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holiday pay question - how to do payroll?

(9 Posts)
bumpybecky Thu 18-Jun-09 13:59:24

I'm the treasurer of a preschool and do the payroll for the staff who work there. Current we pay staff half termly in arrears and pay a small amount of holiday pay (overpaid actually as someone did the sums worng two years ago, but that's another story!) with every pay packet.

From September we've agreed to pay staff at the end of the month for the hours that they have worked. In August we'll then pay all of the holiday pay they've accumulated since the previous September as a lump sum. Obviously if someone leaves they'll get their holiday pay paid up when they finish, rather than waiting until August.

The reasons for this are that the staff wanted monthly wages rather than half termly and they'd like something between the end of the summer term (mid july) and the first wages of the next academic year.

Is there any employment law issue with paying all the holiday pay in a lump sum like this? the staff are happy with the arrangement, so I don't see them complaining, but we don't want to get into trouble so thought we'd better check the legal stuff!

thanks in advance

mrspnut Thu 18-Jun-09 14:02:07

That's the way we do it - so that they get paid at the end of august. We're also a smallish pre school (6 staff)

However I'm attempting to work out salaries based on term time only hours and varying part time basis so that we can pay a flat rate each month incorporating their holiday pay, bank holiday pay and normal hours.

bumpybecky Thu 18-Jun-09 14:08:47

well thats' what out staff wanted really, a flat rate per month. It sounds reasonable but we've got/had issues with staff switching sessions, missing sessions etc. This means we can't rely on them working when they agree they will at the beginning of the year / term. How do you cover absence if it's on a flat rate system?

Also for someone reason someone way back in the mists of time decided that staff should be paid the holiday pay element for sessions they miss (ok) but also that that holiday pay element needed to be paid to whoever gave cover. So if someone was an incredibly unreliable staff member they'd end up costing us loads as we'd pay double holiday on every missed session <mind boggled smilie!>

I think it's much better to wait until the end of the year then add up all the hours worked and work out holiday pay. I'm just not completely sure it's legal!

mrspnut Thu 18-Jun-09 16:43:36

We're in the much better position that we're completely rewriting our contracts and policies (because they are so ancient and useless) and I shall ensure that it's all done on either a salary basis with an extra claim for overtime. Holiday pay isn't accrued on overtime and if they miss shifts then they have to make up the time or have their pay adjusted at the end of the month to account for unpaid leave.

We're lucky that our newest member of staff has been there for 5 years so they are all pretty good at covering and not taking holiday in term time.

I'd go back and review your policies and contracts with the end of the school year in mind to see if you can get rid of the stupid clause. As long as you are paying the equivalent of 28 days holiday a year then there is nothing legally they can do about it. I'd also ask your birth to 5 advisor, ours is good at telling us what other preschools in the area are doing.

juneybean Fri 19-Jun-09 23:51:48

So are you open all year round?

AFAIK you can't pay holiday pay if they're not actually off, something to do with working time directive.

mrspnut Sun 21-Jun-09 18:07:23

No, we are term time only, but we will have term time only contracts which are payable over 12 months. This includes the portion of holiday pay that they are entitled to over the year as well.

It'll be 39 weeks work and 6 weeks holiday pay pro rata for their hours but paid over 12 months.

Apparently it's a fairly common TA contract and also civil service use it (afaik)

laurasmiles Tue 30-Jun-09 23:25:42

HI there, I'm interested to know if you know of any preschool where staff are paid for 52 weeks of the year but only work term-time. Or do you all just pay minimum holiday entitlement?
There seems to be some anomally at a setting I'm dealing with. Thanks.

LovelyRitaMeterMaid Tue 30-Jun-09 23:28:34

I think at the pre-school DD goes to the staff are paid monthly, but it is only open (and hence they work) term time. Rather like teachers in any school I think.

laurasmiles Tue 30-Jun-09 23:41:18

Thanks - would you know if there salary was just apportioned across 12 months or whether they were actually paid as if working full-time every week of the year?

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