enployment agency pay problems ??? 3rd party payment companys .

[barnsley john]

recently iv done a days work for coyles recruitment link removed labouring on a building site for a measly £6 an hour . the job was very hard work and involved carrying 60 3 meter plaster boards up 4 flights of stairs .

 

Now heres my problem . After ringing coyles agency several times to find out why I hadnt been paid . I was told i needed to register with NWM umbrella .link removed a 3rd party payment company . I sent off all my bank details and signed the paper work (iv still got a copy of this)

 

heres all the figures on the wage slip i was sent.

 

nwm umbrella income

 

gross received 8 hours at £6 £48

deductions

nwn proffit margins £19

insurance £3

holiday pay £2.80

 

NET

Income £48

less deductions £24.80

 

GROSS PAYABLE .

£23.20

 

PAYSLIP

 

hours 3.91 @ rate £ 5.93 total £23.20

 

deductions

tax 0.00

NI 0.00

AOE 0.00

Other deductions £6.95

personal accident ins £1.95

total £8.90

 

NET PAY

gross pay £23.20

less deductions £8.90

 

NET PAYABLE

£14.30

 

am i rite in thinking that what they have done is taken £19 for processing my wages ? as theres nothing in any of the paperwork i signed to say that they can .

 

Then taken £3 for insurance i never asked or signed for.

 

then payed me 3.91 hours at minimum wage for an 8 hour shift at £6.

 

then had the cheek to have another 6.95 for other deductions im compleatly unaware of and some more insurance

 

thats a bit long winded and the payslips very confusing .

but after all the deductions iv ended up with 14.30 for a full days hard labour . less the diesel i spent to drive a 30 mile round trip to get there .

Edited November 19, 2010 by IdaInFife
Please dono post links to external companies

[Russe11]

The idea for this setup is to offer people working as self employed status in certain industries, you can then ofset your expenses, such as tools, travel againt your income so you then pay less tax.

 

It only really suits trades, where you work as a contractor at hourly rates, so if your earning £20 per hour, you can take home a higher proportion of you earning than a PAYE employee.

 

The minimum wage is 5.93 a hour, essentially you are earning 7p more a hour and have no rights as an employee. You really should not be paid in this way as you have no liability, no real expenses other than travel. Inland revenue would class you as employed by the agency.

 

I think they have just put you through this system to out source the payroll.

 

All the deductions will be in the contact you agreed for them to process your wages, do you have a copy of this?

 

From there website the charges

 

Up to £8.00 ph only £12 per week worked.

 

£8.00 ph and over only £19 per week worked.

 

Did the agency say you had to be selfemployed status? you should be on a least of 7 50 p/h to be earning the minimum wage.

 

With NWM Umbrella you will receive all the resources and backing of a large organisation. We take great pride in ensuring all our contractors feel looked after and confident they have someone to turn to for support.

#

 

Full compliance with all PAYE and NI requirements

#

 

HMRC approved expenses policy Have you supplied your expenses(40p a mile at 30 miles = £12)

#

 

Personal Account Manager

#

 

No set-up or termination fees

#

 

Free same-day payments

#

 

Free SMS payment notification

#

 

Dedicated and Highly Professional Customer Care Team

#

 

Optional £5m public liability and £1m professional indemnity insurance

#

 

Optional Personal Accident insurance (says these costs where optional) maybe you need supply evidence you have these though

#

 

No fee when not working

#

 

NO HIDDEN FEES

 

 

Basically this payroll method does not suit your needs, I worked for a company that put me through a simular system, the result was I sued the umbrella company twice to get what I was owed under the employment rights act.

 

I would never go through such a system ever again.

[barnsley john]

having spoken to them this afternoon . you are correct in saying they can't pay me unless im on £7.75 an hour . this is why they payed me £8 an hour for 6 hours . instead of the actual hours i worked . Then it costs me £19 for the plesure of getting paid instead of £12

 

Is this legal ? As im speaking with the manager of the agency tommoro to complain about the way i was spoken to by some one that couldnt be bothered to listen , said its not my problem and told me i was stupid for not going paye then hanging up on me .

 

I WOULDNT RECOMEND ANY ONE USING THIS JOB AGENCY .

[Russe11]

Did you get the option of going PAYE?

 

I learnt the lesson the hard way with these umbrella companies.

 

I'd suggest if you want more labouring jobs to get in contact with as many smaller local trades or building companies.

 

That way you should be able to get 500 gross for your efforts(50hrs at £10 a hour), be able to claim your travel costs to sites (40p per mile for first 10k miles, 25p there after) and all other expenses. so long as you can get is down to the taxable amount of 300, you should be able to be a lot better off after tax credits, assuming you have children or are over 25.

 

rather than less than 300 going though these agencies (50 hours at £6 a hour), to take home £244 pound... livable wage but won't be doing anything exciting earning so little.

[postggj]

Lets put a stop to this right now

 

this is highly illegal and in contravention of

 

the employment rights act 1996

 

your contract of employment is with the employment agency you signed with and not a third party unless it is in the contract of employment the employment agency gave you

 

do you have that contract of employment

[postggj]

• £5.93 - the main rate for workers aged 21 and over
  
• £4.92 - the 18-20 rate
  
• £3.64 - the 16-17 rate for workers above school leaving age but under 18
  
• £2.50 - the apprentice rate, for apprentices under 19 or 19 or over and in the first year of their apprenticeship
  

 

You are entitled to the NMW even if you sign a contract agreeing to be paid at a lower rate. This is regardless of whether you sign of your own free will or because your employer persuades or makes you. The contract will have no legal effect and you must still be paid the proper rate.

[barnsley john]

Lets put a stop to this right now

 

this is highly illegal and in contravention of

 

the employment rights act 1996

 

your contract of employment is with the employment agency you signed with and not a third party unless it is in the contract of employment the employment agency gave you

 

do you have that contract of employment

 

 

iv been paid by nwm at minimum wage . 3.91 hours at £5.93

 

when i was told the hourly rate was £6 an hour and i did 8 hours .

 

yet coyles paid nwm £8 for 6 hours to get round the £7.75 minimum rate nwm can pay people at .

 

so i then get stung with a £19 admin fee

[barnsley john]

does any 1 know the particular enployment law thats been broken here ?

 

the days wage im not that fussed about now but this companys done this to at least 4 other lads last week aswell.

[postggj]

http://www.legislation.gov.uk/ukpga/1996/18/contents

 

section 13

 

only deductions are allowed with out your permission are by statutory provission

 

tax

insurance

court orders for example

 

and for over paymet of wages

 

nothing else

 

PERIOD

[postggj]

your contract of employment is with the employment agency

 

its them that have to pay you even if through a third party

 

they are in breach of your contract of employment and you are entitled to redress

[andydd]

Lets put a stop to this right now

 

this is highly illegal and in contravention of

 

the employment rights act 1996

 

your contract of employment is with the employment agency you signed with and not a third party unless it is in the contract of employment the employment agency gave you

 

do you have that contract of employment

 

I dont think thats correct.

 

I've had experience of Umbrella Companies and they are often are neccassary and can be very useful.

 

They way it works is that for many short term contract jobs PAYE wont be used, if you are going to be paid by an agency, the agency cant (by law) pay you (as an individual) directly, they can either pay you as a Limited Company (you can set one up yourself) or use an umbrealla company that does the same thing, the umbrella company will work out your Tax and Ni for you and deduct it and pay you the rest (you can offset various amounts for fares, tools, food against tax, ensuring you get more cash).

 

Obviously the umbrella comapny will charge you for this service.

 

The (long term) best way is to set up your own Ltd Company and get paid that way, however this can be a bit tricky.

 

By law, an agency cannot pay you tax-free directly it must go through either a Limited Company or an umbrella company.

 

having read the post it appears that the umbrella company hasnt done anything wrong, however i agree that the way that it is worked out can be very confusing, (I recall having to fill in complicated expense forms and working out the VAT, etc).

 

Also note that by law the umbrella company must deduct a certain amount of money to cover holiday pay this enables you to take a day off a month (or whatever) and if you dont take it when you leave the umbrella company then this money is returned to you.

 

Andy

[Russe11]

what status do you give them then, employed or selfemployed, why is there this big grey area of you get non of the rights and non of the benefits of either.

 

I have had friends get paid through such companies recently and they came to me saying the 3rd party was telling them to make up mileage claims even though they didn't even drive.

 

Complaining to the payment company will get you nowhwere from my experience, the agency will say your signed contract is with the payment company so its nothing to do with them.

 

There are companies that specifically deal with sorting out peoples tax affairs with these companies they charge for their services though, the most effective way is to bring a County Court claim against them, if your on income based job seekers this is free.

 

So claim what you are owed, the court fee and interest...

 

They will most likely just send you a cheque for the amount on the claim form so you stand to make a few extra pounds.

 

I have only had to go to hearing once where the judge made a very quick 5 min job of it as they never turned up to defend, even after trying to send a very thin defence.

 

To add the point of them fiddling the wage rates I have been paid from £7.50 to £55 by these companies before, they simply just make it up.

[Russe11]

The (long term) best way is to set up your own Ltd Company and get paid that way, however this can be a bit tricky.

 

That way was closed a few years ago I think?

[andydd]

The (long term) best way is to set up your own Ltd Company and get paid that way, however this can be a bit tricky.

 

That way was closed a few years ago I think?

 

Nope. Not true !

 

Thats the normal way for (long term) contractors to get paid and that is how I do it now.

 

You need to either start a company from scratch or buy a name that is made but not used off the shelf and off you go.

 

You can do it all yourself or there are various online outfits that will do the hard work for you, registering the name, doing the companies house stuff, certificate of incorporation, etc

 

A quick google will provide all the info you need, for example..see here..

 

http://www.contractoruk.com/first_timers/company_set_up.html

 

Andy

[Russe11]

that does not suit a labouer though?

 

Comes under IR35, basically pointless?

 

 

The aim of the legislation is to eliminate the avoidance of tax and National Insurance Contributions (NICs) through the use of intermediaries, such as Personal Service Companies or partnerships, in circumstances where an individual worker would otherwise -

 

* For tax purposes, be regarded as an employee of the client; and

* For NICs purposes, be regarded as employed in employed earner’s employment by the client.

[andydd]

that does not suit a labouer though?

 

Comes under IR35, basically pointless?

 

 

The aim of the legislation is to eliminate the avoidance of tax and National Insurance Contributions (NICs) through the use of intermediaries, such as Personal Service Companies or partnerships, in circumstances where an individual worker would otherwise -

 

* For tax purposes, be regarded as an employee of the client; and

* For NICs purposes, be regarded as employed in employed earner’s employment by the client.

 

Hi..Yep..Im aware of IR35, it doesnt stop the use of Ltd companies, it (is supposed) to stop people using them to pay less tax when in fact they are 'normally' employed by a company. However if you look into this you will find its a very grey area and most people admit its a mess and can be circumvented if you put enough effort into it.

 

Ive no idea whether the Ltd Company (or umbrella co.) is suitable for building contractors or not (I work in IT).

 

However as my link above points out, there are 3 options on getting paid,

 

PAYE, Ltd Co. or Umbrella Co. so it has to be one of those three. Although I guess you could chuck in cash in hand ! Im unaware of any other means of payment.

 

Andy

[Russe11]

Sole trader and Invoiced

[andydd]

Sole trader and Invoiced

 

I believe a sole trader though is just an individual (and as such the rules about paying them directly still apply, i.e an agency is unable to pay them directly as an individual only as a Ltd Company). A 'sole trader' can exist as an individual or as a Ltd Company.

 

I think the same applies to 'Invoiced', (I currently get paid through my brothers Ltd Company, the agency pays them and I then 'invoice' my brothers company who pay me, it is then upto me to sort out NICs and tax).

 

That is my understanding of (a very complex) issue anyway, no doubt there are other variations.

 

Andy