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To be salaried or not


Thumper
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Hello

 

Can anyone help with an issue that's arisen....

 

The staff all wished to have a set salary rather than the hourly rate. The hourly rate had problems as some months they'd get paid for 2 weeks some months 5, so they found it difficult to balance finances.

 

So after trawling through years of pay info for them all the committee arrived at what they and I perseved to be fair and correct.....however the staff think they will not manage to do all the hours suggested and will have to pay the setting back in the summer for there shortfall.

 

How do you all do the pay? I'm getting a headache!

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I have a calendar in excel and I add up on it how many Mondays, Wednesdays or whatever they are going to work over the course of the year. Then I multiply those daily figures against the number of hours they work on those days and end up with a figure showing how many hours ( plus holiday entitlement ) they are working in a year. Then I just divide that by twelve and that gives me an average monthly figure. It sounds more complicated than it is.

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We are a term time setting and staff are paid an hourly rate with a weekly pay pattern. They are not paid during the holidays with the exception of the summer holiday when they get their holiday pay (this arrangement was agreed with all staff as the summer holiday is the longest period without pay).


I have helped a few of them work out personal budgets for this sort of pay pattern to encourage them to put money aside each week for the weeks that they aren't paid but really personal finances are their responsibility.
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We paid

hours per week x hourly rate (weekly pay) x number of weeks open...

(remembering to deduct for the BH in May for those that work on a Monday, which was the only BH not taken in a time we were closed. )

 

then took the weekly pay x number of weeks holiday entitlement

added those together to give and divided by 12... this gave a monthly wage



Each month there could be minor adjustments.. for anyone that did overtime or extra hours they had the hourly rate added to the month they worked it.. same for sickness they had the hourly rate for hours off deducted.

worked well.. but the exception to this is if someone leaves during the year... very often at the start they could owe us money because of the hours worked and money paid being more... this usually balanced out by Christmas and then we would have to calculate if we owed them.. that is when it gets complicated...

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I have helped a few of them work out personal budgets for this sort of pay pattern to encourage them to put money aside each week for the weeks that they aren't paid but really personal finances are their responsibility.

I think this is a very good point.

 

I know that not that many years ago this would not have been so easy, but nowadays it's very easy to set up two account within one [or similar]

 

I have encouraged staff to sort their own methods - so all money gets paid into one account- then staff member can then decide how much get transferred into their 'spending account' each month.

 

We've had a few years where the 'end of year' summary has meant staff own money back, or have even been underpaid with the 12months divided method.

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If you are spreading 38 weeks worked + 5 weeks holiday over 12 monthly payments, this is unlawful but NOT illegal. I wouldn't start doing it if you don't already.

.

 

Wasn't looking at including holiday pay..... This will just be paid in August as normal.

 

Was just thinking normal working sessions x 38 weeks spilt in to equal payments.

 

Is this unlawful?

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We spread 38 weeks worked over 11 months, then August (12th month) is holiday pay, with any hours they may owe setting deducted from holiday pay.

Thanks - that's what we are looking to do. Does it work? Ie does anyone end up owing?

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We used to work this way, but some staff did end up owing money back to Pre-school.( not good).

So all staff and committee agreed to be paid by sessions worked each month.

Holiday pay is paid 1 week in December, 1 week in April and 2 weeks in August.

All staff are happy with this arrangement.:)

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Hi Chellandrews, we've been paid that way for years, occasionally staff may have a few hours to deduct if they've had time off and not been able to make it up through training or overtime, but no one had ever owed any back.

 

Our statements of employment only allow us to carry 10 hours anyway, so if they owe more hours than that it gets deducted from monthly pay before it ever gets to 12th month.

Edited by mouse63
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Thank you for your replies - it sounds like it works ?

We'll give it a go.....although I'm slightly worried that its unlawful as diesel10 suggests :/

 

Can you shead any light as to why it's unlawful Diesel10?

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I was told that rolled up holiday is only unlawful if the staff are effectively being paid for holidays that they don't take, ie say a builder, who works 52 weeks of year. As our holidays are in essence compulsory, ie the provision is shut, then was told not unlawful.

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It is not unlawful to add holiday pay and salary together and split into 12 payments unless you make someone work the whole 52 weeks with no time off... or if on a short contract and this is done with no time off allowed.. eg 6 months of work with pay and holiday money together and no time allowed off... as it makes hourly rate look bigger than it actually is.. so a way to pay less than the minimum wage, but on paper it looks like it is being paid.

 

 

You are still paying them for weeks they are not working, holiday time, and is perfectly legal and lawful.. were it not everyone would be breaking the law.. all companies do this.. give a monthly salary and allow time off still paid... it is no different...

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I think it could be that when you do it this way technically they could be on less than minimum wage when spread over 52 weeks.

 

I believe there is/was a way around it - ie if staff are not forced to use this method and can choose normal pay patterns. However I have noticed this option has now been removed from the GOV.com website.

 

 

We do same as Fredbear re holiday payments.

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A previous chairperson rang PLA's lawcall re the staff being salaried. As I remember it is to do with NI limits. ie spreading the payments takes them below the lower limit and therefore they don't pay but if they were actual paid for the proper weeks wage they would pay NI.

 

Hope this helps. As said if not already doing it, I wouldn't start. I certainly wouldn't wait until August to make any adjustments. I always do the deduction / overtime each month. Time consuming but at least everything is up to date. What happens when someone queries something from say January???

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A previous chairperson rang PLA's lawcall re the staff being salaried. As I remember it is to do with NI limits. ie spreading the payments takes them below the lower limit and therefore they don't pay but if they were actual paid for the proper weeks wage they would pay NI.

 

Hope this helps. As said if not already doing it, I wouldn't start. I certainly wouldn't wait until August to make any adjustments. I always do the deduction / overtime each month. Time consuming but at least everything is up to date. What happens when someone queries something from say January???

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Wasn't it the preschool learning alliance that set out the way to pay pre-school staff who work term time? 38 weeks spread over 12 months? I'm sure I got the information from them.

 

Re holiday pay - You must show holiday pay as separate in the wage slip and not class as a basic salary. Also you must show how you split the holiday pay, i.e 1.3 weeks for Christmas, 1.3 for Easter and 3 weeks for summer holidays.

 

Hope that helps x

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  • 3 weeks later...

Hmmm

 

I am not even sure how ours is worked out lol. No idea. But I do know it's calculated on yearly rather than weekly wage. Our contract states a yearly salary of £7,500 (as pre-school leader that is mine) and this is divided by 12 to give me a monthly wage of £625.

 

If absent then this is deducted from that's months pay.

 

As far as I am aware we are not paid holiday pay and I have been told this is correct as it is a salary - not entirely convinced though

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Hmmm

 

I am not even sure how ours is worked out lol. No idea. But I do know it's calculated on yearly rather than weekly wage. Our contract states a yearly salary of £7,500 (as pre-school leader that is mine) and this is divided by 12 to give me a monthly wage of £625.

 

If absent then this is deducted from that's months pay.

 

As far as I am aware we are not paid holiday pay and I have been told this is correct as it is a salary - not entirely convinced though

Wrong!!!!

 

Everyone is entitled to holiday pay wether salaries or not. The calculations for this are on the ACAS website (as we dont work 52 weeks) even if someone does a day they are entitled to holiday pay!!!!

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Wrong!!!!

 

Everyone is entitled to holiday pay wether salaries or not. The calculations for this are on the ACAS website (as we dont work 52 weeks) even if someone does a day they are entitled to holiday pay!!!!

 

Ohh committee just told me that since we get paid same wage each month then we don't get holiday pay as such as were paid the same each month regardless.

 

We all work 20 hours per week

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are they suggesting that your holiday pay is included in your salary?

 

Yes that is what I was told last year when I queried this. They argued we were the same as teachers and I would only be entitled to it if I left while on maternity pay otherwise I was not

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I would ask committee for a break down of how they work your wages out to confirm what they are on about and go from there. Do it in writing so it is a formal request.

 

I can forward you the workings out of how I work ours out which shows a break down of wages and then how holiday pay is worked out and you can work yours out from there to show them what you should be paid.

 

Hope that helps :-)

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