Over the recent years we have seen HM Revenue & Customs hard at work, ensuring that companies and their employee’s are fully compliant and following the required legislations. This has been supported by the Government introducing increased penalties to those companies and individuals that continue to operate with non-compliant procedures. It is vital for companies such as ePayMe to be fully compliant, in order to provide the best service to our employees and agencies. However, there are still a small number of non-compliant companies that are prepared to take the risk, with the chance of high fines, landing on the Directors desk. National Minimum Wage As an employer, it is vital that all workers are being paid at least National Minimum Wage. With the National Minimum Wage for over 21’s recently rising to £6.50, the cost of employment also increases, with Holiday Pay, Pension Costs, Employer’s NI and of course administration costs to be considered, this £6.50, ends up being considerably higher. Here at ePayMe, we take all of this into consideration and therefore require a basic minimum wage of £8.40 to ensure these costs are covered. Anything lower than this amount is likely to compromise NMW. Breach of NMW If you do not pay your contractors at least the required National Minimum Wage. Outcome of non-compliancy If you don’t pay workers at least NMW then a penalty can be issued, which as of February 2014 has increased to a maximum of £20,000. Additional Information Why would an agency have to pay an increased minimum rate of £8.40ph through Umbrella? It’s easier to demonstrate on rates slightly higher than NMW, such as £7.50ph. For example, if a contractor was paid £7.50ph PAYE, but paid £8.40 through ePayMe on our Umbrella service, the agency would be making a saving of £0.59 per hour. This amount obviously increases the further up the scale you go. Hours – 40 Rate – £7.50 Gross – £300.00 Holiday Pay – £36.21 ER’s NI – £20.29 Pension @ 1% – £3.00 Cost of Employment – £359.50 Average per Hour – £8.99 ———————————————————— Pensions and Auto-Enrolment The government have introduced a Pension Scheme that is available to every employee. Every employer that has more than 1 employee is required to auto-enrol workers into a work placed pension (dependent on circumstances). Breach of Pension and Auto-Enrolment You will be in breach if you do not auto-enrol employees within the staging time, or, if employees are not enrolled correctly, or if you, as an employer are seen to influence the employees decision to opt-out of the pension. Outcome of non-compliancy Penalties of £5,000 can be issued per person effected by the breach. Additional Information At ePayMe we register our employees through NEST – National Employment Saving Trust. Further information regarding this pension scheme can be found via their website www.nestpensions.org.uk ———————————————————— Right to work within the UK It is the responsibility of the employer to ensure that all required checks of employee’s working statuses within the UK are completed before employment begins. It is vital that these checks are made, not only protect the employers but the workers as well. Breach of Right to work within the UK A company employing illegal workers (those individuals that do not have a legal right to be working within the UK). If you are found to be employing a worker that does not hold the relevant right to work documents to support them working within the UK. Outcome of non-compliancy Companies that repeatedly offend, will now be presented with the new increased fines, which can be as high as £20,000 per illegal worker. Additional Information An employer’s guide to right to work can be found on the Government website – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/338399/An_employers_guide-28-07-14.pdf. “Illegal working often results in abusive and exploitative behaviour, the mistreatment of illegal migrant workers, Tax evasion and illegal housing conditions. It can also undercut legitimate businesses and have an adverse impact on the employment of people who are lawfully in the UK … Employers have a duty to prevent illegal working in the UK by carrying out prescribed document checks on people before employing them to ensure they are lawfully allowed to work.” – An employer’s guide to right to work checks (www.gov.uk). ———————————————————— Agency Workers Regulations (AWR) AWR terms stipulate that after the 12 week qualifying period, an agency worker must, amongst other requirements, be paid the same or comparably to that as if they had been directly employed by the end client to do the same job. Breach of Agency Workers Regulations (AWR) When an agency does not pay comparable rates to permanent staff after 12 weeks or do not pay contractors between assignments if they are on a Swedish Derogation Contract. Outcome of non-compliancy Companies can be faced with financial penalties if they are found to be in breach of AWR. Additional Information You can find the complete Agency Workers Regulations (AWR) Guidance by following the link below, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/32121/11-949-agency-workers-regulations-guidance.pdf ———————————————————— It is vital that your company is/working with a fully compliant company, following the required legislations to ensure that you can provide the best quality service to your workers, without the risk of receiving penalties. If you have any questions, then please contact our Compliance Manager, Neil Baigent t: 01252 863 700 e: neil.baigent@epayme.co.uk w: www.epayme.co.uk