PIXIE PAYROLL Blog
Employing Young People
Christmas is coming and it can be a busy time for businesses. It’s also the time when young people might be looking for some part-time work so as there are some regulations to follow when employing children and young people, we thought it would be useful to outline them in this month’s blog.
The first thing to remember is that you cannot employ a child under the age of 13 in any circumstances unless it is connected to things like acting or modelling. If that is the case, you’ll need to obtain a performance licence from your local authority.
Once a child has reached 13, you can add them to your workforce but there are still rules around employment. If they are aged 13 or 14, it’s probably safe to assume they can only really work for you during the school holidays when they can work a maximum of 5 hours a day and 2 hours on a Sunday. 15- and 16-year olds can work slightly longer hours but the restrictions around term-time working still apply. A young person is not considered a school-leaver until the last Friday of June in the school year they reach 16. So someone who turns 16 in October isn’t officially a school-leaver until the following June.
There are also restrictions on the kind of work a young person can do for you. For example, they can’t work in a commercial kitchen, collect waste, deliver milk or sell alcohol. They also can’t work in a care home unless they are supervised by a responsible adult. A full list of prohibited occupations for young people can be found on the Cornwall Council website here.
If you plan on employing a young person under 16, you’ll need to obtain a work permit from the council which the parent or guardian and the child’s school headteacher must sign before you register with the council.
The UK minimum wage rates only apply for those who are over school leaving age so how much you pay your young employees will be up to you. We always recommend including the child’s parents in any discussion on pay so everyone agrees. Once you’ve done that, just let us know and we’ll add them to the regular payroll and they’ll be paid in the same way as everyone else.
You also don’t have to worry about pension auto-enrolment as anyone under 22 isn’t auto-enrolled although they can request to be included in your scheme.
Once a young person is officially a school leaver then slightly different rules apply. There are no restrictions on the hours they can work even if they are still studying but it would still be worth considering their school or college commitments before allocating work to them.
They can, of course, at this stage be embarking on their chosen career so may come to you as an apprentice. Minimum wage rules apply to apprentices under 19 but it is also complicated by how long they have been an apprentice, so if you are unsure as to which would be the correct rate, just ask us for help.
Things have come a long way since children in Ebenezer Scrooge’s London were forced to work all hours. Having a job can be a real learning opportunity for a young person today but if you do employ young people, always be sure to adhere to the rules. As always, you can just ask us for help if you need it.
Employment Law Top Tips
One thing I do quite regularly is attend workshops and training courses to make sure my knowledge is always up to date. I recently spent a Saturday at an Employment Law workshop and it was a really helpful refresher for the kinds of things employers need to know when employing people.
We have split it down into the things you need to do by law and things that are good practice in order to help build a happy and efficient workforce.
Legal requirements:
- All your employees should be issued with a contract of employment within the first 8 weeks of their employment. But I would suggest that you do not let your employees start working for you until they have signed their contract. That will ensure that everyone agrees to the terms of the contract before work starts and also means you won’t forget to get the signed document back from them. It’s worth noting that from April 2020, all employees need a contract of employment from day 1. It’s not a legal requirement but a comprehensive job description should go hand in hand with the contract, although remember to allow both you and your employee some flexibility about what their role will cover.
- All employees must be paid at least the National Minimum Wage or National Living Wage, depending on their age. Information on the current rates can be found here
- It is your legal responsibility as an employer to ensure that your employees have the right to work in the UK. This will be especially important after we leave the EU as an individual’s status may no longer be clear. To do this, you need to check their passport (and any visa) and take a black and white copy for their file; make a note of when the passport or visa runs out so you can keep the files up to date. Fines for non-compliance are £20,000 per employee.
- Depending on the nature of your business, you must also have a DBS (Disclosure and Barring Service) check on each employee. You can ask an employee to provide a basic DBS certificate or you can apply for a standard or enhanced check on them if their role requires it. Information on DBS checks and how to apply for them can be found here
- You also now have to auto-enrol your employee into a workplace pension. This could be one organised by the government or one you have organised yourself through a qualified financial advisor. Speak to us if you have any questions about pension auto-enrolment.
- Employers’ Liability Insurance protects your employees if they get injured or become unwell as a direct result of the work they do while in your employment. If you employ anyone, even on a part time or voluntary basis, you’re legally obliged to hold Employers’ Liability Insurance. You must have a policy that covers you for at least £5million and the fines are big too – you can be penalised £2,500 for every day you are not properly insured. You should speak to a reputable company or broker about buying a policy but government information can be found here.
Employer best practice:
- Offer each new employee a proper induction so they are fully up to speed on emergency procedures and usual business information. If appropriate, allocate them a ‘buddy’ for the first few days as they get to know the job and the people.
- Complete a personal details record which should include personal details of the employee, next of kin, any medical conditions and their bank account information for payroll purposes. You can also use this to record their DBS check and, if they drive as part of their role, a copy of their driving licence, which you should request every 3 months. Remember to keep this information secure under GDPR regulations.
- If appropriate, ask employees to sign a 48 Hour Working Time Directive Opt Out. This means you can ask employees to work for more than 48 hours in a week if required.
- You may also need to check an employee’s professional qualifications so ensure you have copies of their certificates and make sure you know when they run out as you may have a legal responsibility to ensure an employee is appropriately qualified for the job they do e.g. food hygiene or forklift driving qualifications.
- Appoint an appropriately trained dedicated first aider and keep their training up to date. Ensure everyone is trained on fire procedures should the worst happen and nominate a fire warden for each working area.
Taking on your first employee or growing your workforce can be daunting but having a robust process in place from the start will help make everything more straightforward. If you have any questions at all about being an employer, just give us a call and we’d be happy to help.
How the UK isn’t so united when it comes to tax rates
Whilst the United Kingdom shares many things, the rate at which its residents are taxed is not one of them. There are different taxation regulations for England, Scotland and now Wales which of course means that any payroll calculations for employees in each of the countries will be different.
One piece of good news is that, even though we are based in England, we are able to run payroll for all schemes in the UK so we can help you whether you are based in England, Scotland or Wales.
So, what is the key difference? It largely comes down to who decides the tax rates and the percentage rates at which employees are taxed plus the thresholds at which an employee might move into a higher tax band.
In England, it is relatively simple. Taxation rates are decided by HM Government and everything between £12,501 and £50,000 is taxed at a flat rate of 20%. Earnings over £50,000 are taxed at 40% with the higher rate of 45% being applied for all earnings over £150,000.
The rates in Wales are currently the same but since April this year, the Welsh Assembly has been granted powers to set taxation rates for Welsh residents. The new regime means the UK Government will set the tax rate for a proportion of the deduction and the Welsh Assembly will set it for the rest. For this tax year for basic rate taxpayers, the UK Government has set the rate at 10% and the Welsh Assembly at 10% giving an overall rate of 20% to keep it in line with England. But the Welsh Assembly has the power to vary their rate meaning Wales residents could pay more – or less – tax in future that their English counterparts.
In Scotland, it is a bit more complicated as the Scottish Government has introduced a number of new tax bands with the aim for lower income workers to pay less tax and higher income workers to pay a bit more. The introduction of a starter rate of 19% and an intermediate rate of 21% either side of the basic 20% rate means those on low incomes will pay less tax whereas those on higher incomes will pay marginally more. In addition, the higher rate applies at an earnings level of £43,431 and is slightly higher at 41%. The top rate for those earning over £150,000 is also a bit higher at 46%.
So it might seem like a complicated system with big variations across the UK but we have invested in all the software required so the calculations can be made automatically and accurately each time. We can even easily handle situations where a single company might have employees working under more than one tax regime. If you need any help in running your payroll in England, Wales or Scotland; or even across more than one home nation, just get in touch.
Managing sickness absence in your business
With the government estimating that sickness absence costs employers up to £9 billion a year, managing the balance between supporting individual employees who are unable to work due to illness with keeping levels of sickness absence as low as possible across the whole business is possibly one of the trickiest things to get right.
Over the years, I’ve been able to help quite a few of my clients with queries about sickness and statutory sick pay so I thought a blog post about it might be useful.
There are two aspects to absence that are important to consider; how employees are paid during their illness and how you can help them whilst they are ill.
The payment aspect of sickness is relatively straightforward from a payroll point of view. Statutory Sick Pay (SSP) is paid at the basic rate of up to £94.25 a week and is paid to employees through the payroll in the normal way, with any tax and national insurance deducted. It is paid for a maximum of 28 weeks and starts after the first 4 working days of illness (known as the waiting period). Employers can choose to top up the SSP to bring their employee’s pay up to their usual amount.
Employees will be asked to provide a fit note after 7 days of sickness (including non-working days i.e. weekends) which would normally be written by their GP or hospital doctor.
But there are other ways an employer can help employees through sickness absence before, during and after it happens. The most important thing is to have a written sickness policy in place which makes it clear to everyone what the process is around being unable to work due to illness and how the employer will help the employees. This might cover things like SSP and top ups, what communication is expected and how the return to work will be managed and should also detail the formal process that will happen if the frequency of sickness absence becomes a problem. This kind of information can also be written into an individual employee’s contract if appropriate.
What happens after an employee has called in sick depends of course on the nature of the illness. For relatively short term illnesses or injury such as the flu or broken bones, then the employer can just keep in touch with the employee until they are ready to return.
But for longer term, more serious illnesses such as a cancer diagnosis or mental ill-health, a different approach will be required. Keeping in touch with your employee and their family is important and will most likely be welcomed but discuss with them first about what they feel is an appropriate level of contact during their absence and try not to go over that.
Don’t pressure them into returning to work before they are ready but as soon as it is appropriate, start talking to them about it. See what adjustments can be made for them such as part time working, shorter hours etc or whether a new role or location would be appropriate.
Sickness absence can be very disruptive to a business, especially a small one but having a clear policy in place and good communications can help to mitigate the problems caused. If you need any specific help around sickness absence in your business, just get in touch and I’ll be able to help.
About Me
My name is Kellie Burslem T/A Pixie Payroll Services, I am a local Payroll Bureau based near Helston, Cornwall. I provide a reliable, professional service at a competitive price.
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