Accommodation For Agricultural Workers

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Farmers who provide accommodation to their employees need to make sure that the rates they charge their workers do not push wages below National Minimum Wage or Agricultural Minimum Wage.

If accommodation is provided to workers, the offset rate as provided by HMRC is £6.40 per day or £44.80 per week from April 2017.

If an employer charges the employee more than the offset rate, the difference is taken off the employee’s pay which will lower their wage and it could fall below minimum wage.

If the accommodation is free, the offset rate is added to the employee’s pay increasing their wage.

However, charging below the offset rate will have no effect on the pay.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

HMRC Agricultural Compliance Checks

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In the rural sector, employers are being urged to check that they are paying the correct minimum wages rates where both the Agricultural Minimum Wage and the National Living Wage apply.  HMRC has launched a programme of compliance checks to ensure the correct rates are being paid and can ask to see any associated records.   This applies to workers in horticulture, agriculture and could include other areas such as, for example, beaters, housekeepers, temporary staff and casual labour.

The Rules

Wales – Agricultural workers must be paid the higher of the Agricultural Minimum Wage or National Minimum Wage

England – Agricultural workers must be paid at least National Minimum Wage unless they signed a contract before 1 October 2013 which entitles them to Agricultural Minimum Wage.

Agricultural Minimum Wage is dependent upon the employee’s job grade and category. Further information can be found on the HMRC website.

Exemptions

Family members who live at the home of the employer and help out with chores or participate in the running of the family business do not qualify for the minimum wage.

However, if your business is a limited company this is a separate legal entity and cannot be considered to have a family or a family home so the minimum wage rules still apply to all employees.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

VAT Payable On Full Cost Of Temps

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Farms and rural businesses who hire temporary staff through an agency must continue to pay VAT on the wages of those workers, and not just on any commission that is due.

A tribunal has ruled that VAT at the standard rate is due on all amounts charged to a client for the supply of temporary workers’ services, which could include salary, national insurance and pension contributions.

It follows an unsuccessful challenge by global HR staff provider Adecco, who tried to argue that VAT should only be charged on the part of the payment that related to its commission for introducing the worker to the business using them.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Rasmus Thomsen at FreeDigitalPhotos.net

Agricultural Workers Sick Pay

www.greenandco.comAre you aware that agricultural workers have different sick pay rules to other workers?

If you have an agricultural worker who has been continuously employed with you for a minimum of 52 weeks, they will be entitled to Agricultural Workers Sick Pay (AWSP) if they have been absent for one of the following reasons:

  • Sickness (including any illness or incapacity caused by pregnancy or maternity).
  • An injury which happened at work or travelling to or from work.
  • Time spent recovering from an operation caused by an illness or injury suffered at work or travelling to or from work.

If you have an employee who has been absent due to an injury suffered at home, they will not qualify for AWSP, however they may be entitled to Statutory Sick Pay (SSP). It’s important to note that employee cannot claim SSP on top of AWSP.

As with normal SSP your employee needs to inform you as soon as possible as they will not qualify for payment for the first 3 days of sickness, unless they’re away for longer than 14 working days in total.

The total entitlement will vary depending on the grade of the worker and how long they have been in your employment. For example, a worker employed for 38 months, working 4 days a week will be entitled to 76 days AWSP per year.

To find out more, contact our Payroll Department who will be able to advise you.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Agricultural Workers – Get It Right

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Agricultural workers in Wales are normally entitled to:

  • Minimum rates of pay (which may be higher than the National Minimum Wage)
  • Paid holiday
  • Agricultural sick pay (paid at least the Agricultural Minimum Wage when off work sick. This includes any statutory sick pay they may be entitled to)
  • Pay even if bad weather stops work
  • Night work pay
  • On-call allowance
  • 30-minute rest breaks, if they are 18 or over and work more than 5.5 hours a day

The Agricultural Minimum Wage depends on the worker’s job grade and category as shown below.

Full-time workers

A worker must be paid the weekly rate, if their contract says they should work 39 hours a week (not including overtime). Otherwise, they must be paid the hourly rate.

Grade of worker

Weekly pay

Hourly pay

Hourly overtime

Grade 1 (compulsory school age)

n/a

£3.11

£4.67

Grade 1 (above compulsory school age)

£242.19

£6.21

£9.32

Grade 2

£271.44

£6.96

£10.44

Grade 3

£298.74

£7.66

£11.49

Grade 4

£320.19

£8.21

£12.32

Grade 5

£339.30

£8.70

£13.05

Grade 6

£366.60

£9.40

£14.10

Full-time and part-time flexible workers

Flexible workers must be paid at least the weekly rate if they are full-time, or at least the hourly rate if they are part-time.

Grade of worker

Days per week

Hourly pay

Weekly pay

Hourly overtime

Grade 1

4 to 5

6

£6.52

£6.64

£254.28

£258.96

£9.32

£9.32

Grade 2

4 to 5

6

£7.31

£7.45

£285.09

£290.55

£10.44

£10.44

Grade 3

4 to 5

6

£8.04

£8.20

£313.56

£319.80

£11.49

£11.49

Grade 4

4 to 5

6

£8.62

£8.78

£336.18

£342.42

£12.32

£12.32

Grade 5

4 to 5

6

£9.14

£9.31

£356.46

£363.09

£13.05

£13.05

Grade 6

4 to 5

6

£9.87

£10.06

£384.93

£392.34

£14.10

£14.10

 Apprentices

For years 3 and above, apprentices must receive at least the rate for Grade 2 workers.

Year

Age

Weekly pay

Hourly pay

Hourly overtime

1

Any

£139.23

£3.57

£5.36

2

16 to 17

£145.08

£3.72

£5.52

2

18 to 20

£196.17

£5.03

£7.47

2

21 +

£246.09

£6.31

£9.29

If you require any more information on agricultural workers’ rights, please see the following link: https://www.gov.uk/agricultural-workers-rights/overview

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Are you aware of changes to the Agricultural Wages Order?

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The Agricultural Wages Board has been in existence since the First World War in order to end rural poverty and provide protection for workers.

However, the terms and conditions for agricultural workers, as defined by the Agricultural Wages Board (AWB), will come to an end this October, which will give farmers much more flexibility when it comes to new contracts.

The AWB had set the minimum wage and other terms and conditions, including holidays and sick pay, for agricultural workers in England and Wales. The last agricultural wages order made in October 2012 set the framework for wages and remained in place until 1 October 2013.

New recruits

Recruits employed after 1 October 2013 no longer have to be offered terms which reflect the 2012 order. They can be offered far more flexible, and, in many respects, less generous terms and conditions provided minimum statutory employment terms are complied with.

The main changes are:

  • Reduced hourly rates. Employers will have to comply with the National Minimum Wage rates, but these are lower than the minimum wages prescribed by the 2012 order.
  • No overtime rates. There is no obligation on employers to pay overtime at a higher rate, which constitutes a major change. Employers will only need to pay the national minimum wage, which is lower than the overtime rates presented by the 2012 order.
  • Less holiday. Under statute full-time workers are entitled to 28 days annual holiday (including bank holidays). Again, this is lower than the 2012 order which allows full-time workers 31 days annual holiday (including bank holidays).
  • Lower sick pay. Employers will be able to pay significantly less sick pay to employees. Employees are only entitled to statutory sick pay of £86.70/week (provided they earn at least £109/week) for up to a maximum of 28 weeks. This contrasts with the 2012 order which gives employees with one year’s service up to 13 weeks sick pay at their basic rate, increasing to 26 weeks if they have service of more than 59 months.

Existing workers

Existing workers will continue to have the contractual rights reflected in the 2012 order, with regards to pay, overtime rates, holiday, and sick pay, until their contract is changed by mutual agreement or finishes.

Employers wanting to change existing employees’ terms and conditions will have to tread carefully to avoid breach of contract and constructive unfair dismissal claims, if they seek to impose changes to contractual terms.

It is important to note that there are no changes to terms and conditions for workers in Wales after 1 October 2013.

If you would like any further advice regarding this subject, please contact Green & Co on 01633 871122.