The FREE Resource for Payroll & HR Professionals

  Issue #261b -  12 March 2008

Payroll & HR Talk
UK PayPerShop Newsletter {!firstname_fix},

Welcome to the Wednesday edition of the PayPerShop Newsletter in which we feature the latest gossip from this week's press releases and recent postings from the PayPerShop Forum.

In case you missed this week's UK payroll news, click here.

Best wishes,

Bethany Congreave
PayPerShop Editor
bethany@paypershop.com

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Press Releases
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Subject:   Maternity Pay Calculations
Poster: Sean Hannam


Hi, I have been reviewing some previous maternity calculations and have found one where I cannot determine if it is correct.
The Baby Due Week was 14/08/2007
The Relevant Period for payments is 15/02/07 to 13/04/07
We have included payments made on 15/03/07 and 13/04/07
Now the question of how to calculate the average earnings:
Booklet e15 says multiply by 6 and divide by 52 – Which we did at the time
However the Payroll software specification for SMP states we should:

Rounded divisor used when calculating average weekly earnings for employee paid calendar monthly or in multiples of a calendar month. Monthly_Divisor = number of whole calendar months in relevant period. If there are not a whole number of calendar months in the relevant period round to a whole number as follows

= 30 and 31 day months: 15 days or less round down, 16 days or more round up

= 28 and 29 day months: 14 days or less round down, 15 days or more round up.

Applying these rules we get back to a monthly divisor of 1 which we are sure is incorrect but seems correct when compared against the rules.
Does anyone know which way we should actually calculate?
Thanks
Sean

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Subject:   Post Natal Time Off
Poster: Jennym254


Another hypothetical question :-

A woman returns from Maternity Leave on 1st February (at the end of week 22 of her leave, so while still in receipt of SMP). The following Wednesday books a whole day for postnatal checks for herself and the baby.

Do we have an obligation to pay her for this time off - it was after all her choice to return early.

To reply to this post, click HERE


Subject:   Tax periods & pay dates
Poster: markh


It has always been my understanding that a pay day has to fall within the relevant tax period you are actually processing.

I came across a difference to this yesterday, whereby a month 12 payroll and tax period will have a pay date of 10th April 2008.

Is this acceptable?

To reply to this post, click HERE


Subject:   SSp and termination
Poster: PaulaR


Hi all

Wonder if you can help. We have two employees, both on SSP whose contracts have been terminated. One employee has produced a certificate dated 5 March 2008 for three weeks. Contract was terminated on 7 March and I am to pay a month's salary in lieu of notice. My question is, I pay SSP until 7 March, but how do I treat the remainder? Under contract, employee is paid SSP only. Do I pay SSP and offset against month's salary or do I pay SSP on top? I am not sure of the other employee's circumstances as yet.

Thanks in advance for your help.

Kind Regards from a very wet and windy Kings Lynn!

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Subject:   Sickness due to Bereavement???
Poster: Jennym254


I wondered if anyone could give some guidance on the following scenario.

On Monday 25th February, an employee's husband calls in to say that his wife is at the hospital with her mother who is terminally ill. A later call confirms that the mother has died and the employee will be out for the rest of the week.

On Thursday 28th February, the employee turns up for work for one hour during which time we learn that the funeral will take place on 7th March, and goes off again.

On Friday 29th March we receive a Form Med3 stating that the employee should refrain from work from 28 February to 14th March with a diagnosis of bereavement.

The company's unwritten policy is to allow up to five days on full pay for bereavement but are wondering if bereavement can actually be classified as a sickness.

We know we have to pay SSP for the totality of the absence, but can we refuse to pay Occupational Sick Pay for the days in excess of 5 and would we expect the employee to be back in work on the 14th March or Monday 17th March (we don't work weekends).

Any thoughts would be gratefully received.

To reply to this post, click HERE


Subject:   Dividends on Payroll
Poster: yuri


Hi All,

I started a limited company this year and working as a paid Director of it with monthly payroll setup. I ususally pay dividends from company to myself.

My question is; do these Dividend amounts need to be mentioned in payroll and should go in P60. I can see SA100 contains a seperate section for dividends.

But how to tackle this in Payroll and P60 or it can be all togehter omitted from Payroll.

Thanks in advance.
Yuri

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Subject:   Common practices for pay rises and promotions
Poster: DontPanic


Hello I'm new and live in the UK.
I have a question which I'm sure is not covered by the Law, but is probably a question of ethics. I've come here to see if anyone can tell me what practices are common.

Imagine a company who conducts employee performance reviews and salary adjustments every year in April.
I know nobody is legally entitled to a pay rise, but lets say that due to hard work and impressive results Mr Smith enjoys an average annual salary increase of 6%.
Each year he improves his performance and his potential enough to be awarded 6% each time his review comes round every April.

One year Mr Smith gets promoted in December and is given a new salary £3000 above his existing salary. The promotion comes with more responsibilities and Mr Smith continues his new role with even more enthusiasm and success than before. Again when April comes around his results are as impressive as they have always been and he looks forward to his salary review.

There are now a number of outcomes after his review that would affect his salary:

1. Even though his review shows he has improved significantly over the last 12 months his boss explains that he has only been in his new position for 4 months (a third of a year) so can only be given a third of his usual raise. Therefore he is awarded a 2% salary increase.

2. His boss recognises Mr Smith's commitment over the last 12 months by awarding him his usual 6% increase. After all, a salary increase and a promotion are separate things.

3. His boss realises that 6% of Mr Smith's new salary is quite a large increase. So his boss calculates a midpoint based on the two different salaries in the past year. This works out as an annual salary increase of 4.1%

Does anyone know which is the most common practice amongst employers?

If option 1 is common, I can understand it, but I'm struggling to understand how it could be fair. Surely the company should reward Mr Smith separately from the promotion based on 12 months of exemplary performance? If the company had given the promotion at the end of March they could effectively refuse to give (get away without having to give) an annual pay rise.

Again I realise the company is completely within their rights to award salary increases at their discretion depending on their internal policies and procedures. But please take this example as a hypothetical situation.

Thanks
Richard

To reply to this post, click HERE




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