Employing seasonal staff
At this time of the year, many businesses rely on seasonal staff to help them meet the demands of the festive season. What should you be thinking of to stay the right side of employment tax law and make sure you don’t pay more tax than you need to?
For tax purposes, there is no difference between the treatment of permanent and temporary employees. PAYE and National Insurance Contributions rules will apply if their earnings go over the relevant thresholds, no matter what type of employment contract they are on.
Most businesses will be looking at fixed-term contracts (where an end date to the employment is written into the contract). Then the only question is, will the employee will be given a fixed number of hours to work (e.g. 30 hours per week), a minimum number of hours (e.g. a minimum of 20 hours per week but with more hours to be worked if and as required), or no minimum hours at all – (zero hours)?
Bear in mind if the contract is zero hours it cannot be exclusive – the employee must be free to have other concurrent employments.
New temporary staff will require a certain amount of training – some training is required by law (health and safety, for example) and other training is needed so they can carry out the job effectively.
Training always carries a cost, even if it is ‘on the job’ so consider incentivising seasonal staff to return. They’ll require less training and progress from novice to expert much quicker than a new employee.
Just like permanent employees, if they meet the government’s criteria, temporary staff are eligible for your auto enrolment pension scheme and employer’s contributions.
The auto enrolment of new starters can be postponed for up to three months. Eligible workers can be postponed for a further three months, so it is possible to employ staff for up to six months before you and your employee have to make auto enrolment contributions.
You should remember that eligible workers are able to opt-in to your scheme at any time, so the postponement will only save you money if your employee agrees to it.
Recruiting temporary staff
Workers employed through an agency may be paid auto enrolment contributions by the agency.
If your business is yet to go through the auto enrolment process, you could be paying for costs that you don’t have to. Ask for a breakdown of the agencies fees so you can check for unexpected costs.
Like permanent employees, temporary staff are eligible to accrue paid holiday. This will mean you have to give them paid leave during your busy period or compensate them for the holiday.
Temporary workers are also eligible for statutory sick pay if they earn more than the lower earnings limit (currently £112 per week).