Term Time Only But Paid Over 12 Months - What Rate To Deduct When Off

[Guest]

I wonder if any one can help?

 

We pay our term time staff over 12 months with their holiday entitlement included. We don'y pay sick pay so when someone is off sick we just deduct the number of hours off, calulated at their hourly rate of pay.

 

This has never been a problem, but last month was the first time that a member of staff was off for the whole month, so if we deducted her hourly rate she would actually end up owing us money - I really can't get my head around it.

 

I'm hoping that someone 'gets' what I'm talking about....

 

I son't know how to explain - sorry!

 

It would be helpful to know how anyone else does it. If you are term time and get paid over 12 months, and don't get sick pay, what gets deducted if you are off??

 

Please helP!!!!!

[Mouseketeer]

Hi ours is paid over 11 months, then 12th month (aug) is holiday pay, staff can carry so many pd hours if they've been off and then it gets made up with staff meetings, training or any other overtime, any hours left owing when we finish July are deducted from aug hol pay.

[louby loo]

Yes I know what you mean, to be honest we've had a few problems lately. I am now think perhaps staff should be paid as they work- it can then be down to them personally to have it paid into one account, and then a set amount transferred in another monthly (if you get my drift!)

[HappyMaz]

I did try this once but to be honest it got too complicated for my little brain to cope. I think there is always the danger of this discrepancy happening when one staff member is off sick for an extended period. I like your solution louby loo - much simpler for you and easier for the employee to make their own decisions!

[SueJ]

I wonder if this system falls into the "rolled up holiday pay" category. Rolled up holiday pay is illegal! If you google rolled up holiday pay there are lots of explainations but this one may help:

 

http://www.steenandco.co.uk/rolled-up-holiday-pay-_109/

 

We are a term time only setting and my staff team are paid weekly for the hours that they work. They are not paid during the half terms or the Xmas and Easter breaks rather their contracts state that their holiday pay will be paid in the summer holiday. Our holiday year runs from 1st September to 31 August. Their contracts also say that only under exceptional circumstances may time off be considered during term times and then it is unpaid. My staff team prefer to have their holiday pay during the summer as that is the longest break so that is how the employment contracts started life. All new employees have the pay and holiday pay terms explained to them when apply for a job. As far as the practicalities go staff get a pro rata amount of the statutory holiday entitlement which is 5.6 weeks because they do not work a 52 week year. As Looby Lou has posted it is then up to individual staff members to work out what they need to put aside for unpaid weeks.

 

Hope that helps

[Inge]

It is not rolled up as it is still paid for more than the hours worked... if it was added to salary and paid over 38 weeks that is rolled up pay.. paid for longer and it is no longer rolled up as you are paying for time when not worked...

 

if it was not this way all companies would be breaking the law doing rolled up pay as they give the same each month but allow an alloted amount of time not working and still paid... same as adding holiday pay to a salary and then paying over longer than the actual days worked.. I know it gets complicated but did check this one out when the staff wanted to go this way when I was paying them.. so perfectly legal to add holiday pay to wage and spread over the year..

 

but it does give way to this scenario.. we found that the one time it happened ( to me) that the statutory sick pay covered the difference so it meant no wage but not a case of owing us money.. if it had think we would have had to get the remainder owing the following month.. it is one of the issues with being paid this way..

 

I had a lovely spreadsheet which set out how much was due in actual hours worked each week against how much was paid each week, allowing us to see exactly how much each person could have been overpaid to date... it tended to be about 6 months before the amount due and the amount paid began to even out and end up with us owing money.. I got it from here many moons ago and no longer have it, but was one way of keeping track and did help if someone left mid year as there was always the danger of them being overpaid and then leaving for a new post.. what would happen then.. they could leave owing money as we found out when we did the spreadsheet..

 

we had to pay staff in this way as the Local authority could not work out thinks like housing benefit and the working tax credit people had issues with the erratic monthly wages, seems their systems do not account for the flexible hours very well, and had 3 staff members who relied on these to top up the wages they were getting with us..the varied wage often caused benefits to cease or often reduced more than the extra wage so they ended up losing money for working the extra hours..If we had more income to pay them it would not have happened but the EYF as usual kept us all on a low wage for the job we were doing..

Edited April 24, 2012 by Inge

[louby loo]

Well I am far to tired to make any sense of what Inge wrote - AND she always writes common-sense!!!!

 

What I did want to add was though- when I checked of the GovDirect site a week or so ago (as I've said we've had a couple of issues lately) I notice the section that covers this type of pay 'is currently under review'

[Rafa]

i am interested in how you budget for the 12 monthly pay? I have, like SueJ, always paid my staff as they work,term time only,with hol pay being paid in the summer( when i hopefully have enough. funding!!). In the autumn term i am usually very broke as we lose so many to school, therefore i could not afford to pay more than the funded 14/15 wk term. i know i would never win business woman of the year but i cannot fathom how i would finance this kind of pay method when my income to setting is so variable from term to term?

 

Not thinking of changing but wonder if i have been missing something?? Enlighten please..

[Guest]

We haven't paid all staff this way, but for the ones we did it worked out to our benefit in the financially poorer autumn term. Basically this is because we had less income but as we paid an equal amount from Sept to Aug, the amount paid was less than would have been paid if we paid for the hours worked (am I making sense?). So effectively staff worked for less than they should have each month but then got paid in months where they weren't working. It did help to stretch the money in autumn and then in the summer term, when we had higher income levels, the surplus covered the months with no income over summer. It did require very complicated calculations each summer to determine wage levels and hours to be worked and fees, etc. I carried them out but I couldn't explain them to you for the life of me!

[Rafa]

Okey Dokey...Thanks for that Holly35... i think i get your drift and the words 'complicated calculations' have made it all very clear to me.......I shall carry on struggling....ha ha!

[Guest]

Okey Dokey...Thanks for that Holly35... i think i get your drift and the words 'complicated calculations' have made it all very clear to me.......I shall carry on struggling....ha ha!

 

It really was a nightmare the way I did it! At least three calculations per person to make sure I'd got it and then I got someone else to check it too

[lynned55]

I total each staff members sessions over the year, they dont fluctuate, add on any extras such as staff meetings etc then add 5.6 weeks holiday. Times this by however much each member of staff earns per session total gives me an annual wage. This is then divided by 12, which gives us a monthly wage. My staff contracts also state how many sessions they are working/paid for- how much they are earning per annum/session/hour.

 

We started this some years ago as it was becoming so complicated for our Treasurer to work out a half termly wage. Like Inge we also had a member of staff claiming benefits and having no wage for certain months was causing untold problems. Benefit systems really cannot cope with people who work/are paid term time only. Also (if I remember rightly) some of us were starting to fall into paying NI, which when the money was spread out monthly wasn't the case- however I'm not too clear on that bit.

So now every April, I work all this out- which takes hours!! My staff all work different amounts, hours, days- so it's quite a mammoth task and when it was first started it used to be the Treasurers job. However like most other things it now falls on me too do but once done does make life easier. Standing Orders are made for same amount each month, any overtime is paid by cheque. We also (the preschool) know roughly how much outgoings - give or take the odd month for training/sickness- we will have in salaries each month/

I admit I haven't had any staff member leave for over six years and she very conveniently left in the April (end of our financial year) It does mean that if someone left mid year I would have to sit down, work out how many sessions they had worked and who was owed what but that more than compensates the ease of being paid on a regular monthly basis.

I have only once had someone on long term sick ( five weeks) and apart from claiming SSP I cant quite remember what we did.

 

I would hate to go back to being paid every 6/8 weeks again, but I suppose it's just what you get used to isn't it?

Edited April 24, 2012 by lynned55

[lynned55]

Forgot to say. As I understand it. Rolled up holiday pay is not illegal but unlawful.

Not too sure of the difference!!

[Inge]

I total each staff members sessions over the year, they dont fluctuate, add on any extras such as staff meetings etc then add 5.6 weeks holiday. Times this by however much each member of staff earns per session total gives me an annual wage. This is then divided by 12, which gives us a monthly wage. My staff contracts also state how many sessions they are working/paid for- how much they are earning per annum/session/hour.

 

 

 

similar calculations... but I worked it out by

staff hours per week x 38 ( weeks open) x hourly rate- gives annual wage

weekly hours x 5,6 holiday x hourly rate - gives holiday pay due

and any extras like staff meetings x hourly rate - gives the extras due

 

add them togehter and divide by 12..

 

regular monthly payment then due... and any extras given end of the month as overtime..

[Guest]

similar calculations... but I worked it out by

staff hours per week x 38 ( weeks open) x hourly rate- gives annual wage

weekly hours x 5,6 holiday x hourly rate - gives holiday pay due

and any extras like staff meetings x hourly rate - gives the extras due

 

add them togehter and divide by 12..

 

regular monthly payment then due... and any extras given end of the month as overtime..

 

This is the same way we work out as set out my Pre-school learning alliance (you can download the info sheet on how to work it all out).

 

To begin with it is quite complicated to work out and staff were very confused by it, but it means they all get 12 payments a year including the holiday pay which is stated as 'holiday pay' on the wage slips.

 

With regards to sick leave if a member of staff has been off the whole month then would you just NOT be paying her the basic wage? Is she entilited to SSP?

[Guest]

we get paid twice a term so hard to budget and wish we were 4 weekly paid,,,,,,,,,,,,,

[lipoon]

Can I ask what if someone is paid over the 12 months but is leaving at the end of term do you still pay them for August or just the holiday owed.

[louby loo]

I would work out the hours worked up until now then work out holiday pay.

xx

[Cait]

Surely their pay included August when it was worked out, divided by 12?

[Guest]

For us it would include the August pay as we calculate it from September to August.

[eyfs1966]

ok, am a little confused here regarding holiday pay. . Are you all paying 5.6 weeks of holiday pay? I guess what I mean is 5.6 weeks holiday pay is for someone who works 46.4 weeks of the year, so I thought if you only worked say 38 weeks then you would get 46.4, divided by 38 multiplied by 5.6 at your weekly rate. Am i wrong?

[louby loo]

Sorry brain dead at mo (end of term head!) But if you do a search, you'll find lots of threads many with links on this subject.

 

I would work out hours as our pay goes march to april............... see 'term head'!!! that would be April - March!!

[Cait]

I work out how many hours my staff will work from September to end of July and then add their holiday entitlement to that, just as if they'd worked the extra weeks. Then I divide that by 12 to give me a basic number of hours per month. Any over time they do is added to their 'core' hours monthly, and the same for any hours 'off'. So in our case, yes, they'd be paid for August as they've already worked those 'hours'

[lipoon]

thats what I thought, it just seems strange paying august pay when she is leaving next week, thanks for you help x

[Cait]

Well you could always give her the two months pay in one go, she doesn't have to wait till August

[Inge]

That is what we did when someone left.. gave them all the wages still owing the date they left...

[lipoon]

won't she end up paying loads of tax and NI though?

[Inge]

when I last worked it out the tax and NI was the same ,

 

paid over 2 months or just the 1, tax will always be the same..

 

NI may have changed since I last did it..

[Cait]

If you do two single payments and give her two payslips it shouldn't change anything, and might make it clearer for her to see?

[lipoon]

ok thanks for your help