IR35 tax legislation has been in force since 1999. The primary purpose of the IR35 legislation is to identify individuals whom are working on a self-employed or contractor arrangement who are in fact classified as a “disguised employee” working for the fee-payer/employer. Therefore the IR35 regulations identify instances of this nature whereby there has been an avoidance of Tax and National Insurance payments by fee-payers/employers and raises the question of employee employment rights. Since 1999, within the private sector it has been the responsibility of the self-employed worker/contractor to confirm the status of their worker arrangement if challenged by HMRC, whereas, within the public sector it has been the responsibility of the “fee-payer”.

From 6th April 2020, the legislation extends the responsibility to the fee-payer not only in the public sector but also to businesses of a certain size, within the private sector. This is a substantial shift of responsibility, which is likely to lead to an increase in awareness, exposure and multiple high profile case studies.

It will be the responsibility of the fee-payer to determine the status of the worker/contractor and to confirm this status in writing between both parties.

HMRC can instigate investigations into both fee-payers and self-employed/contractors at any time.
In addition, a claim could be raised in an employment tribunal for breach to statutory rights if a claimant was to infer they should be considered as a worker or employee. If a claimant was successful in being ruled to be an employee they could in turn raise claims in an Employment Tribunal for; unfair dismissal or breach of statutory rights including the right to the minimum wage, holiday, sickness and family leave and pay and discrimination.

There may be a fear from the fee-payer to suggest that employing all workers/contractors as employees may reduce the risk of failing IR35 Compliance. This is not the intention of the regulations. Employing an employee comes with Employer Tax and National Insurance payment responsibilities along with Employee Rights to all other Statutory and Company benefits provisions along with the accrual of Employment Rights; therefore the genuine contractor working arrangement could continue to be better suited for the fee-payer.

There are key indicators to assist with determining if the fee-payer and worker are likely to be operating within or outside of the IR35 regulations. Solve. can support you with determining these differences and can advise you on the requirements of the “fee-payer” in order to support with status determination. If you operate with service agreements for services provided, such as consultants, please do get in touch.

To find out more about IR35 Tax Regulations please speak to a member of the Solve. Team.

In June the Court of Appeal ruled that voluntary overtime payments must also be included in holiday pay calculations. It agreed with the Employment Appeals Tribunal’s ruling in the Flowers and others v East of England Ambulance Service NHS Trust case where ambulance workers claimed that two types of overtime should be included in holiday pay calculations; “non-guaranteed” overtime taken when their shifts overrun and any voluntary shifts they choose to take in advance.

The original ruling at Employment Tribunal held that voluntary overtime should not factor into holiday pay calculations, however the ambulance staff successfully appealed this ruling which then resulted in the East of England Ambulance Service NHS Trust taking the case to the Court of Appeal but the judgement ruled in agreement that voluntary overtime should be included in holiday pay if there are regular overtime payments.

When calculating holiday pay it’s important to remember that the following payments must be included in at least 4 weeks of paid holiday:

• Regular overtime payments (both voluntary and compulsory)
• Contractual commission
• KPI bonus payments

This is to ensure that employees’ salaries are not unduly affected when they take holidays and employees are not discouraged from taking their European entitlement of 4 weeks’ annual leave, in other words they should receive the same amount of money as if they had attended for work. This ruling has been in place for some time now, however many employers have not yet implemented it so the government plans to publicise this in the coming year as part of the Good Work Plan so that employees are more aware of their rights.

As part of the Government’s Good Work Plan, recommendations were made to extend the reference period for determining average pay in relation to statutory holiday from 12 weeks to 52 weeks. This is being brought into force by The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 and will apply from 6th April 2020.

A consequence of this will mean that contracts of employment templates will have to be updated to reflect the changes to holiday pay calculation.

To find out more about holiday pay, how to calculate it and ensure that your contract templates are compliant please speak to a member of the Solve. team

Last month the government unveiled plans for new legislation that will mean that pregnant women and parents returning to work will receive greater protection from redundancy.

The government announced it would begin consulting on extending legal protection against redundancy for pregnant women for six months after they return to work.

The 10-week consultation recommends maternity and parental leave (MAPLE) regulations be extended to cover a six-month period after a new mother returns to work. It could potentially also be applied to others, including men, who return from adoption leave or shared parental leave.

Under current regulations, if redundancies are being made, employers have an obligation to offer those on maternity or shared parental leave a “suitable alternative vacancy” where one is available, giving these employees priority over others who are also at risk of redundancy. However, this provision ends when an individual returns to work.

The consultation cited research commissioned by the Department for Business, Energy and Industrial Strategy (BEIS) that found one in nine (11 per cent) women said they had been fired or made redundant when they returned to work after having a child, or were treated so badly they felt forced out of their job.

The BEIS study also estimated 54,000 women a year may lose their jobs due to pregnancy or maternity.
Separate research published last year found fewer than one in five women feel confident returning to work after maternity leave. The survey also found more than a third (37 per cent) felt so isolated they considered resigning.

The government also committed to exploring evidence for changing employment tribunal time limits for claims relating to discrimination, harassment and victimisation, “including on the grounds of pregnancy and maternity”.

The government said tribunals could already allow the three-month time limit to be extended in discrimination cases if it is considered this “just and equitable” given the circumstances of the case. It hoped the consultation would build on previous work to gather data on the success rate of “out of time” tribunal claims for pregnancy and maternity discrimination.

The consultation on extending redundancy protection for women and new parents will end on 5 April.

Family-friendly regulations and policies are designed help foster inclusive and productive work cultures. If you would like review your existing family friendly policies and procedures speak to us at Solve.

New amendments to the 1996 Employment Rights Act will come into force from 6 April 2019, increasing employer’s responsibilities regarding the payslips they produce. It is important to understand these changes, firstly because employers will be required to provide greater detail within their payslips. In addition to this, the legislation also requires employers to send payslips not only to employees, but to all those classed as ‘worker’. To help you stay compliant, the team at Solve HR have summarised the upcoming payslip responsibilities below.

Inclusions
The following details will be required in every payslip from 6 April 2019;

1. Gross salary or wages
2. Net salary or wages payable
3. Where there are deductions, specify the amount and what it relates to
4. Where it is paid in parts, the amount and payment method for each part
5. If any part varies due to time worked, specify both rate of pay and total number hours worked. This can be either as a single aggregate figure, or separately for each rate of pay or type of work

The reasoning behind the increase in detail demanded of payslips is to increase transparency around what is being paid and why. By helping employees better understand their pay, it is hoped that this will ensure obligations around National Minimum Wage, Holiday Pay and Sick Pay are more likely to be honoured. It is anticipated that some organisations may find they need to introduce new software or update their existing payroll processes in order to meet the new requirements. If your business would benefit from further guidance in this area, the Solve HR team can provide you with expert support.

‘Worker’ Status
Even if someone isn’t classified as an ‘employee’, they may legally fall into the category of ‘worker’, and as such be entitled to employment rights around National Minimum Wage, paid holiday and sick leave. With the emergence of the so-called gig economy, it is becoming increasing difficult to determine the status of their workforce. This is being reflected in Employment Tribunal cases, where we are increasingly seeing instances of those who were originally defined as ‘self-employed’ winning the right to be treated as a worker, as can be seen in high-profile cases such as Uber. Many employers are finding the boundaries are blurred between an employee, a worker and a self-employed contractor, and by not understanding the distinctions, running the risk that they are not fulfilling their legal obligations.

If you find that you are in any doubt about the status of your workforce, or you have any questions regarding the new payslips legislation, you can contact Solve HR for advice at mail@solvehr.co.uk.

Should Staff Get Paid For Snow Days

Should Staff Get Paid For Snow Days

It’s that time of year where the UK is prone to experiencing periods of heavy snowfall.  Our article aims to answer some of the more common questions on the impact of severe weather conditions.

Do I have to pay employees who cannot get to work because of severe weather?

In short, no, you are well within your rights to refuse to pay an employee who does not appear for work due to severe weather such as heavy snow.  This is because an employee who is not working is not fulfilling their contract of employment, and so therefore, you don’t have to pay them.  That said, you may wish to take a reasonable approach and pay your staff on a ‘snow day’ to maintain staff morale and your reputation as a good employer.

Do I really need a policy on severe weather?

It is good practice to have a Severe Weather and Travel Disruption Policy in place to ensure that employees are aware of the rules and procedures that the Company adopts should they experience difficulties in attending work due to bad weather or disruption to travel.

What can I do if I need employees to work even though the weather is bad?

In the modern world of work, many jobs can be done from home, and employees who frequently work at home should be encouraged to do so when bad weather approaches.  If you know that the weather is going to be bad, you might want to take a proactive approach and seek mutual agreement from staff to ensure the business can run effectively during these periods.  You should be careful about asking employees to work at home when a requirement to do so is not included in their contracts of employment.  To require an employee to work at home in severe weather will constitute a unilateral variation of his/her contract of employment requiring consultation in advance.

You should also consider the implications of the employees’ health and safety before imposing a homeworking requirement: some employees’ homes will simply not be set up to be turned into a temporary workplace.

Can employees take holidays when they cannot get to work because of bad weather?

Where employees are unable to get to work because of bad weather, taking the time as a paid holiday may be an option.  There is nothing to stop you asking the employee if they would like to take a holiday if they are unable to get to work.  Many employees will find taking paid holiday preferable to losing a day’s pay.  However, there may be circumstances in which this might not be possible. For example, where the employee has used their holiday allowance or they wish to keep their holidays for a later date.

If you are going to insist that employees take the time as holiday, you must provide them with the minimum statutory notice.  For example, if you request an employee to take 2 days holiday, you must give then at least 4 days’ advance notice.

If I close my workplace because of bad weather, do I have to pay my staff?

 If an employee is unable to work because you have made the decision to close the premises, this will in effect be a period of lay-off, therefore, unless there is a contractual provision allowing for unpaid lay-off, you should pay your employees their normal wage.

I have employees with children at schools and nurseries that are closed because of the severe weather. Do I have to give them time off when they have no childcare?

Employees have the statutory right to a reasonable period of unpaid time off for dependants.  This right applies where an employee needs to take time off work because of unexpected disruption to the care arrangements for a dependant.  An employee taking advantage of this right must inform you of the reason for the absence, and likely length of the absence.

If your business would benefit from a Severe Weather Policy, contact us at Solve. HR.

What will happen to the estimated 3.8 million EU citizens settled in the UK when the UK eventually leaves Europe on 30th March 2019 and how will it affect their employers?

Despite all the ongoing political wrangling regarding the latest deal an agreement with the EU on what will happen to EU citizens after Brexit was actually reached earlier this year and is pretty much set in stone.

To lessen the immediate impact of Brexit an “implementation period” lasting until 31 December 2020 has been agreed (although this may be brought forward if there is a no deal Brexit).  In that transition period, EU citizens arriving in the UK would enjoy the same rights and guarantees as those who arrive beforehand. The same would apply to UK expats on the continent.

In the long term it has been agreed that after Brexit, all EU citizens will be required to register for “settled status” to enable them to continue to work, live and receive benefits including healthcare in the UK.  This will mean that employers will have to ensure that any EU citizens in their employment have settled status or have applied for it otherwise they will be deemed to be illegal workers and the employer may face a fine of £20,000 per worker.

The registration system will be open for applications in Q1 of 2019, the deadline for registration is 30th June 2021.

Individuals who come under the following categories will be eligible for settled status:

  • EU citizens, or a family member of an EU citizen
  • have started living in the UK by 31 December 2020
  • have lived in the UK for a continuous 5-year period (‘continuous residence’)
  • If an individual has lived in the UK for less than 5 years, they will generally be eligible for ‘pre-settled status’ instead.

EU citizen’s will need to apply even if they are married to a British citizen.

It is important to remember that registering for settled status is not just for the right to work so every family member will have to apply if they wish to reside in the UK the cost of which is as follows:

  • Adults £65
  • Children £32.50

 If an EU citizen fails to register for settled status before the June 2021 deadline they will automatically lose the following:

  • the right to reside in the UK
  • the right to work in the UK
  • access to benefits
  • access to NHS healthcare

There are serious consequences for employers if they are found to be employing an EU citizen who has not registered for settled status.  The Home Office has the authority to carry out unannounced audits of workplaces.  If an employer is unable to produce right to work documentation for ANY member of staff (including British citizens) then the Home Office has the power the close that business until all documentation is provided.  If a business is found to be employing an EU citizen who has not registered for settled status by the 30th June 2021 deadline they will be subject to the following fines:

  • £15,000 for first offence per worker
  • £20,000 per worker thereafter

To ensure that they are protecting themselves employers will need to ensure that they have all the necessary right to work documentation for EVERY worker along with proof of settlement status registration for EU citizens.  They will also need to ensure that they are carrying out right to work checks before employing anyone, this should already be standard practice for every new employee as it has been a legal requirement for around 20 years.  The additional requirement now will be that EU citizens will have to provide details of the settlement status registration before they can start work.

The post Brexit future may still be unclear but this is one aspect of Brexit that businesses can start to prepare for now.  For HR advice on how you can prepare your business for life after Brexit speak to us at Solve.