PIXIE PAYROLL Blog

Taking a sabbatical from work

We posted on our Facebook page recently about sabbatical leave and how employers are increasingly offering it as a way to attract new employees. So we thought we’d take a closer look at the subject for this month’s blog.

What is a sabbatical?

The term originated in an academic setting and was used to describe the time academics took away from teaching for research or travel. But it’s been extended now to mean a period of long-term leave – usually unpaid – from a job for volunteering, travel or study, with the expectation that the employee’s job will be held open for them and that they will return to work, although there is no legal right for the employee to come back to their job.

The term ‘career break’ might also be used but this is usually when an employee resigns from their job although there is a promise to offer re-employment at the end of their break.

Legal status of sabbaticals

There is currently no legal right to take a sabbatical. That means that it’s entirely at the discretion of the employer as to whether a request for a sabbatical might be granted. If the option for a sabbatical is written into an employee’s contract, then it does become legally enforceable.

If an employee is on sabbatical and remains employed, then their rights under their contract are still in place. This includes the fact that they’ll continue to accrue holiday pay and they will be building months and years of continuous service. By contrast, if they’ve taken a career break and so are not employees during the time of their leave, they won’t enjoy any of the benefits of employment.

Granting a request for sabbatical leave

An employer’s first thought when receiving a request for sabbatical leave is the disruption it could cause to the business. The impact it will have will vary so it will be an individual consideration for each employer. Then there’s the financial impact. Sabbatical leave is typically unpaid so it could reduce payroll costs for a while, but this saving could be offset by the additional cost of covering for the absent employee.

But agreeing to a request for sabbatical leave can have benefits too. It can really help with staff retention and recruitment, meaning valued, talented and skilled staff remain in the business rather than leaving to join a competitor. It can also help to bring new skills into the business if the employee has taken the time out to study or train.

From an employee’s point of view, it can boost productivity and make them feel rewarded for hard work and long service.

Writing a sabbatical policy

If an employer is thinking about offering sabbaticals, it would be a good idea to start by writing a sabbatical policy that sets out the criteria for granting a request. These might encompass length of service, seniority or maximum length of the sabbatical. A clear policy will help to make sure any requests are considered fairly and avoid complaints about discrimination.

Offering sabbaticals can have benefits for both employers and employees but there are drawbacks too so it’s something that needs quite a bit of consideration and requests will probably need to be considered on a case by case basis. But it’s definitely a subject that will be coming up more and more in the future.

Dealing with pay rise requests

The cost of living crisis has seen a huge shock to people’s household finances in recent years and there are signs that wage growth has begun to help people manage better as they’re faced with bigger bills. But there will still be some who are struggling and so employers may find themselves having to respond to employees asking for a pay rise and in this month’s blog, we’ve got a few handy tips on how to deal with that.

Be open to the request

It is important to initially be open to the employee’s request for a pay rise – it’s important to remember that it might have come out of the blue for the employer but the employee is likely to have been stewing on it for many weeks and will be anxious. Don’t say ‘no’ immediately but reassure the employee they will be given the time to explain why they think they deserve a pay rise.

Avoid a stressful situation

Those weeks of stewing may have caused the employee to have built up a list of grievances and reasons as to why they don’t feel valued and airing them at this point might not be the most productive thing to do. So maybe plan for the initial meeting to be short – confirm the request will be given consideration and set a future meeting date to discuss it further so both parties have the time to prepare. Ensure the employee is clear about the expectations for the future meeting.

Do some benchmarking

It’s a good idea for employers to undertake regular benchmarking exercises to ensure they are paying their staff at a level comparable to their competitors. But if the employer has received a pay rise request, it’s worth just doing a quick salary comparison so they are armed with up to date information for the meeting.

Undertake a performance review

If the employee is requesting a pay rise, it is likely that they believe they have been performing well – perhaps undertaking additional responsibilities, working longer hours or generating income. But it would be good for the employer to look into this so they can be sure that any extra effort is appropriately rewarded. This is also important should another employee request a pay rise who perhaps hasn’t been working this hard and will allow for that situation to be managed appropriately.

Other options

Budget restrictions might mean that a pay rise isn’t possible but if the employer values the employee and the work they’ve been doing, there might be other ways to reward the employee. Flexible working might be something they are interested in or perhaps some additional holiday time. If business considerations allow it, could the employee be offered a shorter working week for the same salary?

Discussions about pay rises are always tricky and they can’t always have a positive outcome even if it’s what everyone wants. But by taking the request seriously, giving the employee the space to air their issues and explore options offers a great chance of a satisfactory conclusion.

The King’s Speech

Since my last blog post, the election has happened and we have a new government in place. Then last week, parliament returned and it was time for the King’s Speech when plans for new legislation is laid out before MPs.

While no announcements were made about wages apart from a commitment to remove the age bands for the minimum wage or taxation this time – that will have to wait until a budget-style statement later in the year – there was some detail about some new bills around employment rights.

Employment Rights Bill

I have written before about new legislation the last government introduced around employment rights, which you can read here and here but the new Employment Rights Bill will legislate for a number of new initiatives including:

  • Banning certain zero hours contracts to ensure employees have reasonable notice of changes in shifts and that contracts will be based on the number of hours an employee normally work. The government believes this will ensure there is flexibility on both sides of the employee/employer relationship which isn’t there now.
  • Banning ‘fire and rehire’ which is where an employer terminates the employment of an employee only to fill that role with new employees who they pay less.
  • Ensuring all workers have an entitlement to parental leave, sick pay and protection from unfair dismissal from their first day.
  • Allowing more employees to become entitled to Statutory Sick Pay.
  • Making flexible working the default option from the first day of employment for all workers.
  • Banning the dismissal of a woman who has just had a baby for six months after her return to work, except in some specific circumstances.
  • Introducing a Fair Pay Agreement into the adult social care sector.
  • Updating union legislation so it works better in today’s economy and resetting the relationship with trade unions.

Skills England Bill

This bill will aim to bring together employers, unions and both devolved and national governments to build a skilled workforce. The new Skills England body will cover apprenticeships right up to the highly specialised skills needed to grow new industries and will map the gaps in training across the country. It will also encompass the Growth & Skills levy to ensure the right sort of training is eligible for funding under the levy.

Draft Equality (Race and Disability) Bill

This draft bill will legislate so that there is the full right to equal pay for ethnic minorities and disabled people. It will also make it easier for people to bring claims for unequal pay or pay discrimination.

In addition, it will require larger employers to report on ethnicity and disability pay rates with the aim to close pay gaps and create a more equal society.

All of these bills will now begin their process through parliament and it is likely there will be some changes along the way but we’ll be monitoring progress to see how things develop in the coming months.

The P45

In last month’s blog, we took a look at an important piece of documentation related to employment called a P60 – which is an end of tax year summary of the income an employee has received and the tax paid. There is another vital piece of paper an employee might need – a P45. ‘Getting your P45’ has become a catchphrase for losing a job but is actually more often created when moving from one job to another.

What is a P45?

A P45 is the document that an employee receives from their employer when they leave a job. Unlike the P60, it is generated at any time of the tax year and shows the tax position at that point of the year. By law, the employer must give the employee a P45 when they leave.

What is it for?

The P45 is created in order that both the HMRC and the new employer knows how much income the person has received and how much tax and national insurance has been paid up to that point in the year.

It also has information about the tax code the employee is on so that when they are added to the new employer’s payroll scheme, they immediately pay the right amount of tax.

The P45 comes in three parts. The employee gives 2 parts to their new employer and they retain one part for their own records. A digital version is issued to HMRC electronically by the old employer which replaces the old paper version that used to have to be sent by post.

What happens if an employee doesn’t have a P45?

A new employee might not have a P45 for a number of reasons including if it is their first job or if the new job is their second job. It is also possible that their old employer hasn’t provided a P45 which although illegal does sometimes happen.

In this instance, adding the employee to the payroll scheme can be done but does mean a few more steps. The employee will need to complete a new starter checklist to provide information on things like student loan payments made, benefits received and whether they have any other jobs.

With that information, the new employer or their payroll provider like us at Pixie Payroll, will calculate the correct tax code so all should be correct by the first pay day.

We work with our clients’ employees’ P45s all the time so if you have any queries about the document or any other aspect of onboarding a new employee, just get in touch.

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.

Contact Form

Website Crafted by CJ Andrade and Powered by Cornwall IT

Professional Indemnity Insurer:

 Address: Trafalgar Risk Management Ltd, 68 Lombard Street, Greater London, London, EC3V 9LI. Telephone Number: 0333 8000 000. Email Address: info@trafalgarinsuracne.co.uk. Territorial Coverage is for the UK only.

__

Pixie Payroll is the trading name of Pixie Payroll Services Ltd, registered in England & Wales under registration number 13782357

Registered Office: 18 Riviera Close, Mullion, Helston, Cornwall, TR12 7AW