MEMBERSHIP INSIGHT
contributions (NICs) are calculated on an annual basis on an income above £8,164 on both payrolls. The individual is concerned that they are not paying NICs on either scheme. A: Technically, it is perfectly correct that each PAYE calculation should treat the NICs separately and that there would be no contributions made as long as the two companies are totally separate entities. If they were just subsections of the same organisation where there has been a decision to run with separate PAYE schemes, the NICs would be calculated on the aggregated earnings. So long as you are sure the two companies are separate legal entities then it is correct to calculate as two employers. Q: We have a client who had a new employee start on 7 August. Their contract states that they will be paid on the last day of the month with 1/12th of their annual salary. Their initial salary was calculated using the following formula: 1/12th of annual, less four days’ pay for 1–6 August. Though we know there is no definitive way of calculating a salary (our bureau uses the salary ÷ 260-days method), could you please let me know if you agree/ disagree with this as a suitable method of calculation? A: Apportionment of pay can be complex; there are several methods which can all be correct. What you need to establish is whether this is covered by the employment contract; if it is then you need to follow that procedure. If not, there may be a custom and practice that has become an implied part of the contract. Alternatively, if there is nothing in the contract you would expect to use provisions of the Apportionment Act 1870 which states that you would divide annual salaries by 365. However, your client may wish to consult an employment law specialist or ACAS for clarity. Q: Is an employee still entitled to statutory shared parental pay (SShPP) if they leave and go to work for another employer? A: Employers must continue paying SShPP to employees who have left their employment for any period of statutory shared parental leave (SShPL) they have agreed to following the employee’s notification of entitlement and intent. However, SShPP is not payable for any complete week in which the employee works for the employer except for: SShPL in touch days (SPLIT) days, or working for another
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Q: Within my organisation it is my responsibility to prepare and publish the reports to comply with gender pay gap legislation. I am looking for guidance in relation to term-time employees and how their hourly rate should be calculated for the purposes of gender pay gap reporting. A: In this situation you will need to use the same method of calculation as you would for other employees. However, Regulation 7 of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 may apply to your term-time only employees. This is where the employees have a fixed hourly rate, and a set number of hours they would work under their contract that do not vary, in which case the employer would use the contractual hourly rate method. The employer would also need to add a narrative to explain the hourly rate. There is guidance provided on this subject on the ACAS (Advisory, Conciliation and Arbitration Service) website which can be accessed here: https://goo.gl/EKYWLk. Please refer to the top of page 30 where the guidance explains about employees with a fixed hourly rate of pay. Q: I am trying to establish if an employee who is not contracted to work on a Monday can be paid for a bank holiday Monday? A: You would need to ensure that you treat this employee in a similar manner to other employees. So, where the employee is a part-time worker you should ensure that that they are treated the same as a full-time employee who is not contracted to work on a Monday. This is a direct link to The Part-
time Workers (Prevention of Less Favourable Treatment) Regulations 2000: https://goo. gl/d8YK4w. Q: My company’s annual leave entitlement is currently 25 days plus the eight bank holidays. When employees are on maternity leave what is the minimum leave requirement and are they entitled to the bank holidays? A: The minimum UK statutory paid holiday entitlement is 5.6 weeks which for a five- day-week worker equates to 28 days; and if an employer wishes to apportion some of the holiday to bank holiday dates they are entitled to do so. However, in this case the company provides more under the contract, so you would use the 25 plus bank holidays for a total of 33 days. Whilst an employee is on statutory maternity leave (SML), the employer should accrue holiday as per the contract i.e. both annual and bank holidays. Please find below direct links to GOV.UK and ACAS: ● http://bit.ly/2h9dkkN – the employee is not able to take SML and holiday, so the holiday must be accrued ● http://bit.ly/2Anw34c – both the 5.6 weeks (which is 28 days for a five-day worker) and any other holiday which is contractual must be accrued. Normal holiday of 25 days would not meet the national minimum of 5.6 weeks for a five-day worker ● http://bit.ly/2uHGLmx – this sets out what happens when someone is on SML Q: We have a client who is a director of two separate companies and is receiving a small remuneration on both pay as you earn (PAYE) schemes. National Insurance
| Professional in Payroll, Pensions and Reward | December 2017/January 2018 | Issue 36 6
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