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Do zero hours workers count towards EMI limit?

Are zero hours workers included in the 250 full time equivalent employees limit?

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Can anyone please assist with the following: 

If a company employs hundreds of workers on zero hours contracts, but only a small number of full time staff, would it still qualify for the EMI scheme due to the 250 full time employee limit? If many of these workers are only with a company for a short period how would they be counted towards the company's fte total? 

If anyone has any experience of such a scenario it would be good to hear. 


Replies (6)

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By Andy Reeves
02nd May 2019 11:22

Unless you have issued the zero-hours employee with a P45, then he/she is still an employee. Part-time or full-time makes no difference.

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Replying to Andy Reeves:
By Wilson Philips
02nd May 2019 16:51

But it does matter. The legislation specifically requires one to count the number of full-time, and/or full-time equivalent, employees.

Whether a zero-hours employee is full- or part-time for this purpose is an interesting question. I don't know the answer, although if pushed I'd say not full-time, unless they do actually work 35 hours per week.

One also needs to make the distinction between part-time workers and temporary workers, who could be either full- or part-time.

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Replying to Wilson Philips:
By DP Walsh
02nd May 2019 18:41

Hi Wilson,

Thanks for your response. I believe that while there is no legal definition of a FTE, HMRC view a part time employee as % of a FTE depending on their hours. So a lot of zero hours staff would also amount to a lot of FTE.
I just wanted to check if anyone has experienced this in reality as HMRC's opinions are not always fully aligned with the law.



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Replying to DP Walsh:
By Wilson Philips
02nd May 2019 19:09

HMRC’s view is that anyone working less than 35 hours a week is part-time. I don’t have a problem with that interpretation.

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By starbanana
07th May 2019 12:23

We all know what FTE is, if I have 4 people doing 17.5hours each then that's 1 FTE (if 35 hours are full time).

In the abscence of contractual hours, then I would expect HMRC would look at the actual hours being worked per week/month over a period of time to assess if 250 FTE limit is exceeded. If the limit isn't breached on that basis, then there shouldn't be a problem.

The same situation would occur in a seasonal business, where over a year there might easily be less than 250 FTE but for part of the year it's way over.

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Replying to starbanana:
By Wilson Philips
07th May 2019 13:00

If you have 4 people doing 17.5 hours each I think that you'll find that is 2 FTE.

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