Category Archives: pay

Social care providers flouting minimum wage rules, tax inspectors find

See on Scoop.itEmployment law in a mad world

HMRC has identified £338,835 in back pay owed to 2,443 workers, underpaid by 48% of 183 employers under investigation (Social care providers flouting minimum wage rules, tax inspectors find from The Guardian

Annabel Kaye‘s insight:

Many of our clients are genuinely confused about which hours needs to be paid (on call) and which don’t, but not surprised to hear travel time has been contentious!  Time to send your contracts in for review?

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Bad weather stopped play? Who gets paid when they can’t get to work?

See on Scoop.itEmployment law in a mad world

Annabel Kaye‘s insight:

While businesses are mopping up and waiting for power to be restored – who gets paid?

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Nigella is not the only boss to have a problem with unauthorised expenses

See on Scoop.itEmployment law in a mad world

unauthorised expenses are suprisingly common problem in growing businesses

Annabel Kaye‘s insight:

Are you leaving yourself open to a Nigella  moment when it comes to staff expenses?

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Getting real with PAYE

TaxOn 6th April 2013 the PAYE system changes to a ‘real time information system’ (RTI).  Under RTI  employers are required to update HMRC during the year about changes to staff earnings – so that people on earnings-related credits are not paid out the wrong amount.  This will include benefits and bonuses.

Here are the key points:

  1. Get  employees’ NI numbers on their first day of work with you (if not earlier).
  2. If you use a payroll bureau/agency, your payroll cut off date may be earlier in the month as they will need to collect and process more information. Make sure you note the new  deadlines they send you.   Give yourself time to collect and report on the new information.
  3. If you run your own payroll, make sure your software is up to date with the latest versions – check with your software provider for when “real time compliant” upgrades are available.
  4. If you are still on a manual payroll system, take advice on how to comply. It may be time to get a payroll bureau or some software.

New starters

  1. You’ll need the employee’s National Insurance number. If the paperwork supplied by the employee (P45 etc) does not give you this information, you can get HMRC to do a trace for the number – the form to do that is available from this HMRC’s website
  2. You have to check eligibility to work in the UK.  There is a help page setting out which documents you need to see (and copy) – available online.   If you need to use the new employee’s passport for this check, you will also need to give the passport number to HMRC.
  3. You will need employees to sign a declaration stating:
  • Whether this is their first job during the tax year
  • That this their only job OR
  • Whether they have another job or pension


If RTI works employers and employees will be paying the right tax under PAYE and not building up liabilities for underpaid tax that need to be settled the following year (or paying too much tax and having to claim a rebate).

Top tips

If an employee is wrongly classified as self-employed for PAYE purposes, liabilities will be accruing and will need paying later.   You need to be  confident that self-employment is appropriate.  Just calling someone self-employed isn’t  enough – you have to meet the right tests based on the real way you work with them.

HMRC are on to how much tax this can save employers/employees and it is only a question of time before they start auditing some of the more dubious arrangements.

The tax goal posts have moved.    What seemed like a good idea five years ago can be inappropriate today – review your self-employed and freelance arrangements.

From the employer’s point of view, a newly appointed employee now has to serve two years before they qualify for unfair dismissal rights, so employment is an increasingly more flexible option.

For tax advice, please speak to your accountant.  More technical information is available from HMRC.

For a free talk on how employment law includes freelance workers check our KoffeeKlatch website.

If you have out of date arrangements or contracts, now is the time to review them and get it straight – talk to us.

Irenicon Ltd, Airport House, Purley Way, Croydon CR0 0XZ
Tel: 08452 303050 Fax: 08452 303060
Email: Website:


Filed under contract, Freelance Workers, pay

If hurricane Sandy came to your business?

We are always more vulnerable to the unexpected than we think. Not so long ago Croydon businesses (and others in the UK) were struggling with the after effects of riot and fire. Since then flood and landslide have upset a lot of UK businesses as we lurched from hosepipe ban and drought, to floods.
Many businesses had real trouble getting paid by their insurers after disaster struck – some of which was because they kept all their receipts and books in the premises that suffered the disaster! (Note to self — off site backups and storage are not optional.) Others simply didn’t have the kind of insurance cover they thought they had.

Hurricanes are not common in the UK, though we had the rare experience of trading through the 1987 hurricane which was centred at the top of the hill we lived on. Two weeks of power outages and phone outages taught us a lot about contingency planning, and we managed to muddle through somehow. Statistically it ought to be 100 years till the UK gets another hurricane that strong, but there is always something unexpected round the corner for business owners.

What are you staff plans for when disaster strikes? If we get snowed in, or floods take over the area, or transport strikes hit? What would happen if neither you nor your staff could reach your premises (or open them) for a fortnight? It’s a chilling thought for most of us, isn’t it?

The planning for the 2012 Olympics taught many companies that they could have people work from home, or change core hours, and still provide a service. It won’t carry you through if the whole country is off line (like the Eastern seaboard of the USA) but having a plan for what you are going to do about/with/for staff is a good place to begin.

Ask yourself:

1) Who could work from home? What equipment and arrangements would they need? Do we have them in place, or how quickly could we get them in place? Have we done a trial run?

2) What are we going to do if we can’t open our main place of business? Will staff still need to be paid if we don’t open? Do we have a plan to open somewhere else? Do our contracts allow us to designate holiday, lay offs? What are we entitled to do?

3) What if all or some of the staff can’t turn up? What if some do turn up, but very late after long and difficult journeys. Who gets paid? Who doesn’t? Can we set expectations?

4) What about parents whose children cannot go to school? Are they clear about dependants’ leave? Are you?

5) What if your business premises are not fit for use for an extended period of time? Do you have a plan to trade from somewhere else? Do you have insurance that covers you just for the cost of repairing your premises? Or do you have insurance that covers you for loss of revenue too? Check your policy — you may not have what you hope for.

6) If you have legal expenses insurers, do you have to check with them first before you can lay off staff or send them home? You may find you are not insured if you don’t get their sign-off. What happens if your insurers are not available? It’s time to check out the small print.

7) What are you going to do about health and safety? There comes a point when it is not safe to encourage people to travel to work/stay at work, etc. How are you going to judge when it is time to say enough is enough?

Many small businesses never recover from the financial losses of a disaster. Many big businesses only cope by calling on the resources of other divisions or companies within the group. Whilst disasters can be times of great camaraderie and heroism, they can also be times when businesses and jobs are swept away, never to return.

Our hearts go out to the people affected by the hurricane on the East coast of the USA. But it’s also a warning to us to be ready for the unexpected.

If you want more information on who is entitled to be paid when disaster strikes, click here

Annabel Kaye is Managing Director of Irenicon Ltd a specialist employment law consultancy

Tel: 08452 303050 Fax: 08452 303060
You can follow Annabel on Twitter

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TUPE or not TUPE

The TUPE regulations [the Transfer of Undertakings (Protection of Employment) Regulations 2006] cover a range of scenarios –   from mergers to ‘service provision changes’ – which occur when the work being done by an ‘organised grouping’ of employees (which can be just one person) is moved to another organisation.

A fortune has been spent on legal fees arguing about when moving a piece of work from one provider to another is a “service provision change”, and so is, or is not, covered by TUPE.   You can see in the case reports the desperation of legal advisors and HR teams who simply failed to realise early enough that the Regulations applied to their circumstances.

Whilst there have been some useful cases about what happens when the work is entirely dispersed across a wide range of organisations (no TUPE), the majority of contracting-out exercises (and  contracting-back-in,  and change-of-service-provider  exercises) are covered by the TUPE regulations and are likely to remain so for a while.

TUPE is a bit of a melting pot for HR and employment lawyers, since it is also part of the commercial contracting and purchasing (or sales) side of the organisation, and the thinking of those functions does not always incorporate what HR need to do to make the process work.

In simplistic terms, an organisation considers outsourcing when the function/individuals:

  • are too expensive to retain in house for the benefit they deliver;
  • are isolated experts on specialist subjects for whom the organisation can offer no ongoing professional development or support;
  • are  not delivering the right performance against budget;
  • where an external body has made a policy decision this should be so

Whatever the reason for deciding, the end effect of TUPE is as profound in psychological terms as it is legally.

Think about it this way.  Imagine you woke up this morning with a complete stranger beside you, only to find out that the law regarded you as having been married to each other for years.  Not only that, everything the other person did with regard to your household legal affairs is something that is binding on you.  So if your new (but in law, longstanding) partner ran up a major credit card bill before you met them, you are required to pay the bill.   That is how it is for an employer who has just TUPEd in a team.

And how about being the person transferred.  Suddenly you are ‘in bed’ with a complete stranger (or worse someone you know well and positively decided never to date, never mind marry).    You are being passed around in a crazy wife-swopping party and you didn’t ask to go to the party.

No wonder people go into denial and say – this can’t be happening to me.   But TUPE is real, and it does have this effect.    You can see why people spend a fortune litigating and saying “this can’t be applicable to me”.

To be continued …..

If you want to join our free KoffeeKlatch seminar to talk about TUPE register via

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060 Website:
You can follow Annabel on Twitter

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Filed under benefits, contract, employment law, free stuff, pay, redundancy, TUPE

Workplace fall out from the riots?

A  lot of businesses will wake up today with problems stemming from the riots.  With clearing up and sorting things out, the sad reality is that many small businesses are tipped over the edge by looting and damage and will not be reopening when their insurance money eventually comes in.

For those whose who are clearing up and carrying on today, here is our short guide to the employment law FAQ we advised on last time there were a lot of riots.

Other duties – can I ask staff to do something unusual?

Employer’s normally need to contract for flexibility but in times of unexpected disaster you can  ask your staff to do duties they normally wouldn’t undertake.  It is not unreasonable to ask managers to wield a broom in these circumstances.  Most staff will be happy to muck in and help out. 

Be careful that you do not ask them to do anything dangerous, since health and safety has not been suspended, even if law and order has.  If a member of staff refuses their regular  or temporary duties on health and safety grounds you should take advice before continuing to insist.

If you are unlucky enough to have an uncooperative member of staff we would be happy to advise (new callers get 20 minutes free advice which should cover this).  

Employers and employees need to work together to find a way through this,  but it is important to know where the legal land  lies

Workplace shut?

If the workplace is entirely ruined or shut – beyond the staff helping to clear up then you should be aware that staff can be sent home but they may be entitled to be paid.  You need to look at your contract to see if they are entitled to be paid their normal rate of pay.  Sending staff home unpaid without consent can trigger constructive dismissals and you need to have some idea of what you are doing before you set off.

Your staff can agree not to be paid, or agree to take any unused holiday, but if they are not being paid, despite their agreement they will still be entitled to guarantee pay.  This is a statutory right.

In any event, anyone who can’t work because the workplace is closed has a default right to guarantee pay for the first five working days in any three month period.  The current rate is 50% of a day’s pay subject to a maximum daily payment of £22.20. 

Staff unable to attend

Some staff will have had their homes, or journey to work affected and eve if your workplace is open for business as usual, they may not be able to attend work on their normal basis.   

If your business has been otherwise unaffected you may be in a position to ask them to make up the missing hours at a later date.  If so, make sure you keep a proper record of which hours are missed, since memory fades and can trigger disputes.

In reality hourly paid workers may not be entitled to be paid for not being at work except under holiday and other paid absence schemes, so you should be sure you know what you contracted do, and what you are thinking of doing beyond the contract, so that you don’t get in a muddle and think you are obliged to do things you can’t afford.

Children can’t get to school

Some parents may find their children cannot get to summer school  or child minders booked for the summer holidays (even though they could get to work).  Parents are entitled to emergency unpaid dependants leave to sort out childcare and take care of children.   Some employers have contracted to pay specific number of days.  If you have not gone beyond the statutory entitlement it is to unpaid leave.

Parents often ask for annual leave at short notice to ensure they are still paid.  Many parents are already on annual leave now that the schools have broken up.

Where the job is suitable, and the children are old enough you might want to consider temporary home working, if the facilities for homeworking are there or quickly and easily assembled.   You need to take a few moments to be quite clear whether this is working at home for the normal hours (location shifting) or whether this also includes changing the hours (time shifting) so some work is done when the kids are in bed,e tc  and what duties you want done.  Although this is a useful short term measure, one of the problems with home working is figuring out how to measure what is being done.  Make short term arrangements if needed so you can get back to this once the initial crisis is over.

Customers chased away?

Some businesses will be open, staff available, but the customers may not be quick to return to areas that have been severely damaged.  You should keep a careful eye on your turnover and expenditure since this can be the last straw for some businesses.

Making payroll

If things are so bad you think you may not be able to make payroll, contact your bank and your accountant straight away.  We all hope the insurance companies will operate some kind of fast track system, but fast in insurance is not the same as fast in business and you need to take long hard look at what payroll is, and how much is in the bank (or not) and how much money is really going to be coming in over the next few weeks, particularly if your premises are in a badly affected area.  

Missing pay dates without agreement can trigger a constructive dismissal, never mind financial chaos for the staff, and difficult as it is, it is best to be honest with people and set out how things are, rather than make promises you can’t keep.

Have a cup of coffee with us

If you have questions we haven’t dealt with, please  email us on  We will be happy to help.   We will be organising a few free telephone conferences (koffeeklatches as we call them) to support employers in Croydon.  Some will be during normal working hours and some outside them.    If you think you would like to participate email us on letting us know what you want to discuss and whether you would prefer inside or outside normal office hours.   We can then make sure you know when they are.

Our heart goes out to all our business clients, and all the business community who are affected by the rioting.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060 Website :
You can follow Annabel on Twitter

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Filed under contract, free stuff, pay, Riots