anything more after his company nominated him for the award.

He said: “It’s just nice to have the recognition from the company. I couldn’t believe it when I was shortlisted.”

Apprenticeship levy – are you ready?

The government’s apprenticeship levy comes into force this spring and businesses in England should prepare for changes to their wage bill, writes Lisa Kennery.

From April 6 2017, employers with an annual wage bill of over £3m must pay the new levy, which replaces taxpayer funding of apprenticeships. It will generate £2.5bn per year to spend on apprentice training.

The pay bill is made up of the total amount of your employee`s earnings that are subject to class 1 national insurance

Theses earnings are made up of:

  • wages
  • bonuses
  • commissions
  • pension contributions

They exclude benefits in kind, such as company cars, healthcare and childcare.

The levy is set at 0.5% of a company’s total wage bill and is paid to HMRC through PAYE, changing the process for calculating payroll. The levy due will vary dependant on the bill each month.

All eligible companies will be given a £15,000 offset allowance. Therefore, an employer with an annual wage bill of £5m will spend £10,000 a year on the levy:

  • Levy sum: 0.5% x wage bill of £5m = £25,000
  • £25,000- £15,000 allowance = £10,000 annual levy payment

Groups of companies with more than one PAYE scheme will only receive one offset allowance of £15,000. Levy payments are placed into a digital account which employers can access to pay for training for apprentices appointed after April 2017. It will be determined by employers how to split the allowance between those companies.

As an incentive for businesses to start apprenticeship schemes, the government automatically tops up the levy payment by 10% so employers get more out than they put in.   

Levy funds will remain in the account for 24 months before expiring, encouraging businesses who don’t currently offer apprenticeships to establish a training scheme.

Once the levy comes into force, employers will have to inform HMRC if they are eligible. Businesses with a lower but increasing wage bill, should monitor their payroll and alert HMRC once it reaches £3m.

The levy should be paid to HMRC as part of your usual PAYE payment by 19th of the month, or 22nd if paying electronically.

The changes will also help smaller businesses who aren’t eligible to pay the levy. The government will pay 90% of the apprentice training costs through co-investment, leaving them to pay the remaining 10%.

Businesses with fewer than 50 members of staff will receive 100% funding from the government if they recruit a 16 to 18-year-old apprentice. This will run until at least 2018 when the government will issue further advice.

The full technical details of the apprenticeship levy are yet to be finalised and once confirmed it will inevitably raise further questions for employers.

The levy will undoubtedly increase the burden of administration for eligible companies. This is something that Pierce Chartered Accountants can help you with. For more information and for the latest updates on the apprenticeship levy, contact Lisa Kennery.

Class 2 National Insurance Contributions

National Insurance shutterstock_15678070

Background

Traditionally self-employed individuals paid their Class 2 National Insurance contributions via six monthly bills or regular direct debits. If an individual’s profits were, or were expected to be below the small earnings threshold they could apply for the small earnings exception.

The Office of Tax Simplification recommended that the Government review the way National insurance is collected for the self-employed, in order to make it simpler, more straight forward and to reduce the administration burden.

Following the review, it was decided that Class 2 National Insurance will be collected under the self assessment system in the same way that Class 4 National Insurance is currently collected.

What does this mean for me?

If you were paying your contributions by direct debit you may have noticed that your last payment was taken on 10 July 2015.

Your liability to Class 2 will be calculated at the end of the tax year alongside the preparation of your self assessment tax return and any amounts due will become payable the 31 January following.

For example, your liability for the 2015/16 tax year will be calculated when your tax return is prepared and will be payable alongside your Income Tax and Class 4 National Insurance on or before 31 January 2017.

The amount of Class 2 National Insurance due will still be calculated at a flat rate (2016/17 – £2.80 per week) with reference to how many weeks of self employment the individual has undertaken during the year.

Those with no profits chargeable to tax or profits below the new ‘Small Profits Threshold’ – £5965 2016/17 (which replaces the Small Earnings Exception) will no longer have to apply in advance for an exception from paying Class 2 National Insurance, as liability will not automatically arise.

However, in some cases you may still want to make payments voluntarily to retain your rights to certain benefits such as Employment and Support Allowance, Maternity Allowance, Jobseekers Allowance and your State Pension.

The contribution criteria for claiming each of these benefits is different therefore if it may be likely that you will need to claim any of these benefits in the near future and you are not automatically liable to make class 2 contributions please contact a member of the Tax Department to discuss voluntary contributions.

If you have gaps in your National Insurance record you may not be able to claim your full state pension when it comes to retirement.

If you would like to check for any gaps in your national insurance record you can do that here: https://online.hmrc.gov.uk/shortforms/form/NIStatement

Spreading the cost

For those that would like to continue to spread the cost of their Class 2 National Insurance over the year HM Revenue and Customs have proposed that they set up a ‘Budget Payment Plan’, to make regular payments in advance, when doing this it is important to specify that the payment is for Class 2 National Insurance otherwise HM Revenue and Customs will set it against your self assessment record. Information how to set up a budget payment plan can be found here: https://www.gov.uk/pay-self-assessment-tax-bill/budget-payment-plan

Peoples Pension Auto Enrolment News

Peoples Pension Auto Enrolment News

From:  Lisa Kennery

The People’s Pension is launching a new full support automatic enrolment pension solution for small businesses on 23 November. The solution has been developed based on extensive research with small businesses and their business advisers and financial advisers.

What they’re offering

Peoples Pension Logo

Patrick Heath-Lay, Chief Executive Officer at B&CE, provider of The People’s Pension, said:

“We’ll be charging a one off set up charge only, and will not be charging employers for ongoing support.

The People’s Pension launches the ‘complete package’ for small employers

peoples-pension-footer

November 5, 2015 News

The People’s Pension has announced today that it will go live with an enhanced service and support package for new and existing customers on Monday 23 November.

  • Option to ‘Simply comply’ with a fast track route to legal compliance
  • Or to ‘Simply tailor’, putting employers and advisers in control for a bespoke experience
  • Enhanced payroll support and extended opening hours with dedicated employer and adviser teams
  • We’ll even tell the regulator employers have complied

It will offer all new employers joining the scheme the complete package to meet their auto-enrolment (AE) needs – and has been specifically designed to support small employers as they start to stage from January 2016.

New employers will be able to choose between two routes. The first, ‘Simply comply’, will guide them through a fast track process designed to help them comply as quickly and easily as possible. The second, ‘Simply tailor’, offers employers a more bespoke experience to cater for the individual needs of their workforce.

Both routes will offer a number of different payroll options, both manual and automatic. There’ll be a range of online tools and assessment options available – and The People’s Pension will even tell The Pensions Regulator that an employer has complied. Customer service hours are set to be extended too, to 8am-10pm from January 2016, to provide an extra helping hand at sign up.

The enhancements to the scheme’s award winning service and support follow extensive research with small employers and their advisers on what they need from a workplace pension provider. They also build on not-for-profit provider B&CE’s experience of providing pensions to small construction employers for more than three decades.

Patrick Heath-Lay, Chief Executive Officer at B&CE, provider of The People’s Pension, said:

“Workplace pensions can be alien to people outside the pensions industry. Our research and 30 years of experience working with small employers tells us that they want simple solutions and a great deal of support in meeting their auto-enrolment duties. Our doors will remain open to everyone who wants to come to us, regardless of their size and their sector.

“That’s why we’ve developed a simple, hassle free and high support solution for busy people who just want to run their business, not get bogged down in pensions. Simplicity is the key. We’re here to help small employers navigate the auto-enrolment galaxy.”

Employers with a staging date of January 2016 onwards who sign up with The People’s Pension from Monday 23 November will pay a one off set up charge of £500 + VAT for all the support they’ll need for the life of the scheme. Employers with a 2015 staging date who sign up from Friday 1 January onwards will also be charged.

There will be no ongoing charges for employers, and the low annual management charge of 0.5% for members will remain. Employers signing up through an intermediary will pay a reduced charge of £300 + VAT.

Heath-Lay continued:

“We’ll be charging a one off set up charge only, and will not be charging employers for ongoing support.

“Our focus is on putting savers first. We don’t believe in frontloading member charges to cover the cost of supporting employers.

“That’s why we are introducing this charge. We want to make sure that we can keep delivering award-winning customer service and support to new and existing customers, and keep our member charges low.

“We know that small employers feel daunted by auto-enrolment. For the one off set up charge, we will make complying with the law easy, straight-forward, and stress free for small employers.”

-ENDS-

Fit for Work

Fit for Work

How employers can prepare for Fit for Work

News compiled from http://fitforwork.org/

By: Lisa Kennery

GPs and employers throughout England and Wales can now refer their employed patients and employees who have been, or are likely to be, off sick from work for four weeks or more for a voluntary occupational health assessment.

Fit for Work is now available for employers up and down the country, meaning that they can refer staff who have been off work sick for four weeks or more to the service. The service is aimed at supporting workers in SMEs to plug the gap in occupational health advice and support provision – as around 70% of employees in England and Wales don’t have access to occupational health and advice.

Fit for Work is predicted to cut sick pay costs to business by £80 million, to £165 million a year. This means that it is something businesses can’t afford to miss out on taking advantage of. Those wanting to use the service often find it good practice to include Fit for Work in their in-house HR policy, and build it into their procedures for dealing with sickness absence.

Employers wanting further advice about referring employees on long-term sickness absence can call the Fit for Work advice line on 0800 032 6235 to speak to a dedicated advisor.

Employees who consent to being referred to Fit for Work will be invited for a telephone assessment by a Fit for Work occupational health professional. This assessment aims to identify all potential obstacles preventing employees from returning to work (including health, work and personal factors). Where appropriate, a Return to Work Plan will be agreed between the advisor and employee.

While aiming to plug the gap in occupational health advice and support for SMEs, Fit for Work can also work alongside existing occupational health provision as it focuses on many different aspects preventing an employee’s return to work, including social and financial factors.

Desk and Lamp

The occupational health professional will identify obstacles preventing the employee from returning to work. A Return to Work Plan will be agreed providing recommendations tailored to the employee’s needs, which can replace the need for a fit note.

How to prepare for making Fit for Work referrals

  • Clarify what existing support you already have in place for employees on long-term sick leave and update your HR policy to accept the Fit for Work Return to Work Plans. (For help with updating your absence and HR policies, see the CIPD guidelines.)
  • Invite eligible employees in for a discussion about Fit for Work, and refer employees (with their consent) using the employer referral form.
  • Spread the word about Fit for Work within your organisation or on your website using some of our online resources (see the employer toolkit for a collection of useful materials available for your use).

Press Releases

New return-to-work service opens to employers today

Tuesday, September 8, 2015

Each year around 865,000 employee absences in England and Wales last for four weeks or more1. 74% of employers in England and Wales feel that if they had more external…

New return to work service goes live to help GPs, employees and employers across England

Wednesday, July 22, 2015

A new support service, designed to help working people who face long-term sickness absence return to work more quickly, is now available across the whole of England. The free and…

Employer Roadshow

The scheme is set to affect employers up and down the country, with businesses now beginning to refer their employees to Fit for Work. The events, to be held across England and Wales, will be looking at what these changes mean from a policy and business perspective.

Events will be taking place in:

If you are interested in attending, please email your name and the event you wish to attend to fitforwork1@munroforster.com (for England) or eoghanmortell@workingwordpr.com (for Wales).

Suitable for:

Business Membership Organisations, Business Member Organisations, Employment Relations Specialists, Employee Representatives, MDs / CEOs, Trade Unions, Health and Wellbeing Boards, Occupational Health Specialists

 

Now: Pensions to add charge

Now: Pensions to add employer auto-enrol charge

NOW Pensions untitled

Automatic enrolment provider Now: Pensions is to introduce an employer charge of up to £40 a month for those employers who register with them on or after 1 October 2015 and who have staging dates from 2016 onwards.

Lisa Kennery, our Payroll Manager says, “ACT NOW; Small employers with 2016 staging dates and beyond who have not yet enrolled in a pension scheme, really need to contact us to hear these details.

A possible £40 per month is a considerable sum for small employers to find. If applicants register with NOW: Pensions before 1 October even though their staging date is not until 2016 or beyond, they will avoid the charges described below.

The choice of low cost pension providers may be severely restricted in the near future. Small employers who wish to minimise costs really need to get in touch with us this week.”

NEST-logo

Concerns have been growing that firms yet to auto-enrol will have to turn to NEST (The National Employment Savings Trust) as other providers struggle to make money out of the smaller firms.

Now: Pensions director of policy Adrian Boulding said in an earlier statement that; “The firm will use research to improve services for small employers – such as giving each employer a dedicated member of support staff”

Boulding says: “We are going to charge employers. We’ve made a decision we want to remain open to all employers of all size and provide them with the help they tell us they need to help them manage auto-enrolment.

“But to do that we are going to levy a charge for new employers that join us from 2016. We don’t know what the charge will be yet, because we haven’t asked employers what services they want yet. But we are making a commitment today that it will be no more than £40 a month.”

“We think it’s something that a small business – if they value the services – will be happy to pay. If we get the consultation right we will be delivering the services people have told us they need and would value.”

Boulding adds: “The majority of small employers do not have an adviser, many will use an accountant. They are expecting their pensions provider to help them with the day-to-day nitty gritty of things like filling out forms.

“We are trying to find out exactly what help small employers need – is it a call centre, or a named individual in a call centre or the ability to share computer schemes?”

An announcement was made by NOW: Pensions on 17 September 2015 that the launch of this charge will not apply to any firm that already has an accepted contract with NOW: Pensions even if they are staging in 2016 or beyond.

To handle the growing demand, NOW: Pensions has increased its contact centre capacity significantly and in November is opening a second office in Nottingham with the creation of 250 new jobs over the next two years. Many of these jobs will be in front line client support.

NOW: Pensions recognises the needs of smaller employers are fundamentally different to 54,000 employers that have already staged.

They state in their release of Thursday 17 September: When it comes to selecting a provider for auto enrolment, one in four (26%) employers intend to seek help from their accountant, one in six (16%) are relying on their existing scheme provider and one in ten (12%) plan to search the market and do the research themselves. Just one in 20 (6%) of small and micro firms intends to seek help from an independent financial adviser.

 

Shared Parental Leave

Guest Blog from:

HR Partener logo

Shared Parental Leave……………

 

Shared Parental Leave took full effect on 5 April 2015. The new regulations enable eligible mothers, fathers, partners and adopters to choose how to share time off work after their child is born or placed for adoption. This could involve returning to work for part of the time and then taking leave at a later date. Employees must meet the following criteria in order to be eligible for Shared Parental leave;

  • They must have been continuously employed for at least 26 weeks at the end of the 15th week before the week in which the baby is due (or if adopting at the week in which an adopter was notified of having been matched with a child for adoption) and must still be employed in the first week that Shared Parental Leave is to be taken.
  • They must satisfy the Employment & Earnings Test which means that the other parent must have worked for at least 26 weeks in the 66 weeks leading up to the due date and have earned above the maternity allowance threshold of £30 week in 13 of the 66 weeks.

Shared Parental Leave offers parents more flexibility to share the responsibilities of having a child and leave can be taken at any time within the first year of the child being born.

A maximum of 52 weeks leave (less any maternity leave already taken) can be taken in separate blocks (up to three a year) and can be in a continuous period or a discontinuous period. Employers will not be able to refuse an application for continuous leave but can refuse, or negotiate, an application for a discontinuous period of leave.

Each parent taking Shared Parental Leave is also entitled to a maximum of 20 Shared Parental Leave in Touch days (similar to Keep in Touch days).

Parents taking Shared Parental Leave will be entitled to Statutory Shared Parental Pay  –  payment will only be payable to one parent at a time. If the mother cuts short her maternity leave and returns to work the father can apply for Shared Parental Pay for the remaining weeks.

There is a lot more detail & it’s advisable that employers develop a robust policy and talk to their staff about the options regarding Shared Parental Leave. Having an early and informal discussion can provide an opportunity for both the employee and employer to talk about how they want to use the Shared Parental Leave and how this might be best accommodated by the Company.

For help with this or any other HR matters, please call us on 0800 193 4055

HR Partner Ltd

For more information go to :

https://www.gov.uk/shared-parental-leave-and-pay/overview

Tax-Free Child Care Update

Tax-Free Childcare Launch Date now 2017

HM Treasury

Government confirms Tax-Free Childcare launch date as it welcomes judgment from Supreme Court

From:

HM Treasury and HM Revenue & Customs

Tax-Free Childcare is part of the government’s long-term plan to support working families.

The government today (Wednesday 1 July) welcomed a judgment from the Supreme Court that found the government’s proposals for delivering Tax-Free Childcare to be clearly lawful.

It also confirmed that, as a direct result of the legal challenge, the scheme is now expected to launch from early 2017. The existing Employer‑Supported Childcare scheme will remain open to new entrants until Tax-Free Childcare is launched.

As a result of the legal action, the court placed a suspension on the development of the scheme which prevented key delivery steps from taking place. This legal action was brought by a small group of childcare voucher providers involved in the delivery of the scheme that Tax-Free Childcare will eventually replace.

Exchequer Secretary to the Treasury, Damian Hinds said:

We are pleased that the government’s proposals for delivering Tax-Free Childcare have been found to be clearly lawful. This government is absolutely clear on the importance of supporting families with their childcare costs.

It is disappointing that some organisations involved in the existing scheme felt the need to take and persist in this costly and wasteful course of action, which has led to a delay in the launch of Tax-Free Childcare.

We are now pressing ahead with the scheme as part of our ongoing commitment to support working families.

Tax-Free Childcare is part of the government’s long-term plan to support working families and will provide up to 1.8 million families across the UK with up to £2,000 of childcare support per year, per child, via a new simple online system.

The government is clear on the importance of supporting families with their childcare costs. Spending on childcare was increased by £1 billion in the last Parliament and the government has also committed to doubling free childcare for working parents of three and four year olds to 30 hours a week.

Further information

  • a legal challenge was brought against the government’s decision to deliver the Tax-Free Childcare accounts through HMRC working in partnership with NS&I
  • some organisations involved in the existing Employer-Supported Childcare scheme decided to pursue challenges against the government’s decision to deliver Tax-Free Childcare childcare accounts by HMRC and NS&I working in partnership, and NS&I’s use of an existing outsourcing contract to deliver childcare accounts
  • the Supreme Court “unanimously dismisses their appeal
  • formal arrangements have now been made between HMRC and NS&I and they are pressing ahead to deliver Tax-Free Childcare as soon as possible
  • exact rollout details for Tax-Free Childcare will be confirmed in due course
  • Employer‑Supported Childcare, often referred to as childcare vouchers, will remain open to new entrants until Tax-Free Childcare launches. Parents who wish to remain in Employer-Supported Childcare once Tax-Free Childcare is launched will be able to, while their current employer continues to offer the voucher scheme
  • workplace nurseries will be unaffected by the introduction of Tax-Free Childcare