HR outsourcing Archives

10th March 2021

Engaging contractors and IR35

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.

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

4th November 202010th November 2020

The Job Retention Scheme Extension

4th November 2020

10 Things to Know About the Job Retention Scheme Extension

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:

16th July 201929th February 2020

Too Hot to Work in the Office?

Unlike in 2018, when the sun came out the beginning of May and stayed out for three glorious months, the summer of 2019 has been a bit of a slow starter. It took until well into June to get any weather that might have created a situation of it being too hot to work in the office.

At this point it’s worth noting though that the Met Office’s meteorological definition of summer isn’t the traditional one. If we’re going to be proper about it, summer begins (in the northern hemisphere) on the summer solstice. Depending on the shift of the calendar the northern hemisphere’s summer solstice takes place between the 20th and 22nd June. So as grotty as early June was, summer began pretty much bang on time.

There’s a heatwave – what do you need to know

Anyway – to the point. There’s a heatwave going on, and your offices don’t have air conditioning and what you want to know is:

Can your staff leave work if it’s too hot?
Is there a maximum workplace temperature?

The gospel according to the Gov.UK website states that: ‘During working hours the temperature in all indoor workplaces must be reasonable.’ But there’s no law decreeing maximum or minimum working temperatures. The best there is, is guidance on the minimum temperature when employees are engaged in physical labour.

All the above said, the TUC have stated a belief that employers should set a maximum temperature of 30c, with a top note of 27c for those doing strenuous work.

Despite the absence of a legal high temperature, it goes without saying that, as an employer, you must abide by health and safety at work a law and do all you can to provide your staff with:

A temperature maintained at a comfortable and reasonable level.**
Clean, fresh air

**Reasonable being defined by the HSE as: dependent on the type of work being done (manual, office, etc) and the type of workplace (kitchen, air-conditioned office, etc).

In addition to the Workplace Regulations, the 1999 Management of Health and Safey at Work Regulations call on you the employer, to make appropriate assessments of their employee’s health and safety risks. Then take necessary and practicable actions.

And of course, the workplace temperature is a potential hazard.

Six Steps to a Safe Hot Weather Workplace

The Health and Safety Executive spells out six factorsthat you the employer must consider in assessing if your workplace is safe. They are:

Air temperature
Radiant temperature
Air velocity
Humidity
What clothing your staff wear
The average age at which they work.

To help you, they have a thermal comfort checklist. They recommend that you get your employees to fill it out so you can determine if they’re experiencing thermal discomfort.

The right air conditioning

A word about air conditioning. Should you work in offices with air conditioning, and should you be in a position to influence its settings. And should you have female staff members, you might want to take note of this article in The Metro from a couple of years back.

Everyday sexism is alive and well in the temperature at which most air conditioning is set. A study carried out by two Dutch scientists at Maastricht University, found that the thermostats in most offices are based on the resting metabolic rate of a 40-year-old-man. This as per standard air con guidelines that date back to the 1960s. All of which fails to consider that women tend to be smaller and to naturally have more body fat. It’s to do with biology. Ergo they have slower metabolic rates. So, while your male employees are nice and comfortable thank you, your female staff members could well be turning blue.

So, if you are in a position to influence it – do it.

If you’re at all unsure of your obligations in keeping your staff as comfortable as possible in hot weather, or you’d like help with any of it then speak to Go-Legal and we’ll advise. No sweat!!

28th December 201829th February 2020

The Benefits of Outsourcing HR Functions

Expanding your business and taking on staff brings many things – HR responsibilities included. One of which is the mental health of your staff. Add more staff to the payroll and you’re entering the realms of diversity issues, office relationships, banter and employment tribunals. A lot of potential HR headaches there! This post examines the benefits of outsourcing HR Functions.

That’s a lot of HR issues for one small business to handle. As if all that weren’t enough, an article from Forbes about the benefits of HR outsourcing points out, ‘With today’s emphasis on company culture and loyalty, the role of human resources management and the types of benefits a company offers has become increasingly important for a business’s future.’

But how can you be competitive in these areas if you’re a small or medium-sized business? That’s one heck of an ask.

As a small company you won’t have the budget to have the requisite personnel on your own payroll. And, even if you do, HR issues are often a minefield. And minefields, as we all know, are things fraught with danger. They need experts to traverse them without causing an epic explosion. And anyway, having your own in-house HR department might not be the best use of company funds. Wouldn’t you be better off investing the cost of a HR department on your businesses core activities? An investment that will, over time, fuel your business success.

As for the HR – Outsourcing is Your Saviour

According to the CIPD, the main HR function that businesses outsource is payroll. Hot on payroll’s heels is the provision of complex advice, including case management.

The CIPD cites increased efficiency and access to expertise amongst the benefits of outsourcing. To return to Forbes: ‘some mistakes in HR management will not only hurt employee loyalty, but can lead to fines.’ It’s not sound business sense to trust HR responsibilities to an employee who either:

Deals with these issues on a part-time basis only
And/or has not had enough training in HR matters

Any mistakes made could turn out to be expensive indeed, and in more ways than one. It’s better by far to bolster areas of weakness with an outsourced HR solution that is both cost-effective and expertise-effective.

Note that the CIPD voices a note of caution about HR outsourcing. They suggest that ‘it can also present challenges, such as loss of local knowledge and processes and fragmentation of the service provided.’ That’s a fair point. But one that you can address by finding, where it’s possible, your HR outsourcing support in your locality.

Should you be a Swindon or Wiltshire business in need of experienced HR outsourcing support then look no further than Go-Legal HR. That said, Go-Legal HR supports clients across the country.

About Go-Legal HR

Go Legal HR offer a comprehensive service focusing on all aspects of the legal compliance that goes hand-in-hand with employing people.

Bringing his thirty-two years of experience to the job in hand, Paul works with small to medium sized businesses. These are businesses that employ staff but neither have nor need a full-time, in-house HR advisor or manager. He also supports internal HR personnel lacking the necessary expertise in employment law.

The Go-Legal expert advice and hands-on help covers four key areas:

Employment contracts, and policies and procedures
Employee relations including dispute resolution and mediation
Employment tribunal preparation and support
Recruitment and selection

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