The Great Resignation

The great resignation

May 2022

In a recent blog we wrote about the increase in, and demand for, hybrid working. In that we observed ‘that many workers have adapted rather too well to the new world order and are in no hurry to return to the old one. Is it so surprising that the world of no commuting, no hot desking and lunches at home has proved to be altogether more desirable?’ So, an examination of the great resignation phenomenon comprises a natural sequel.

The great resignation
The great resignation

What is the great resignation?

It’s the idea that the Covid pandemic has prompted a tsunami of life stocktaking. And that this introspection has led to a big rise in the number of people giving up their jobs – either to a new one that is willing to give them the hybrid working that they seek. Or in some cases to carve out a new life outside of the workplace. It began in 2021 and is continuing in 2022.

, quotes a survey of 1,000 UK workers. It showed that almost a third (29%) of UK workers are considering finding a new job in 2022. The findings also revealed the industries most at risk from this mass staff migration. We have legal workers at 44%, IT and telecoms at 42% and sales, media and marketing at 40%. It further uncovers why workers want to leave their current jobs and why almost one in three (32%) have put it off.

It’s clear that companies with a hybrid or remote working offer are not so likely to suffer this resignation problem. Indeed, one in three (28%) of workers admit that flexible working policies encourage them to stay where they are. Something further supported by the reasons workers gave for wanting a different job. Almost one in five (16%) of those who wanted to quit cite their employer forcing them to the office/workplace when remote working is quite feasible. Alongside that statistic, 20% feel their employers show favour to those who work in the office over their remote workers.

Other factors

Despite all the above, the main reason (23%) that workers look elsewhere is salary-related and their employer not offering pay rises and/or bonuses. In addition, there is a loud call from employees for better technology and ways to stay connected with colleagues. 13% chose to leave a job because of poor investment in collaboration technology.

How can employers combat the great resignation?

Well, in the first instance, as Timewise suggests, see it as an opportunity not a threat. They suggest you grab hold of this opportunity to plan for the long-term and look to the future. Why? Because, as Timewise point out, it’s clear that the effect of the pandemic on how we work and the subsequent shift in employee priorities, doesn’t look like going away. There’s an understandable temptation to panic and put in place short-term initiatives in an effort to keep your staff. But putting energy into building a culture for the support of long-term employee retention is more worthwhile.

Well, you might:

  1. Involve your staff in decisions and discussion around hybrid working. If you’re partway down that path then it’s crucial you involve your staff in the process. Imposition of work arrangements is almost guaranteed to make your staff up sticks and go.

  2. Undertake a skill’s audit – if you’re a smart employer you will use this period, this situation, to get your business ahead. Think about the skills you’ll need to get to the forefront and upskill and reskill your staff to help them help you to succeed. There are two benefits to this. In the first place, it’ll help you stay competitive. And in the second it will show your staff how much you value them and want to invest in them.

    Once you’ve got your findings, use them! Use them to design roles that can deliver against both the needs of your business and your staff. And remember at all times the importance of in-building into your roles, the flexibility that’s such a high priority for millions of workers right now.

    When recruiting

    Be crystal clear about what you’re offering in terms of flexibility. There’s a big mismatch between the percentage of people wanting flexible working and the amount of it available. So offering it is sure to give you a competitive advantage in the search for talent.

    Get in touch

    Go-Legal can and will help you with anything discussed in this blog – or on any other topic of course.

    We can give support with writing flexible working policies, recruitment and more.  So don’t wait – get in touch. You’ll find all our contact details on our website here. 

    And why not connect with me on Linked-In?

 

 

 

 

 
 
 
 

 

They’ve Seen the Future and it’s Hybrid Working

Hybrid working - women on bed working from home

February 2022

They’ve Seen the Future and it’s Hybrid Working

Hybrid working – While the Covid pandemic is anything but over, we’ve seen, post lockdowns, a gradual return to the workplace. Yet the returning to work process hasn’t been anything like as straightforward as was first predicted by many business leaders. It turns out that many workers have adapted rather too well to the new world order and are in no hurry to return to the old one. Is it so surprising that the world of no commuting, no hot desking and lunches at home has proved to be altogether more desirable? Indeed, this piece from The Times, opines that 77 per cent of the UK workforce say they would prefer a mix of office-based and remote working in the long term. They’ve seen the future and it’s hybrid.

Hybrid working - women on bed working from home

A vision of the workplace future

Backing up the hybrid-working vision of the future is research from analysts, McKinsey and Company. They estimate that over 20 per cent of the global work force could be as effective working with remote working, three to five a days a week, as they would be from an office. But, as the CIPD points out, for many organisations, moving to hybrid working can’t happen without an appreciable culture shift. Also, there’ll be a need to establish new working methods and new associated policies and practices.

Employer learnings

While employers can take some learnings from the pandemic-driven-working-from-home there’s no escaping that hybrid working places greater demands on managers and organisations than the urgent move to home working during the lockdowns.

It’s clear that organisations have much to consider when implementing a hybrid approach. There’s no rushing a phased return to the workplace. Not all workers will be able to go back at once. Early signs are indicating a situation with some staff working from home and some from the office. Or even a combination of the two.

Whilst, as always there will be industry variations, it is fair to generalise that hybrid working is here to stay. As The Times article (see link above) contends: ‘The rise of hybrid working forms the biggest change to the workday since the concept of nine-to-five went mainstream over 100 years ago.’

The debate now centres on maximising the benefits from the recognition that remote performance of job roles can be effective, whilst getting the balance right with the benefits of collaborative working and the need for interaction with colleagues. The survey results in this BBC News article are, it’s arguable, no surprise https://www.bbc.co.uk/news/business-60421056

Higher fuel costs are bound to have an impact, but whether this changes the dynamic remains a moot point.

Joined up working

One of the greatest challenges for teams flung out here, there and everywhere, is that of joined-up working. Research carried out by ServiceNow found that a whopping 91 per cent of executives continue to have offline workflows including document approvals and more. Meanwhile, around 48 per cent voiced concern about the reduction in collaboration between business teams.

It’s evident that employers, are going to have to find ways of balancing the expectations of employees with the needs of your business or organisation. You’re going to need a map of what your people do on a day-to-day basis and how to determine which roles best suit remote working and which don’t.

Challenges abound

It’s fair to say that all the concerns expressed above reflect the post-pandemic experience of larger corporations. Yet it’s true to say also that similar challenges face all employees and employers in businesses of all sizes. You’re going to have to find solutions to ensure your people remain productive and content in their work.

It’s all going to take some navigating that’s for sure. But the good news is that you don’t have to do it on your own. Go-Legal HR can support and guide you through it – so don’t struggle. Get in touch now.

What Plan B Involves for Employers

What Plan B Involves for Employers- a clock with a sticker saying time for plan b

6th November 2021

What Plan B Involves for Employers

Plan B and employers

There’s a great deal of talk at the moment about the need to implement Plan B apropos Covid and the forthcoming winter season. So, in this post we’ll examine what that means for employers should the government choose to move to Plan B.

What Plan B Involves for Employers- a clock with a sticker saying time for plan b

Before we get to that though, who is calling for Plan B – and why? The BBC news website reports that daily Covid cases have risen to 50,000. In the wake of those numbers, health secretary Sajid Javid has commented they could double.

The Labour Party has now joined a number of organisations which last week called for some sort of action. Meanwhile, SAGE, the government’s scientific advisory group, stated the need to prepare for rapid deployment of plans to reintroduce stricter Covid restrictions.

The cry is also getting louder from the NHS Confederation and the British Medical Association who have accused the government of wilful negligence.

What is Plan B?

The current strategy (Plan A) focuses on testing and vaccination to help prevent the NHS from becoming overwhelmed. But Plan B is a set of contingency measures that the government will trigger if the pressure on the NHS becomes unsustainable. It comprises:

  • Compulsory face coverings in some settings
  • Powers to introduce vaccine passports
  • Encouraging people to work from home
  • Communicating the need for caution

What does Plan B mean for businesses?

If you’re an employer that’s only recently got your staff back in the office – brace yourself. It’s more than likely you’ll have to return to remote working measures in the event of Plan B being implemented. You should by now have a good idea how you can best achieve that. But, should you harbour any doubts, Go-Legal can of course advise.

At this point we can only stress that you need to be aware and prepare for a return to remote working. If you don’t then you risk losing staff to other employers who are prepared and are leaning into the situation. Don’t make the mistake of thinking your staff will stick with you if you fail to plan for them having to work through a new lockdown.

What should you do to prepare?

In the first instance, as Ann Francke, CEO of the Charted Management Institute says: Plan! Then plan and plan some more! She further advises managers to have frank conversations with their staff and teams to get them onboard with a strategy. Part of this planning entails making sure you have the contractual entitlement to enforce any changes to your staff’s working location.

What if your staff can’t work from home?

In this circumstance, you must have measures in place to ensure their continual safety and compliance with government guidance. That is certain to include wearing a face covering.

To guard against push and hesitancy in your staff, communicate with them often.

In practical terms, looking after workers should be a business priority, says Ryan Exley, a content developer at Institution of Occupational Safety and Health (IOSH). He further advises, and we agree, it’s best not to sit on this until the government moves to implement Plan B. Better by far to have regular reviews of your Covid safety measures. That way you can be sure they’re as effective as they can be. Then to act to amend where necessary.

In offering a balanced view, it’s fair to point out that some commentators within government insist that Plan B may not be necessary. But, as the infection rate continues to rise and the seasonal pressure on the NHS builds up, we cannot rule out a return to some form of restrictions. Restrictions that we thought we’d left behind with the full implementation of Johnson’s road map. 

Go Legal HR can assist you in all aspects of supporting your staff through the winter months and implementation of Plan B. You’ll find all our contact details here.

 

 

Returning to Work Post Pandemic

Returning to Work Post Pandemic - figure and words anxiety and stress

September  2021

Returning to Work Post Pandemic

We’re getting back to normal – or something like it – and/or beginning to live with the ongoing challenges of Covid-19. As we do so we’re seeing that returning to work post-pandemic may be somewhat different to our previous work experiences as employees/employers.

Thus, the full return to work with the ending of covid restrictions has seen a mixed response. One that ranges from a complete return to the office to the acceptance that working from home is good for both employers/employees. Hybrid working is on the increase there’s no doubt.

Yet, it won’t all be straightforward. Situations are sure to arise where employers and employees don’t agree on the correct mix.

For instance, there’s an increased focus on mental health and stress issues created by the pandemic with employees concened about mixing in large groups. Add to that, an increase in flexible working requests because people have got used to working from home.

Returning to Work Post Pandemic - figure and words anxiety and stress

Government proposals

The government is proposing to give all employees the right to request flexible working when they start new jobs. A consultation is set to launch on the proposals this week.

The plan would allow all UK employees to request a flexible working arrangement from their first day at a new employer. Whereas six months’ service is the current requirement. There’s also a suggestion that employers should respond sooner to such requests and give fuller explanations for refusing such a request.

The Department for Business

The Department for Business started examining a range of flexible working options in 2019. This study included working different or condensed hours, job sharing and remote working. They found:

Before the pandemic there was a huge resistance to people working from home. But the reality is they are as productive, if not more so, in most cases. Post pandemic, it’s understandable that the focus has changed.

Going forward, flexible working requests are likely to include working from home. Whereas many employers would have considered it unpalatable pre-covid, it will become reasonable to consider.
 
The main point here is that employers need to sit back and take stock and not be dismissive. Even before the new proposals become legislation employers must show themselves open to reasonable requests for flexible working. Requests that are sure to include proposals to work from home.
 
The potential repercussions of employers getting this wrong can be costly. A recent tribunal awarded £185,000 in damages to an employee denied a flexible working request to leave work earlier to collect her daughter from nursery. This happened because the employer was dismissive of the request and failed to give active consideration to it. Not an example of asking to work from home no. But the case shows that the risk of being dismissive of such requests is clear.  And not only in relation to children either. On the increase, post pandemic, we have pet-related flexible working requests. 
 

Pets in the workplace

How do you, as an employer, feel about having pets, other than assistance dogs, in the workplace? Is this something you’d offer to help your staff ease themselves back into work?

We’re familiar with the concept of separation anxiety in babies and children when they start nursery and school. But separation anxiety in pets and between owners and their pets is a thing too – as this article from Digiday reports.  

dog wearing specs sat at laptop

Pet ownership explosion

It appears that the pandemic saw an explosion in pet ownership. And now, as they return to work, these new pet owners are concerned about being separated from their furry friends as they go back to the office. 

But, as the article goes on to state, not everyone will have to separate from their four-legged friends. On the other side of the pond at least, ever-growing numbers of employers, acknowledging the role pets play in their employees happiness and mental well-being are giving serious consideration to operating pet-friendly offices. ‘Banfield Pet Hospital in Vancouver, Washington, ran a survey which found that half of 500 C-suite executives would allow pets upon the return to the physical workspace, while 59% said they would allow more flexibility for workers who want to remain remote because of their pets. ‘

A note of caution

The problem with this approach is that it’s rather making the assumption that everyone in a work place would welcome the presence of pets in the work place with unbridled joy. But what if they wouldn’t? What if you have employees for whom the presence of, for the sake of argument, dogs in the workplace, would cause them stress. And it might – and for very valid reasons.

It could be that you have employees with a real fear of dogs. Or employees with a serious allergy to dogs. In that instance, it’s one thing for someone with a dog allergy to take an anti-histamine so they can be irritation free in the presence of a dog on the odd occasion. But to ask such a person to work with dogs in close proximity day-in-day-out could have a major negative effect on their physical health.

So, in allowing one employee to ease their particular stress by bringing their dog to work you could cause another staff member a quite different but just as valid, stress.  

If you’re an employer considering offering a pet-friendly workplace then you’ll need to offer a policy outlining the expectations of the workplace. That way all employees can be aware of their responsibilities. Go-Legal HR will help you put such a policy in place – so you don’t have to go barking mad.

Get in touch today. You’ll find our contact form on our website here.  

Or, should you prefer, drop an email to: [email protected] or call 07801 709945.

 

 

 

 

 

 

Covid-19 and Holiday Entitlements as Restrictions End

Covid-19 and Holiday Entitlements as Restrictions End

July 2021

Covid-19 and Holiday Entitlements as Restrictions End

As we move towards the end of the COVID restrictions with the much hyped freedom day on 19th July, the debate continues. What debate is that I hear you cry? The one about how much freedom we’re going to have to go on the holiday of our choice of course!

Green for go, red for no, amber for well, you shouldn’t, but you can if you want to chance it. And several other variations depending on whether you can afford the PCR test or can quarantine when you get back. And that’s only talking about leaving or returning to the UK. What about restrictions in the country you want to go to?

Covid-19 and Holiday Entitlements as Restrictions End

Yet, despite all that,  attention will turn to getting away on holiday. It’s inevitable. And let’s not forget that employees must book the time off from work in the first instance.

So, to state the obvious, there are issues that both employers and employees must consider as we move away from lockdown restrictions and furlough leave etc.

A two-fold issue 

As discussed last year, we may still have a two-fold issue:

  1. Employees still focused on having a holiday this year if they can get away.
  2. Employers having enough resources available to service customers while employees take their holiday entitlement.

The solution may not be straightforward

It shouldn’t surprise anyone that employees will want to save their holiday allowance for when they can travel again. Likewise, it shouldn’t surprise anyone that employers will prefer their employees to take holidays when business is slow. Rather than as it gathers pace again.

Scientists are predicting yet another wave if we’re not careful. Yet there appears to be enough evidence that the vaccination programme and the break between infection and serious illness/deaths points to life getting back to normal in a way not possible this time last year.

Thus, as the job retention scheme comes to an end in September there may still be employers who haven’t managed their staff holiday entitlements through the measures available and will have employees with holiday entitlements they need to use up.

So – what IS the situation with holiday entitlements?

It’s been the case throughout the pandemic, that anyone on furlough leave would continue to accrue holiday and have any holidays already booked credited to them. Though it’s likley there’s been fewer bookings this year than in 2020.

It’s also been the case that employees on furlough leave could still take holiday, but have an entitlement to 100% of their salary in such circumstances. Though it’s not clear how widespread a practice this has been (by employers or employees) in avoiding a build-up of otherwise unused holiday entitlement.

It’s not all about the furlough though

It’s not all about those on furlough leave though. Because employees in work will have been less inclined to book holiday during the pandemic.

Amended government regulations

The Government amended the regulations last year to help address this – Working Time -Coronavirus Amended – Regulations 2020 and this still applies.
 
The government guidance on this situation already provides for holiday entitlement that employees can’t take in the current leave year. It allows them to carry it over for up to two years.
 
The idea here was to address employers’ concerns about:

1. A lack of resources or …
2. … from a statutory perspective, a potential failure to ensure employees take the minimum of their holiday allowance under the working time regulations.

Please note, the aim here is to help employers and is not a licence for employees to carry holiday forward. Government guidance places emphasis on taking every opportunity to take leave within the current leave year.

NB: it doesn’t apply to extra contractual holiday over and above the statutory minimum.

Arrangements already in place

Many of you will already have contractual or discretionary arrangements. Arrangements that allow your employees to carry over XX days holiday. And these may continue to be adequate.
 
If you find that you need to use quieter times of the year – or even what’s left of furlough leave – you have the legal right to ask employees to take holiday.
 
I say ‘ask’, because that would be the best practice way to achieve this. But it’s your entitlement to place your employees on holiday for a defined period. So long, of course, as you give the employee(s) involved the minimum notice period. This is: double the amount of time you want to place them on holiday for.
 
So, if you want them to take a full week on holiday you must give two weeks’ notice of the start of that holiday. Likewise, if it only involves part of a week, it’s still twice as much as the number of days involved.
 
This may not be straightforward if you still have employees on furlough leave. The commercial effect of having to find the extra 30% of salary in July – (40% in August & September) – may not be possible. But the option is there to manage any excess leave that has built up.
 
There are other issues to consider if you want your employees to take their holiday during furlough leave or beyond.
 
Go-Legal HR will advise you on all the ins and outs of this situation so get in touch now to find out more.
 

Government advice on Covid-19 and holiday entitlements as restrictions end

 
The Gov.UK website guidance provides an outline on the operation of holiday entitlement and pay during the coronavirus, but we’re happy to interpret that for you and advise you as appropriate.
 
Call: Office: 01793 877787 Mobile: 07801 709945
 
Or drop an email to: [email protected]

 

 

 

Office Working versus Home Working

Office Working versus Home Working - child's toy car on a map

June 2021

Returning to the Office vs Home Working

We’re now approaching the end of Johnson’s road map out of Covid 19. The original one suffering almost inevitable delays. So our thoughts turn to getting back to the office rather than working from home. Or do they? Are the battle lines drawn between office working versus home working? Or is it in fact more nuanced than that?

Office Working versus Home Working - child's toy car on a map

Understandable expectations

A growing expectation that the removal of all restrictions would coincide with a move away from home working and back to the office is an understandable one. 

If companies/employers have been preparing for workers to return to the office they now know they’ll have to wait a bit longer before it can happen.
 
Most remaining coronavirus restrictions remain in place until mid-July.
 

Caution needed

But a further note of caution is appropriate. Because there’s no actual statement or indication that working from home will stop when the remaining coronavirus restrictions get lifted. Official guidance remains that everyone who can work from home should still do so.
 

The government is due to update its guidance and further commentary on social distancing. We expect to get that guidance before the remaining restrictions reach an official end.

Speculation is rife

There’s much speculation about hybrid working and working from home being here to stay. Amongst that is a desire from employers and employees alike to keep such flexibility. Thus it’s best not to assume there’ll be an automatic rush back to the office when the remaining restrictions disappear.

The government wants to help companies that have suffered during lockdown. That includes those in city centres relying on office workers. And there’s already been some lobbying to get people back into the offices.

There’ll come a point when the populous will expect the government to clarify whether people must return to the office from the sanctity of their home environment. Thus it would be prudent to anticipate some pinch points with employers. These will occur when employers expect a return to the office but have employees wanting to stay working from home.

Many companies have already said they expect to have a mixture of staff in the office and at home. Several firms have said that workers will be able to decide what their base will be. The pandemic has shown that home-working can be effective and companies have already identified that shutting offices or reducing office space can save money.

A rise in flexible working

The whole situation may lead to an increase in flexible working requests. Though not quite the same as working from home instead of the office such requests will be a natural consequence of the situation.

Employees can ask to keep working from home, but the employer does not have to agree. That decision will depend on factors including individual circumstances and the type of job.

None of this supports any assumption that the ending of restrictions will lead to an automatic return to the office.

Points to remember

We should remember that the current guidance requires employers to:
 
a. complete a Covid risk assessment and … 
b. … take steps to prevent transmission. That includes:
 
  • Minimising unnecessary visitors
  • Ensuring 2m (6ft) social distancing, or 1m social distancing with extra precautions
  • Frequent cleaning
  • Extra hand washing facilities
  • One-way systems to minimise contact
  • Using back-to-back or side-to-side working (rather than face-to-face) whenever possible
  • Staggering start/end times

We’ve all been doing this for well over a year now and it would be advisable to remember that this is still the case until government updates its guidance . It’s worth noting that the HSE has carried more than 200,000 inspections to check companies are following Covid rules, and can force firms to take action if not.

In summary

The main message here is to await further guidance from the government. And avoid assuming there’ll be an automatic return to the office when all covid restrictions end.

Go-Legal HR is here to support you with any HR needs you might have. Whether it’s this issue or another.  It costs nothing to talk!  You’ll find our webform here  or if you prefer to call:

Office: 01793 877787
Mobile: 07801 709945

And why not connect on LinkedIn? 

 

Engaging contractors and IR35

Engaging contractors and IR35 - construction worker

10th March 2021

Engaging contractors and IR35

Do you engage contractors through personal service companies or other intermediaries?

If yes, you should consider reviewing your IR35 position ahead of the changes on 6 April 2021.

Engaging contractors and IR35 - construction worker

For related content see Everything you Need to Know about IR35 here.

What will change on 6 April 2021 apropos engaging contractors and IR35

  • Unless you’re a small company, the off-payroll working rules will apply. Thus, you may be responsible for deducting tax and NICs from (and paying employer NICs on) payments made to contractors.
  • The responsibility for determining the application of off-payroll working rules (IR35) will move to the organisation receiving an individual’s services.

12  factors/indicators used to determine status are:

1. Personal Service –

To be an employee, the worker has an obligation to provide their services personally. If the worker has scope within the arrangement/contract to provide a substitute, this will point away from an employment relationship.

2. Mutuality of obligation –

For an employment relationship to exist, there has to be an obligation from the worker to provide their services. And, also, an obligation on the part of the company/employer to provide work and to pay the worker.

3. Right of control –

An employee has to be subject to a certain degree of control. Yet in practise there tends not to be a need to exercise such control. According to HMRC, it’s the right of control that matters. E.g., employees are usually expected to work set hours each day. Independent contractors are more likely to have the freedom to work when and where they like.

4. Provision of own equipment –

A self-employed contractor generally provides the equipment needed to do the job. In contrast, if you provide a worker with equipment and materials, this points towards employment.

5. Financial risk  –

Individuals risking their own money (For example, incurring expenditure on training to get the skills needed, that get used in later engagements) are less likely to be employees. Self-employed workers may also have to rectify unsatisfactory work in their own time for no further reward.

6.  Opportunity for profit  –

Likewise, a person whose profit (or loss) depends on the capacity to reduce overheads and organise work in an effective manner is more likely to be self-employed.

7. Length of engagement –

This is unlikely to be determinative of status in itself. Yet, it’s more likely that an employee will have an open-ended contract. A long-term stable relationship is more likely to be one of employment than an intermittent infrequent one.

8.  Integrated within the organisation –

If an individual is “part and parcel” of a client’s organisation, they are more likely to be an employee. HMRC guidance gives the example of someone taken on to manage a client’s staff. As a rule, the view taken there would be that of an integral part of the client’s organisation – though that could end up viewed as a strong indicator of employment.

 9. Employee-type benefits –

Paid leave, membership of a firm’s pension scheme, a right to car park space, access to canteen facilities etc. are all strong indicators of the existence of an employment relationship. Access to policies and procedures may also be a strong indicator.

10. Right to terminate contracts –

A right to terminate an engagement for a reason other than serious breach, by giving notice of a specified length, may be viewed as indicative of a contract of employment. Yet, HMRC would likely view this as a minor factor.

11. Personal factors –

Where you have a skilled worker, working for several clients throughout the year, with a business-like approach to obtaining engagements, guidance suggests a pointing towards self-employment. But, guidance also states that personal factors will usually carry less weight in the case of an unskilled worker.

12.  Mutual intention –

The intention of both parties can be decisive where there’s an even balance in the factors pointing to employment and to self-employment. But yet, a stated intention (for example that an individual is not an employee) will not, without more, be determinative. 

Businesses must ensure they understand the effect of the changes, with status being only one key area to consider.

If you have any concerns about whether you will be in breach of the new rules or simply want to know more, feel free to contact me on 07801 709945 or via the contact form on www.go-legal-hr.com

 

 

 

 

 

 

Everything You Need to Know about IR35

Everything you need to know about IR35 - calculator and tax documents

February 2021

Everything You Need to Know About IR35

IR35 – known also as the Intermediaries Legislation. There’s a lot to talk about regarding IR35. So this blog examines the main principles involved with IR35 with more to follow in the weeks leading up to the deadline. 

Everything you need to know about IR35 - calculator and tax documents

 HMRC defines IR35 as off-payroll working.  IR35 is shorthand for a particular piece of UK tax legislation. It’s designed to identify contractors and businesses that are avoiding paying the appropriate tax. They could be doing that by:

  • Working as ‘disguised’ employees
  •  Or engaging workers on a self-employed basis to ‘disguise’ their true employment status.

 April 2000 saw the introduction of IR35. It takes its name from the original press release published by Inland Revenue (now HMRC) announcing its creation.

So, what is IR35? And do you have any circumstances/relationships that will fall under the new rules? Let’s have further dig into everything you need to know about IR35

Put another way, IR35 is a set of rules. These rules help HMRC determine the tax and NICs that people contracted to work for a client via an intermediary should make. The new rules are intended to ensure everybody who should have ‘employee’ classification for tax purposes, pays PAYE tax and NICs as an employee would.

This is important from an HR perspective, if you either now, or in the future, engage workers through intermediaries – usually a personal service company.

An intermediary will usually be the worker’s own personal service company. They could also be a partnership, a managed service company, or an individual.

The rules make sure that workers, who would have been an employee if they were providing their services straight to the client, pay roughly the same tax and NICs as employees.

It’s now essential to review whether you have any arrangements that the new rules would capture. And would therefore, expect you to calculate the relevant tax and NIC contributions.

Questions that you, as an employer, should ask yourself so that you can 

  1. What are the IR35 off-payroll reforms
  2. How will they affect your organization?
  3. Have you considered any practical steps you may need to take to ensure that you:
  • Remain compliant with the law and …
  • … manage any extra liabilities.

Now  – as pointed out at the top of this article, April 2000 saw the introduction of the Intermediaries Legislation. And there are a set of conditions that determine this status that warrant further consideration:

The ‘off-payroll’ addition to the existing IR35 rules saw roll-out across the public sector in April 2017.

The rules will now hit private sector businesses from April 2021. 

The Covid-19 crises caused deferment of the planned rollout from April 2020. These new rules mean that clients (not contractors themselves) will be responsible for determining the employment status of contractor.

Vital that you understand the rules 

The requirements vary a little depending on whether the intermediary is a company, partnership or individual. But the new rules create the need to assess any contractor/worker arrangements you may have or would consider in the future. Hence, it’s vital you take the necessary steps to understand the new rules and be compliant with them.

A lack of understanding of the rules and regulations can lead to the imposition of financial penalties on your company.

As a first step you may wish to do a quick assessment of your IR35 compliance  here: https://www.gov.uk/guidance/understanding-off-payroll-working-ir35

Or, if you want someone to help you through it or even do it for you then Go-Legal HR will help you.  All our contact information is on our website here. 

And you can connect with Paul Himple, MD of GO-Legal HR on LinkedIn here. 

 

 

The Job Retention Scheme Extension

The Job Retention Scheme Extension - woman leaping from a rock to another rock with the word Job on it

4th November 2020

10 Things to Know About the Job Retention Scheme Extension

The Job Retention Scheme Extension - woman leaping from a rock to another rock with the word Job on it

If both you as an employer and your staff are feeling confused at present it’s little wonder! It’s getting rather hard to keep up – we’re on shifting sands and no mistake. First we anticipated the introduction of the Job Support Scheme and expected the end of the Job Retention Scheme. But it’s all changed again. Now there’s a last minute reprieve. This reprieve has seen the job retention scheme extended. In the fist instance the intention of this change was to cover November, but now we have it through to March 2021.

So, in the light of all that the following points are worth clarifying:

1. Employees on furlough agreements until the end of October can now remain on those agreements.
 
2. The Job Support Scheme and the Job Retention Bonus have been shelved for the time being
 
3. Neither the employer nor the employee needs to have used the job retention scheme before. 
 
4. The extension enables employers to furlough employees who started after 20th March for the first time.
 
5. In other words, the scheme is available in respect of employees who were on the employer’s PAYE on 30 October 2020. More specifically, you must have made an HMRC payroll submission containing the relevant employee(s) by 30th October.
 
6. For new employees you must base the reference pay and usual hours on the last pay period before 30th October 2020. Or, for those on variable hours, their average earnings for the period between 6th April (or when their employment started, if later) and 30 October 2020.
 
7. For employees already on the scheme the pay calculation remains as before.
 
8. Employers can claim for the hours that their employees are not working. You can calculate this by reference to their usual hours worked in a claim period.
 
9. When claiming, employers need to report and claim for a minimum period of seven consecutive calendar days.
 
10. For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500 per month for November & December 2020 and January 2021. The government intend to review this in January. It will assess whether economic circumstances are improving enough to ask employers to contribute more.
 
graphic of figure running to word JOB with a clock in the middle
 

Also:

  • Employers will pay employer NICs and pension contributions for the hours not worked.
  • Employees get paid as normal for hours worked.
  • Employers can still choose to top up employee wages beyond the monthly cap at their own expense if they wish.
  • It’s possible to make claims from Wednesday 11th November 2020 UP TO the 14th day of the following month.

Go-Legal HR are here to help

If you need any support with aspects relating to the Job Retention Scheme and furlough leave agreements Go Legal HR can help. It can be difficult to get your head around all the complexities. Don’t struggle! Get in touch now. 

There are three ways to get in touch with Go-Legal:

  1. Send a message via our web form here. 
  2. Drop a note to: [email protected]
  3. Call on 07801 709945 

Government Job Support Scheme: JSS

Government Job Support Scheme

28 October 2020

Government Job Support Scheme

British Summer time is now behind us. November beckons and with it we’re looking at cold fronts.  Meanwhile on the employment front we’re looking at the end of The Job Retention Scheme and furlough agreements etc.  And this last week of October should witness the transition from one type of agreement with employees for whom there’s not enough work, to another agreement under the government Job Support Scheme (JSS).

Government Job Support Scheme- JSS

It’s hoped that the new scheme will mitigate the anticipated rush to restructure and reduce headcount because demand and workload hasn’t returned to pre-Coronavirus levels.

When it was first announced on 24th September, the aim of the Job Support Scheme was to support viable jobs. The view was that it was much less generous than the job retention scheme. But last week’s announcement by the Chancellor has created a new financial mix. It’s one that has the potential to cost employers more. With its minimum working hours requirement, the support offers employees at least 73% of their full salary. But regarding take-home pay, it becomes comparable to its predecessor.

Will it be enough?

Whether it will be enough to offset the anticipated wave of redundancies is an open question.  Employers must weigh the extra cost of topping up staff wages staff on reduced hours against that of making redundancies only to have to rehire and retrain in the future. There may also be reputational damage to consider. Though this may be less of a concern in a Covid-19 driven economic climate.

There is one factor that there’s no overlooking within the cocktail of issues facing employers, in particular in small-medium size businesses. And that’s agreeing the use of the JSS scheme with the affected employees. This was easier to recognise with the job retention scheme as furlough agreements became the norm. But use of the new scheme will have to be agreed in similar fashion.

Two types of JSS in the government job support scheme

There are actually two types of JSS:

  1. JSS Open and
  2. JSS Closed.

The latter is for businesses that have closed or will have to close under lockdown restrictions.

JSS Open will be the more prevalent and this involves the following parameters:

  1. Employees will work a minimum of 20% of their normal contracted hours and they’ll receive their normal pay for doing so.
  2. Employees will receive 66.67% of any “unworked” hours from their normal contracted hours. 
    • The split will be as follows: 5% paid by the employer and 61.67% paid by the government (NB. The employer will pay the full 66.67% to the employee and can claim the 61.67% from the government.
    • The unworked hours contribution will have a cap of £1541.75 per month
  1. Employees will agree to forego the balance of their normal salary
  2. The Employer will pay National Insurance & Pension Contributions on the unworked hours.

Giving flexibility

There’s an argument that the scheme provides businesses with valuable flexibility, allowing them to change working patterns week by week to meet demand. Whilst there is a cost to employers regarding the minimum hours plus 5% of the “unworked” hours, they were already paying 20% of salary by the end of the Job Retention Scheme. And that with the chance of there being no hours worked.  On this basis the scheme may prove attractive to many employers.

There is of course nothing to stop businesses from putting workers on reduced hours without using the scheme. Indeed many employment contracts already have this facility. The key difference with the JSS is that it protects some of the employee’s wages that they would have otherwise lost.

While employees stand to benefit from the government topping up their wages, the need for businesses to also contribute, which they wouldn’t have to if they chose not to use the scheme, may make it less attractive. Yet, retaining reduced hours arrangements or short-term layoffs isn’t sustainable for long periods. Further, as the scheme is in place until April 2021, most employers will use it as an alternative to redundancy.

More cynical observers have pointed to the incentive of the Job Retention Bonus (£1,000 for each furloughed employee still in employment on 1st February 2021) causing employers to defer any redundancy decision until they qualify for the bonus. But the need for retained employees to earn at least £520 per month gross in November, December & January makes this less attractive.

From a more positive perspective, employers may use the scheme to keep experienced and skilled staff. Staff who’ll then be ready to carry on working when business picks up once economic activity gets moving once more.

At the end of the day

In the end, employers may have no alternative than to downsize and reduce headcount. Yet, with the support of the government job support scheme over the next six months, many businesses may explore various combinations through the flexibility offered by the scheme rather than make people redundant and face the cost of rehiring and retraining when the need arises.   

It’s not an easy decision with many factors to consider. And whether you’re assessing the right combination for you to use the scheme or simply want to ensure you use the correct agreement Go Legal HR can help.

There are three ways to get in touch with Go-Legal:

  1. Send a message via our web form here. 
  2. Drop a note to: [email protected]
  3. Call on 07801 709945 

 

Embossed hands shaking