Tag: hr consultant

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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?

 

 

 

 

 
 
 
 

 

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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

 

 

 

 

 

 

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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. 

 

 

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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 
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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