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Changing how wages are paid


Rafa
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Sorry to interrupt an Easter weekend - but I have something I need help with!

 

I started a thread a few weeks back re changes to the way the LEA are paying Funding. (and was royally admonished for it)!!! Well we have a reprieve - for the Summer Term 16 - (staying the same), but from Autumn we shall no longer receice funding within the term but will be spread over a longer period........complicated but basically means I will have to change the way I have always paid wages - within term time plus hol pay end of Summer term.

 

What I need to know - what is the best way to stretch pay + hol pay? I need to keep it tight in the Autumn term as this is when I will not have a budget big enough!

 

Was thinking......

 

total hours worked over 38weeks x hourly pay = annual pay + hol pay - divided by 13 (4 weely payments)

 

Ive read on hear about 'rolled up pay' being unlawful - not ilegal? If holiday pay is shown separately on payslips? Would that mean Payslip Total says - Includes hol pay?

 

Also Bank Holidays - I sadly cannot afford to pay all bank holidays (those out of term time) so trying to work out if, 4 weekly pay, over the year takes in Christmas, Boxing day New Year etc, when we are not at work - do I deduct a day from the 4 weekly pay period where a BH falls and include these in holiday entitlement! Confused?? Yes, me too!!

This change is giving me a major headache - would really appreciate your help. How do you do it?

 

Thanks Rafa -

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Hi Rafa what you are thinking about doing is what I do except I divide by 52 as staff wanted to be paid weekly. I show on payslip how much is the wage and how much is the holiday pay . I also deduct the bank holidays which were included in the 38 weeks from the weeks pay they fall in. I just hope this is ok until someone tells me otherwise!

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We do the same but divide by 12. Thats for 'permanent staff'. Other staff, whose hours may change, are paid for how many hours worked during the month and our treasurer has a formula that calculates their holiday pay as they go along. I will dig out paperwork about how we worked out the holiday pay.

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Okay this is how we do it. We are open for 38 weeks. Monthly payments of salary. Holiday pay = 1 week December, 1 week April and 2 weeks in August. As we are unable to open on Mondays the only bank holiday is Good Friday which we do pay the staff for.

Any amendments to pay are calculated for the next pay day, ie: overtime, sickness , days off etc.

How do your parents pay: Our parents are now asked to pay a half term in advance of our service. This has certainly helped balance the cash flow.

 

Have you looked at the Acas website to help you.fx

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I'm always worried about this one. For full time staff pay annual salary (38 weeks +6 holiday weeks) / 13 as I pay four weekly. Part time staff is calculated on their hourly rate but thinking about it now I think I may be overpaying them!

 

Lsp would like to see your formula please.

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When I queried rolled up pay with ACAS they said it was OK as we did have distinct periods of closure ( eg school holidays) when the staff don't work. Apparently the issue over rolled up pay is when it is used in industries where the staff effectively lose their right to time off.

Edited by eyfs1966
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We do as many above say, weekly hours x 38 + HP divided by 12, the HP is based on worked hours over 38 so any bank hols that fall in a normal working week for that staff member are already accounted for and paid in this sum, we a staff member who works 25 hours per week will have more HP than one who works 15 hours per week as ours is based on hours worked not a set given amount. Any bank hols that do not fall into a normal working week are not paid as they wouldn't be working these anyway. So in effect I think it's 1 or 2 bank holidays this year (queen could have given us one for her birthday lol) not complaining as we get 2 Thursday's off this year due to elections :)

 

We do sept-Aug for calculations so anyone who joins us during a year will have their calculation done based on weeks left in that year then it will alter come September.

 

Rolled up pay is not to be confused with this way, if you state it in contracts how it is calculated and it can be clearly shown that HP is paid in addition to hourly wage then your ok, it becomes a problem when it's all malgamated as say you put £8.00 per hour incl HP but then when the employee adds up all the hours and any overtime etc then divides it all taking away what would have been their HP entitlement this could take them below NMW or NLW which means it's unlawful.

Edited by Foreveryoung
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We do 38 weeks + 5.6 weeks holiday pay for each day worked (so 38 Mondays + 5.6 Mondays for example) x the hourly rate then divide by 12 months from september to August each year.

 

For staff who do bank hours or increase their hours during the year we use the 12.07% of hours worked to give the holiday entitlement on those hours. So 10 hours would give them 1.207 hours of holiday at their hourly rate.

 

Have a look at this link as it's a nice easy explanation!

 

http://www.accountingandgeneral.co.uk/holidaypay.html

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I checked with ACAS about how we calculate ours as I was worried about rolled up holiday pay, and they said what we were doing was fine.

 

Contracted hours per week x 38 weeks to get hours worked per year

Contracted hours per week x 5.6 / 52 x 38 to get holiday hours per year

add the above together and multiply by hourly rate of pay to get annual salary and divide by 12 to get monthly pay

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To work out Holiday entitlement for staff who work 38 weeks: (if usually 28days entitlement for 52 weeks of year)

 

28 x 38 = 1064 / 52 = 20.46 so therefor 21 days entitlement minus any bank holidays that fall into the 38 weeks worked and will then depend on your holiday periods. The list below are the usual public holidays for 2016 - but many of these are during out of term times and will not be included.

 

New Year's Day January 1 Good Friday March 25 Easter Monday March 28 Early May Bank Holiday May 2 Spring Bank Holiday May 30 Summer Bank Holiday August 29 Boxing Day December 26 Christmas Day Holiday December 27

 

http://www.year-planner-calendar.wanadoo.co.uk/2016-public-holidays-bank-holiday-dates.htm

Edited by BroadOaks
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