Looking to employ for the first time

[Deleted member 287170]

Hi,

We are looking for advice with regards to employing staff.

We are a small commercial cleaning partnership, setup by my partner and myself just over two years ago. We have ticked over with just enough work to make ends meet but this year seems to be hectic for us. We have just take on a very large nursery contract with four very large sites. The nursery are aware that currently it is just the two of us that carry out the cleans but they want us to grow by taking on staff and doing more units. Eventually we will be cleaning all of their nurseries. As well as this we also have numerous other contracts with offices, estate agents etc and it's getting to a point where we are working 16 - 18 hours a day to keep up. We are at that point where we are questioning do we need staff and can we afford staff?

As we have never employed we are looking for advice on how to go about employing. What we need to do etc? In terms of pay, would this be something our accountant would be able to do for us? We would be looking to employ someone part time at first for 10 to 20 hours a week. As we get more units we would then look at employing more staff and/or increase the hours of the current staff.

Any advice with where to start with employing would be much appreciated as we are hoping to employ fairly soon.

 

[Newchodge]

You need to do a cash flow projection, as you would for any other busimess expense.

First of all, assess what rate of pay you need to offer to attract the right candidates. Will the employee be working alone or will they assist you or your partner? That may affect their level of responsibility and the acceptable wage.

Current minimum wage for those aged 25 is £7.83 per hour. Employees are entiled to 5.6 weeks paid holiday per year and you would need to pay SSP if they earn £116 per week and are off sick. You can't recover SSP.

You are allowed to incur up to £3,000 worth of employer NI before you have to pay it, so there would be no employer NI at the beginning.

Your accountant can do payroll for you, or you could outsource to a specialist payroll provider, which may be cheaper and may offer peripheral assistance, such as employment law advice as well.

Please do not be tempted to take on a self-employed person.

 

[Deleted member 287170]

Hi Cyndy,

Thanks for your response.

No we definitely wouldn't have a self employed person working with us, we want to be able to pass on certain responsibilities to the employee as the company grows. They would start off working alongside us and (eventually) progress to a 'team leader' type role.

If the employee was to only work 18 hrs per week to start with, would they still be entitled to the full 5.6weeks holiday per year?

When I was previously employed my wage slip showed I received £7 per hour plus 50p holiday pay, is this how most companies would pay an employee holiday pay?

 

[Newchodge]

Hi Cyndy,

Thanks for your response.

No we definitely wouldn't have a self employed person working with us, we want to be able to pass on certain responsibilities to the employee as the company grows. They would start off working alongside us and (eventually) progress to a 'team leader' type role.

If the employee was to only work 18 hrs per week to start with, would they still be entitled to the full 5.6weeks holiday per year?

When I was previously employed my wage slip showed I received £7 per hour plus 50p holiday pay, is this how most companies would pay an employee holiday pay?

If the employer were to work 10 minutes a month, they would be entitled to 5.6 weeks holiday pay, pro-rataed, obviously.

It is against the law to pay holiday pay as part of wages. The entitlement is to paid time off, so, no, that is absolutley NOT how companies pay holiday pay. Incidentally, if it were allowed, you should have got 85p per hour holiday pay!

 

[Mr D]

Hi Cyndy,

Thanks for your response.

No we definitely wouldn't have a self employed person working with us, we want to be able to pass on certain responsibilities to the employee as the company grows. They would start off working alongside us and (eventually) progress to a 'team leader' type role.

If the employee was to only work 18 hrs per week to start with, would they still be entitled to the full 5.6weeks holiday per year?

When I was previously employed my wage slip showed I received £7 per hour plus 50p holiday pay, is this how most companies would pay an employee holiday pay?

Holiday pay is paid exactly like normal wage.
So if they work 10 hours a week for £8 an hour then you'll pay them £80 a week. When they take a week's holiday you pay them £80 a week in that situation.

 

[Overthehedge]

If the employer were to work 10 minutes a month, they would be entitled to 5.6 weeks holiday pay, pro-rataed, obviously.

It is against the law to pay holiday pay as part of wages. The entitlement is to paid time off, so, no, that is absolutley NOT how companies pay holiday pay. Incidentally, if it were allowed, you should have got 85p per hour holiday pay!

I’m a big fan of yours Newchodge and take a lot of information from your posts, however on this occasion you are incorrect

I worked for the NHS (probably over 8 years ago now) and was on a zero hour contract and received an hourly supplement on top of my wages to allow for holiday pay considering I didn’t get paid for holidays

 

[Newchodge]

I’m a big fan of yours Newchodge and take a lot of information from your posts, however on this occasion you are incorrect

I worked for the NHS (probably over 8 years ago now) and was on a zero hour contract and received an hourly supplement on top of my wages to allow for holiday pay considering I didn’t get paid for holidays

Then the NHS was breaking the law. It is acceptable to work out how much to pay by applying a percentage (12.07%) to wages, to calculate how much holidya pay is due. What they should have done was calculate, at the end of each period of work (contract) how much holiday you were entitled to, and pay you in lieu of the holiday you had not taken while working.

That is if it was a genuine zero hours contract when you had periods of work and periods without work.

 

[Mr D]

I’m a big fan of yours Newchodge and take a lot of information from your posts, however on this occasion you are incorrect

I worked for the NHS (probably over 8 years ago now) and was on a zero hour contract and received an hourly supplement on top of my wages to allow for holiday pay considering I didn’t get paid for holidays

Were you employee or worker or self employed?

 

[Overthehedge]

Then the NHS was breaking the law. It is acceptable to work out how much to pay by applying a percentage (12.07%) to wages, to calculate how much holidya pay is due. What they should have done was calculate, at the end of each period of work (contract) how much holiday you were entitled to, and pay you in lieu of the holiday you had not taken while working.

That is if it was a genuine zero hours contract when you had periods of work and periods without work.

Ah, I may be mistaken, am so curious that I’ve just dug out one of my old payslips and found it to be WTD Pay, after a little research I’ve found it to be the following

“If you have a bank contract with the trust, or are doing hours on a bank contract alongside your substantive post, you will be entitled to receive WTD payments on top of all hours and enhancements earned.
This payment is made instead of being given annual leave entitlement for the extra/bank work done.”

In theory though this is still an amount given in loss of holiday pay, is it not? And it was a bank contract/same as a zero hour contract, although hours tended to be the same week in week out most of the time unless you irritated the boss (and she was easy to irritate! )

 

[Overthehedge]

Were you employee or worker or self employed?

Employee

 

[Newchodge]

This payment is made instead of being given annual leave entitlement for the extra/bank work done.”

Presumably you got at least 5.6 weeks paid time off, on your main contract? This would be topping up the rate you were paid for that holiday to reflect the rate you were paid for working.

 

[Overthehedge]

Presumably you got at least 5.6 weeks paid time off, on your main contract? This would be topping up the rate you were paid for that holiday to reflect the rate you were paid for working.

I didn’t have a main contract, I was purely bank, from the quote I found above it reads as a leave entitlement for extra work OR bank work, I was bank work

 

[Mr D]

I didn’t have a main contract, I was purely bank, from the quote I found above it reads as a leave enititlement for extra work OR bank work, I was bank work

So did you get holidays?

 

[Overthehedge]

So did you get holidays?

No holidays or no sick pay, only paid for hours worked which is why I got given an extra amount each week to compensate, all the bank staff (and there was a lot at the time) received the same and when questioned to our manager as to what this payment was it was explained that it was to compensate for lack of holidays

But again it was getting on for eight years ago so maybe things have changed

 

[Mr D]

No holidays or no sick pay, only paid for hours worked which is why I got given an extra amount each week to compensate, all the bank staff (and there was a lot at the time) received the same and when questioned to our manager as to what this payment was it was explained that it was to compensate for lack of holidays

But again it was getting on for eight years ago so maybe things have changed

Odd way to do bank work.
I remember my brother and my sister both got holidays when they did it. In the same way I got holidays when I temped.

 

[DocsWizard]

Hello Infinite Clean! Aside from holiday pay, what you also need are basic employment documents. An employee is entitled to a written statement (contract of employment) within 8 weeks. No better value for all the legal docs you need than from us at Docs Wizard. Just a very small cost for pretty much everything..offer letters, contract, employment policies etc. And I agree with the poster above, it can be much cheaper to find a payroll provider than use your accountant. There are hundreds of payroll providers so you won't have to look far. I'm afraid you will also have a legal obligation to set up a pension scheme. In our business we use a very popular provider for this called The People's Pension.

 

[Deleted member 287170]

Hi DocsWizard. Thanks for your input. Yes we would give them a formal contract once we have found someone that we are happy to work with.

I don't believe that we would have to enrol them in a workplace pension unless they earn over £10,000 a year, which given the hours we would require them for at first is not very likely. I'm sure @Newchodge will be able to correct me on that if I am wrong.

 

[Newchodge]

Hi DocsWizard. Thanks for your input. Yes we would give them a formal contract once we have found someone that we are happy to work with.

I don't believe that we would have to enrol them in a workplace pension unless they earn over £10,000 a year, which given the hours we would require them for at first is not very likely. I'm sure @Newchodge will be able to correct me on that if I am wrong.

That's right. There can be a bit of a glitch if they earn varying amounts, so, perhaps, £250 in month 1, then £1,000 in month 2, then £250 again, you have to jump through a couple of hoops. If they are getting a similar amount each week/month and it is less than £10,000 per year, you are Ok for auto enrolment. Under 25 hours/week at minimum wage and you should be fine.

 

[Deleted member 287170]

Thanks Cyndy, I thought I had read somewhere that it had to be over £10,000 per year for that to come into effect.

So pay, pension, SSP and a formal contract of employment are the main things to sort when employing.

 

[Newchodge]

Thanks Cyndy, I thought I had read somewhere that it had to be over £10,000 per year for that to come into effect.

So pay, pension, SSP and a formal contract of employment are the main things to sort when employing.

Broadly. Depending on how much you pay the employee and whether they have other PAYE income in the tax year, you may not have to register as an employer or run a full payroll system, but that comes a bit further down the line.