Husbands work charging him for holidays?

[Legseleven1990]

Just wondering if anyone can help me out on this.

DH started new job, every week they take just over £30 out of his wages for his "holiday fund" so that when he if off he gets paid? Is this right? He's not self employed, they are his employer, surely they should be covering his holidays? Anytime he's asked about it, they've said everywhere does this but neither of us have ever worked anywhere that does this. He has told them several times that he doesn't want them to take this money out, and if needs be he just won't take any time off (he lost his job during lockdown, nonincome for several months and now is in a much much lower paid job while playing catch up for lost months so this money is a big deal for us). Twice he has asked for it back, and they pay it back the next week but then take it out of this weeks wages so it cancels out again. Some weeks its much higher than others depending on what he has worked and what has been repaid previous weeks. For instance he was paid back 3 weeks worth of holiday fund, but then the next week was charged 4 weeks holiday fund to "keep the fund topped up"

Can anyone shed any light on this?

The most its been was 130 out, but mostly its 30. Having said that, we use 30 of diesel a week to get him to and from work, and with coronavurus we are living paycheck to paycheck so we can't wait a week or 2 to get it back only to have it taken off us again. Essentially we won't get it all back until he stops working for them?

Is this an agency or a proper employer?

I have never heard of this. I’d suggest you contact ACAS

His tax code is also wrong, but that's an issue we're taking up with hmrc. They've added in the repayment of holiday fund with his gross pay every week too, and then taken holiday fun money out for the current week afterwards so it looks like his gross pay is higher than what it is which has been giving us problems with universal credit as well. Is there anyway of stopping them doing this, and just paying his proper wages every week without this holiday fund? They said we should be looking at it as if its a nest egg when we get it back, which is all well and good if you can afford to spare £30 a week which we certainly can't

He is working for an agency but in a permanent ongoing position, does that make a difference? I also work for an agency but have never had anything like this

Never heard of anything like this at all. Sounds complete nonsense. Your husband should have had a contract stating how many holiday days he was entitled to per annum? Then he books those days and get paid for them by his employer. Presuming this is a recent hire and the contract is easy to get your hands on to check out the T&C's?

i have known this if it is a job via an agency, they put your holiday pay into a pot and pay it out when you take it
It should not happen if directly employed

When I worked for a nursing agency they took holiday pay.

Is he on a contract and using an umbrella company for payment? If he is, they do this. You can elect to not receive holiday pay and they pay the full whack without holiday deductions, but if he wants to take time off it’ll be unpaid.

the role was prob advertised at £x per hour incl hol pay. Because you are entitled to 28 days per year - this works out at approx 12 percent of annual pay so this is the amount that is usually deducted . I think

Presumably it's 'holiday' pay as his job is not year round. Companies are required to pay extra (12.5% I think) on top of minimum wage, to cover the holiday that they would not be able to give the employee.

The employee can decide when they would like to take their 'holiday' pay, when they are not being given hours. It's normal for agency or seasonal employment. It's meant to help people have a year round income and so budget easier.

He should be able to insist his holiday pay is paid at the same as his normal pay. I used to refuse to have mine paid separately as ,y jobs had different seasons, so I was never out of work.

He's contracting. So yes this is norm if he is to have paid annual leave. They're hands are sort of tied if the contract includes holiday pay.

Its complicated because he didn't respond to a job advertisement. Someone in the agency contacted him because they heard he was looking for work from another employer he had applied for. There was only a brief telephone interview, no formal interview and no contract (they keep saying they'll post it out but nothing has arrived - they say its all due to covid). He was desperate for work so had to take it but anything he has questioned since has been given the brush off.

He gets paid £9 an hour but if that is to include holiday pay, based on this weeks wages that puts him under earning minimum wage? Is that allowed?

ACAS won't discuss with me as we live in Northern Ireland and I haven't been able to get through to citizens advice

We don't mind him not paying into the holiday fund and then not being entitled to holidays (he's only been there 6 weeks so we weren't expecting him to have accrued any anyway) and after losing his job during lovkdown there is nothing he would need to use leave for. This job is literally just a stop gap to tie us over but I want this pay situation sorted out ASAP because its getting more and more difficult to keep track off with all off the "advances of holiday fund" "holiday fund repayments" and "holiday fund deductions"

He has asked just to be paid his flat 9 an hour rate, knowing that if he takes time off he won't be paid but they still won't even do that for some reason

The job isn't seasonal, and there is 8 years worth of work if he stays

Thank you all for your help so far, its certainly been helpful. I wasn't really sure what to Google for before and know I now what questions to ask when I get through to citizens advice:

Can they take holiday fund from your wages if it puts you under minimum wage?

Can they force you to pay into holiday fund if you don't want to, as long as you acknowledge any time off you take will be unpaid?

Holiday funds are pretty old school nowadays but some employers and agencies still use them to track holiday accrued/taken against budget. They're slightly complicated to explain as there's different ways to set them up (eg. different tax treatment depending on if the scheme is HMRC approved or not).

The short explanation is that it's not actually a deduction from his pay. If you read the payslip, he's been paid 40 hours @ £9 totalling £360, his tax and NI have been calculated based on earnings of £360, and deducting the tax and NI shown in the deductions column from £360 gives him a net pay of £302.10 which is exactly what he's received, so the holiday fund has had no impact on his actual pay for the week.

The holiday fund is essentially a payment that the employer is making, but they're paying it into his holiday pot rather than actually giving it to him - that's why it's not included in the tax and NI calculations on the payslip. Whenever he wants to take holiday, they'll pay him out of the pot and he'll pay tax and NI on the money at that point.

So in terms of his actual weekly pay, it's not costing him any money for them to do it this way and he's got a pot of holiday pay sitting waiting for when he wants to take it.

One thing I can't fully explain without understanding exactly how his employer has got their fund set up is the UC aspect. Based on the payslip, I'd expect the £360 taxable gross to be used as the income figure for UC, rather than the total gross of £393.12 - is it definitely the £393.12 showing on your UC account? Arguably, he has notionally earned the £393.12 even though he hasn't been given all of it yet, so I can kind of see why HMRC would use that figure, but then I don't understand what happens to his total gross pay in the weeks he actually gets paid holiday pay out of the fund. It would be weird to me for it not to be included in the total gross when it gets paid, especially as it will presumably be included in the taxable and NIable gross at that point, but without seeing how the scheme is set up I can't guess - only his payroll team would be able to explain exactly how it works in terms of tax and NI.

If he has been paid out any holiday at any point (you mention advances and deductions above so seems like he might have?) and if you'd be willing to post another couple of payslips, I could have a go at explaining it better!

If you read his payslip properly it's not actually a deduction?

He gets paid £9 an hour but if that is to include holiday pay, based on this weeks wages that puts him under earning minimum wage? Is that allowed?

No it isn’t allowed to earn under the minimum wage.

I had wondered whether it was some sort of weird version of a “rolled up holiday pay” arrangement which is strictly speaking unlawful but some employers do it, but it should involve setting out basic pay plus the amount of holiday pay (often 12.07%, if it’s the minimum 5.6 weeks’ holiday) . And then if they’re deducting for the “holiday fund” an agreement to deduct pay for that (presumably to then pay him when he takes holiday).

I’d call ACAS for advice and separately also report them to HMRC for non payment of the minimum wage. I think you can do the latter anonymously.

Ah @nerdville explains it well. I hadn’t looked at the payslip as I can’t see it without my specs

He is paying into a holiday fund because he is working through an agency, this is perfectly normal, if he was using an umbrella company it would be the same.

Basically the agency / umbrella company are the “employer” but they do not have the funds to cover his statutory entitlement to paid annual leave, so they take it out of his earnings as he goes. No he cannot opt out of this as the employer is legally bound to pay a minimum amount of annual leave.

Not a HR rep and don’t work it payroll (But I do have temp staff and manage costs) but I think:
He can’t opt out of holidays it if it’s just the legal minimum which is being taken out (But looks like he has flexibility on when he pays for it)... I’m guessing that he’s on an hourly rate; but he will be paid for the days he takes holidays.

Whether the rate they agreed at start of contract includes or excludes the holiday rate depends on what was agreed.

However, the minimum wage government rate includes holiday entitlement. So... he can’t go under £8.72 per hour (Minimum wage) Including holidays... ie if they wanted to deduct it from him; I think they’d need to pay approx £9.77 per hour (£8,72 x 12.07% rate agency’s Rather than £9, otherwise, as you say, it takes him under the minimum wage.

Also... where is the pension? This is now statutory. Do not opt out of it or let the agency not pay it, it’s free money!

Sorry the payslip posted has holiday fund money paid back from the previous week, plus holiday fund money being taken out so they cancel each other out and he has broke even as such.

I can't get hold of the previous payslips but basically on a normal week, he gets earns £360, after deductions takes home £302 but then is deducted holiday fund, normally leaving him with £270ish (payslip above has a previous weeks holiday pay paid back in bringing him back up to 302 but they've advised the won't be paying anymore back).

As for universal credit, last week they have his gross pay as 360 although he took home 270 after holiday fund. This week they have it as 393 even though it should still be 360 gross as the extra 33 is the money they took off him after tax/ni being paid back. Does that make sense?

Thank you all so much for your help, I don't know where to start with it and it's all so confusing to me.

Basically he is bringing home 270 for a weeks work, which is less than minimum wage. The agency are taking the money for a holiday fund and holding it for him despite him asking them not too, and has acknowledged that this means any time off would be unpaid (not that he can take any time off anyway). At time when he's fought for it back, but anytime he gets it back they take double off him the next week as if its a loan from the holiday fund that has to be paid back. The firm he works for through the agency are flat out after lock down so no leave is allowed to be taken until the new year so he has no real need to be paying into the holiday fund as he can't take any holidays and he his desperately looking for another job so hopefully won't still be here in the new year. We're now worried that when he leaves he'll get it in a lump sum that will be put through the system the same way as the "advances" have been and it will badly affect UC. I'm currently on maternity leave with a 2month old but will have to go back early because of all this, and have requested to my work to come back sooner so hopefully will not have to wait too long. Lockdown has hit us hard, and I know its only 30 a week but thats big money to us right now, especially when you factor in the dips our universal credit has seen on the payback weeks (we are pursuing this with universal credit, they have the higher amounts listed on our statements and they still aren't seeing people in person so I'm finding it very difficult to explain over the phone or online)

Good point on the pension, he definitely hasn't opted out so I don't know whats happening there

Based on your last post, I just want to withdraw pretty much everything in my last post as it was based on that payslip line being a holiday fund contribution, not a payment, so everyone please ignore everything I said!

So if they're taking the holiday fund deduction out of his net pay, and paying it back to him as a net payment, then I can't understand why it's forming part of his total gross pay when it's repaid to him and being reported to UC as income, as it's already been part of his gross pay as earnings so this feels like double counting. His payroll team should be able to explain.

I appreciate you can't share further payslips but without seeing the whole picture and the exact figures I'm hesitant to comment further as I'd just be guessing really and might go down a wrong path again which doesn't help anyone.

The NMW thing is a red herring as an agreed deduction from net pay doesn't count towards the calcs, so for NMW purposes his hourly rate is £9. On the 'agreed deduction' point - if he hasn't signed anything consenting to the deduction then there might be an argument that it's an unlawful deduction from pay, but again without understanding the whole setup of the scheme I wouldn't want to say that for sure, so I think you need to ask his employer what gives them the authority to take these deductions. If it's a contract clause or something that he hasn't consented to then he might be able to argue they're deducting unlawfully as they're taking money from his net pay without his consent.

If you think he’s getting paid below NMW I’d just contact HMRC and let them get on with it.

@nerdsville thank you very much, you've really help and I know where I need to go now. He hasn't signed a contract at all and the agency are being deliberately evasive and he can't get speaking to anyone in payroll. The sooner he gets a new job the better. At least I've got a grounding on where I need to go now, so thank you.