Help please to understand p/t work and Universal Credit?

[NewEmployeeAdvice]

I wonder if anyone could advise me please. I have recently offered a job to a young person, 20 years old, who is currently unemployed and has few formal qualifications. He has had a troubled home life and no longer lives with his parents, although I do not know the specifics. He seems like a great kid and I want to give him a chance. All I know is that he lives in a small flat alone (not sure whether it's privately rented or social housing) and he receives universal credit to pay for this. He is not a care leaver as far as I know.

I want to employ him on a part time basis, possibly a zero hours contract to start with, but maybe part time contracted hours of around 15 or 16 hours a week, with the option to work as many as 25 or 30 hours a week if we need him. It's a brand new business, we haven't opened yet so I just don't know how busy we are going to be. I've asked him to be flexible and willing to do up to full time if necessary, but that I can't guarantee it. He says he's happy with this arrangement, he's just pleased to have the job offer at all.

Ultimately I'd like to put him onto a full time contract but it might be a while before I'll know if that is achievable.

He said he thinks he can work up to 16 hours a week and still get his UC. Can someone explain to me how it works if I need him for more than 16 hours please? I want to make sure he isn't worse off for working more than 16 hours but still only part time. He can't be in a situation where he loses all his UC because he's tipped over the 16 hour a week limit but can no longer manage his rent and bills without it.

If he did a steady 25 hours a week for example, on minimum wage or just over it, would he be better off than working 16 hours and claiming UC? Will he lose all his entitlement to UC? I literally have no idea how this works.

And if his hours vary from week to week, how does he go about calculating what he is entitled to in UC, please? I don't want to make his financial situation unnecessarily complicated.

bump

You can work full time and still get UC depending on circumstances.
I used to get it occasionally depending on my hours, though it was never much.
For a single person - no other entitlements/mortgage/kids/income/over 25(what ever the oldest bracket is bar pension)
Take your wages, multiply by 0.55 then take that figure away from your full entitlement.
The Uc payment will be whatever is left.

Oh and UC calculate it themselves every month, really stupid as people get paid in different time frames and it can make a difference.

Bottom line is he will always be better off working.

His claim won't close until he's had 6 months of £0 award and it can be reopened easily if needed.

It might be easier if you give him a set number of hours as opposed to a zero hours contract as they will be outlawed soon anyway I think labour said.

As a single adult with no children and no heath conditions, UC will deduct 55p of benefit for every £1 in take home wages.
this is calculated each calendar month, so if he is paid weekly/fortnightly/four-weekly it will make a difference. There is no 16-hour rule.
bottom line, the more he earns, the better off he will be.

yes I did consider this. My DH thinks for various reasons zero hours is better to start with, but given the new government's plan I am not so sure.

Great advice thanks people!

It sounds like a poor deal on his part. Minimum wage. On a zero hours contract. But you expect him to step up to full time if you need.
I'd advise any young person to be wary.

It's not a poor deal on his part at all. We are probably going to pay him slightly more than minimum wage, but given that he has no qualifications and very little work experience and it is what is commonly considered to be a minimum wage role, we have no obligation to.

We'd love to offer him a full time role from the beginning but we can't. We haven't started trading yet and the business will be open for a 56 hour working week, so we need two members of staff as well as us, working split shifts on a rota. We have no idea yet what the peaks and flows of customers coming in will look like, so we are asking for flexibility in the early months while we get into our stride.

We've explained this to him and to the other staff member, they both understand and are both fine with it.

Your husband may think zero hours is better for you, but it certainly isn’t for an any employee. Generally it means the employee has to be prepared to take on extra hours whenever needed, so can’t get a second job or often plan social time, as they get called in when things get busy. My DD lives in the hope of extra hours so doesn’t commit to anything else just in case work need her, and then gets cancelled at the last moment if the weather is crap, or gets sent home early if it’s quiet.

It’s a rubbish deal for employees and even more so when this guys UC claim will be all over the place - they’ll put pressure on him to look for a different job or to get more hours etc if he’s not getting enough work, he’ll be put on training schemes and CV enhancement workshops to try and push him to work more, so it may backfire and you’ll lose him anyway.

Just give the guy a proper job, pay him and value him appropriately, train him and give him opportunities for development and you’ll get the best out of him.

If we went in from the beginning with two staff on full time contracts and half the week we didn't need them both, then the business would go bust before it even got off the ground, and we'd end up making one or both of them redundant.

This way, we can build up to a point where we may have two people on 30 hours a week contract, or one full time, one part time, or if everything goes brilliantly we can give them both full time contracts. We just need to test the waters a bit first. We've been very upfront about this and they understand.

Zero hours contracts can work to both the benefit and the detriment of the employee and the employer. It's only easy to stitch your staff up if you have a huge bank of employees to call on if one person doesn't want to jump when you say jump, so you can eventually freeze them out and give their shifts to other people, or just drop them completely with no warning.

We are not going to work like that at all. Both the lads would like full time but understand completely why that may not be possible, at least not in the first six months or so, until we've established a pattern. We will put them onto contracted hours and a fixed shift rota as soon as it's practical to do so.

As a single adult he will need to earn £892 a month or he will be sanctioned by UC. So you need to pay him at least that gross every month. Also don't pay him four weekly or weekly it will mess up his UC.

Glad Labour are getting rid of zero hour contracts you are kidding yourself if you think they work for an employee.

I agree, it very rarely benefits anyone other than the employer.

To be honest OP reading your post made me quite uncomfortable when you break it down.
He is a vulnerable young adult by the sounds of things, you say several times that he and the other person are happy with the arrangement. I'm sure though if given the choice they would not choose to have such instability in their work.
You come across as if you think you are doing him some big favour because he doesn't have formal qualifications and comes from a difficult background so he should just suck it up. I really think you need to offer him a decent number of guaranteed hours not just 15 or 16 or maybe more. You aren't far of exploiting this young man who may have limited choices in life.
Surely as a new business, your business plan takes into account staffing all the hours you are open and you have stress tested your plan thoroughly.

It’s a rubbish deal for employees and even more so when this guys UC claim will be all over the place - they’ll put pressure on him to look for a different job or to get more hours etc if he’s not getting enough work, he’ll be put on training schemes and CV enhancement workshops to try and push him to work more, so it may backfire and you’ll lose him anyway.

This is exactly why I asked the question about his UC situation in the first place, and why I mentioned that zero hours contracts were just a possibility. We are weighing up the pros and cons.

Having asked someone to come in for a shift I would never send them home because we were not busy. We would just take than on the chin. We are not going to be twats about it. But until we know what each day of the week and each shift pattern will look like in terms of staffing requirements we don't want to contract in more hours than we think the business can support. We think it's likely that each employee will end up with 25 to 30 hours a week, and hopefully more if they want it. If I wanted to rip off someone young I'd put them on one of these absolute jokes of an 'apprenticeship' for buttons (in a job that doesn't genuinely require one and has no specific trade or valued qualification at the end of it) and have them there full time from day one. But I'm not, because I think they are cynical and exploitative.

Just give the guy a proper job, pay him and value him appropriately, train him and give him opportunities for development and you’ll get the best out of him.

That's exactly what we plan to do, industry-specific training courses and career development plans already being discussed, but thanks for the tip. Given his work and education record, he is absolutely buzzing that we are giving him a job at all. We want the best for them and the best from them. But we are a start up business and there is a lot at risk if we promise too much, too early. Two of us are going to be working completely unpaid. We don't have to pay them more than minimum wage, they certainly wouldn't get more in other similar roles at their age and experience level. But we are going to do our damnedest to start them on more than minimum wage because we want to make them feel valued. Okay?

There is no 16 hour rule or limit. His UC will reduce by 55p for each pound her earns unless he has the limited capability for work element on his claim. If he works variable hours then he will just get variable amount of Uc each month. If only working part time it's unlikely his UC will end completely as he'll be gettign a rent element also.

It's impossible to stress test it thoroughly because there isn't another identical business model to compare it to, and any new business requires a leap of faith and an element of guesswork with your forecasts in the beginning. We are not stupid people and we've stress tested insofar as it's possible to do so. You just have to hope you haven't misjudged it and need to start laying people off as quickly as you took them on.

What do you mean don't pay him four weekly or weekly? What is the alternative? A calendar month?

As another poster said, there is no 16 hour rule with UC.

He will get the housing element plus a standard allowance as a single adult.

He is allowed to earn a certain amount a month before deductions. Once he goes over that amount, UC will deduct 55p from his payment for every pound he earns.

It's best to pay monthly, it will just mean it's easier for him to work out what UC he might still get , especially if he will be working variable hours. Four weekly especially can cause problems because one UC assessment period per year he could be paid a lot less UC as he would have 2 paydays fall in his monthly UC assessment period.

There is no work allowance for a single person with no kids and without LCW or LCWRA on his claim. Deductions from his UC would start from the first pound he earns.

I think this is really naive.

OP is probably right in her assessment that this young man isn't hugely employable at the moment. He currently lacks the skills, qualifications and experience needed. She is willing to take a chance on him and in return he is going to have to take a chance on her. It's very fair really. He stands to gain a lot by making the most of this opportunity, even if OP's business isn't ultimately successful. He will at least have some work experience and skills to list on his CV which counts a lot. If OP's business flourishes then he could potentially have a FT job that pays above minimum wage with an employer that is genuinely invested in him.

Basically what I'm trying to say is that the man gains to a hell of a lot from grasping this opportunity and it is undoubtedly in his interests for OP to try to make this happen. New businesses are inherently risky and it's unrealistic to expect OP to take on this man for longer than she actually needs him. That is enough to crush a fledgling business and make it unviable

So would I, bloody hell. Yes he's probably fine with anything as someone's giving him a chance.