Hi Everyone,
I have a client who's a free-range egg producer. He has quite a few casual employees, most of whom earn below the NI threshold. There are periods between flocks of hens when, by law, the poultry houses have to be cleaned then left empty for a period before new pullets can come in, so at these times there may be no work for some staff.
Most staff are happy to work on a casual basis and the client is happy with this too, as he does not have to deal with PAYE, sick pay, holiday pay, etc.
However, there is one employee who is earning around £200 p.w. She has not had tax or NI deducted to date (since last May) and has been treated as self-employed It seems clear that the Revenue would not regard her as self-employed, but the problem for the client is that if she is has to 'go on the books' then she immediately has statutory rights to holiday pay etc., which the employee herself agrees should not apply to her due to the intermittent nature of the job.
Is there any way round this for the client ? Is it possible to have a contract of employment related just to the time when there are eggs to be collected & packed ? Or any way for an employment contract to exclude, by mutual agreement, empty shed times, holiday & sick pay ?
The simple alternative is to reduce her hours & earnings to below the NI threshold, but the client is reluctant to do this as she's quite a good worker. Financially she may not be much worse off as she receives Family Credit etc. which would presumably increase as her wages fall.
Any thoughts would be appreciated !
Thanks
Replies (4)
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Fraud??
Surely the problem for the client is that he should have been treating this lady as an employee and hasn't done so? Even worse, he knows that the employee is receiving benefits presumably omitting the wages she receives?You can tailor the contract so that she is entitled to pro-rata holiday pay but the bottom line is that legally she is an employee and therefore entitled to the same rights as an employee.
Same goes for the "casual" employees, this sounds like cash in hand work. Should he be operating BR codes on these people? I understand that this may be difficult in the industry as described but if HMRC investigate he will surely be liable to some hefty penalties.
On a separate note have you considered ML reporting to cover yourself?
You cannot contractually exclude statutory holiday rights
"Your employer is not allowed to give you less than the legal minimum."
http://www.direct.gov.uk/en/Employment/Employees/Timeoffandholidays/DG_10029788
P46s
As long as he has P46's in place for all his employees then he is covered - if not the onus is on him to deduct and pay over the tax.
With regards to the £200 p/wk she will have at the very least NIC deducted from this so I would advise him to set up the PAYE scheme pretty sharpish!
I'm not saying this lady is dishonest but your client has to cover his own backside with the paperwork aspect. What she then tells the Family Tax Credit people is on her.
I am very cautious on this issue, having been caught up in a similar situation (although the employee was deliberately underdeclaring income in that instance).
I digress from the question though - and I think the answer is simple. If she is an employee then she has the rights of an employee whether she wants them or not!
Hope that helped!