Hello!

Could I get an advise regarding the following, please? One of our emplyees has increased his working hours from 14.4hours per week(2 days-Thurs, Fri) to 36hours(full time). This change happened on 13/01/2020. Usually all employees are paid on a montly basis(gross annual salary/12) however if an employee leaves or starts then the first/last salary will be based on the actual hours worked in that month.

I did a calculation for this particular employee based on the actual hours worked however I got a total of 136.8hours that seem to much considering he worked only 2 days per week for almost half a month.

Could I calculate it in the following way: 3 weeks worked full time so 36*3=108h. The hours left based on monthly contracted hours for full time employees: 156-108 = 48hours. But as the employee worked only 2 days out of 5, it would be 48hours*2/5 = 19.2h. Therefore total hours to be paid in January would be: 108 + 19.2 = 127.2

I will appreciate any advice, thanks.

## Replies (15)

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Why don't you just pay him for the hours he worked ?

It's what I'd do. It's probably what the employee expects too.

If you think about it, there were only four working days in January where the employee didn't work and one of those was New Year's Day.

How is the hours the employee actually worked too much ? It's what he worked!!

Pay up, you tightwad !!

Thanks for your reply. I'm definitely not looking for a way to pay our employees less, I just want to make sure that everybody is treated fair and in the same way.

When somebody leaves/joins we pay them for the actual hours but in this case I believe the situation is a bit different.

Maybe the best way to work out the pay would be based on your suggestion that there were 4 days that employee didnt't work in January(including Bank Holiday but it wasn't his normal working day anyway). So I could deduct 28.8hours(7.2hours per day times 4) from monthly 156 hours. So the total hours to be paid would be 127.2 that matches my previous calculation.

So you're expecting this to be a regular occurrence ?

You need to discuss this with the employee, not us. But I would suggest to you that the employee will be a bit surprised to find that he is being paid for less hours than he actually worked.

I assume the contract does not cover this eventuality. If the employee has always been paid on the basis of annual salary and as he is neither a leaver nor a joiner, why do you have to consider hours worked? I would have thought that you simply say that for 12/31sts of the month he is paid at the old annual rate/12 and for the 19/31sts he is paid at the new annual rate/12.

Well - minimum pay regulations, perhaps.

What exactly is the objection to paying the employee for the hours he worked ?

None at all. Just saying what I would probably do although I agree that I would need to ensure the minimum pay regulations would need to be considered.

Thank you. However wouldn't it be better to base it on the working days rather than total days per month? So for 8/23 he will be paid the old rate and for 15/23 the new one?

Do it that we if you wish. Just be consistent with all employees and put something in future contracts to cover this point.

I have now discussed this with my manager and she advised me to pay for the actual hours worked on this occasion.

Many thanks to both of you

I suspect that the anomaly here is partially caused by the number of week days in January 2020 - 23 days, including the bank holiday.

The standard month's pay would be annual salary / 12 which would be the equivalent of 260 working days / 12 = 20.67.

Therefore if you pay someone for actual days worked from starting date or up to leaving date, it is possible that they could get more than a month's pay.

Be careful, if rate of pay is at NMW, and you pay 127 hours when he worked 136 then you will be in breach and liable for HMRC to send their henchmen around.

You dont say whether there is a rate change but

whenever there is a change in rate or hours (inc starter or leaver)

Actual hours at rate 1

Actual hours at rate 2

Then in following months you can revert to 1/12th of salary provided that is what is agreed in their contract

I would pay 136.8 hours. January is a long month and a possible 165.6 hours for full time workers. So it's not a bad ratio. The only other option is paying 19/23 days x monthly pay. But this might breach minimum wage rules and will certainly be harder to persuade the employee is a fair thing to do.

Don't forget that salary based on day rate usually means 7.5 hours (+ 30 mins lunch which is not paid) but it does depend on contract. And also you need to pro rata holiday owed - various ways to do this.

to get the hourly rate normally take the annual fte salary/260/7.5

but that does depend on what constitutes a working day - might be 9-6pm 9-5pm and how long for lunch and whether that is unpaid. All should be clear in the contract.