AWR - how does it affect me?

[malvolio]

Back to my original question.. I have been contracting with the same company for 2 years, pay normal PAYE tax through an umbrella company and I am still not clear if I are entitled to PAID holiday, and who pays this.. Anybody? I am sorry, none of the links I have read are UNCLEAR as to who gets what.. Its like they just write about AWR just for the sake of it, without attempting to get people to understand what they are entitled to.

My umbrella company (Parasol) says the following:

"Your statutory holidays are the holidays you are legally entitled to as our employee and these total 28 days per year as per the UK’s Working Time Directive. Your statutory holiday entitlement is detailed in your contract of employment. We pay you for all of your statutory holidays. "

So are they saying they are paying for my holiday over and above the money I bill my customer for? I think not, I have not seen a penny from parasol, neither do I expect them to pick up the bill.. If anybody are to pay for these holidays I expect the end customer to pay.

Sigh....

Contractors don't get paid for not working. It's kind of a basic tenet of being a contractor.

Parasol, or any other umbrella, will make sure there is funding in place to pay you something when you're not working, intentionally or not. But I'll give you good odds it's funded out of your gross rate.

Or put it another way. If you end up in scope of the AWR and start looking for paid holidays, you just added around £10k to your end client's costs for your engagement. Where do you suppose that is going to come from?

You want paid holidays, go permanent. Simples...

[Zippy]

Malvolio is correct. Parasol deduct a sum from your "pay" for holidays and then immediately refund it (so you get it in your salary immediately). They'll be doing the same with the NMW that they will be obliged to pay you when you are out of contract i.e. they will deduct an amount then pay it out 'in advance'.

[centurian]

It's kind of a basic tenet of being a contractor.

Correct - and I totally agree with that tenet - but AWR doesn't care about unofficial industry norms.

It may be possible for an umbrella contractor to convince a judge that they are effectively an agency temp - and so that the "holiday pay" they receive is basically an accounting trick - and lets be blunt - it is.

Would we want them to do that - of course not. It breaks that basic tenet. But the umbrella contractor may see things differently. And it only takes 1 successful case to make life difficult with clients for the rest of us.

[malvolio]

Correct - and I totally agree with that tenet - but AWR doesn't care about unofficial industry norms.

It's not unofficial, its in my contract.

It may be possible for an umbrella contractor to convince a judge that they are effectively an agency temp - and so that the "holiday pay" they receive is basically an accounting trick - and lets be blunt - it is.

Would we want them to do that - of course not. It breaks that basic tenet. But the umbrella contractor may see things differently. And it only takes 1 successful case to make life difficult with clients for the rest of us.

But who is going to bring that case? The brolly user is employed by the brolly so already meets the qualification of being an Agency Worker. Their gross pay including all the variations of added extras is almost certainly equal to or higher than that of a permie in the same role doing the same job. The AWR guarantees parity of working conditions; if you're above parity it can't really be used. Then again a brolly user thick enough to want to apply the AWR is probably thick enough not to realise that all he'll acheive will be a reduction in his overall package.

[scope]

Contractors don't get paid for not working. It's kind of a basic tenet of being a contractor.

Parasol, or any other umbrella, will make sure there is funding in place to pay you something when you're not working, intentionally or not. But I'll give you good odds it's funded out of your gross rate.

Or put it another way. If you end up in scope of the AWR and start looking for paid holidays, you just added around £10k to your end client's costs for your engagement. Where do you suppose that is going to come from?

You want paid holidays, go permanent. Simples...

Yes I understand, but the whole purpose of AWR is to give temporary staff (ie Contractors) Paid holiday (and Training, breaks, etc) at the same level as permanent staff.. While I COMPLETELY understand your comment - if AWR changes nothing then isnt AWR just another pointless piece of legislation that doesnt change anything?

[Steven@Parasol]

Yes I understand, but the whole purpose of AWR is to give temporary staff (ie Contractors) Paid holiday (and Training, breaks, etc) at the same level as permanent staff.. While I COMPLETELY understand your comment - if AWR changes nothing then isnt AWR just another pointless piece of legislation that doesnt change anything?

Scope if there is anything you want to talk about in more detail you can always give our employee support team a call, tweet us @askparasol or join the Parasol Contractor Network on Linked In.

More then happy to give you my direct details as well. Just PM me.

[malvolio]

Yes I understand, but the whole purpose of AWR is to give temporary staff (ie Contractors) Paid holiday (and Training, breaks, etc) at the same level as permanent staff.. While I COMPLETELY understand your comment - if AWR changes nothing then isnt AWR just another pointless piece of legislation that doesnt change anything?

No, the whole point is to give you parity with the overall package, opportunities and company benefits given to permanent staff on the same role doing the same job. If you really want a £10k a year drop in income and a limit to how many days holiday a year you can take, then go ahead.

It's not aimed at the likes of thee and me, it's aimed at unprotected agency workers (the clue is in the title) who work on fruit farms, cockle beaches and behind the stacks of filing. It iwll work very well nideed for them. We are out of scope.

[original PM]

Scope if there is anything you want to talk about in more detail you can always give our employee support team a call, tweet us @askparasol or join the Parasol Contractor Network on Linked In.

More then happy to give you my direct details as well. Just PM me.

Alternatively you could just give an explanation on here - you know just for clarity like.... sometimes makes it easier to learn if the questions and answers are in the same place!

[Steven@Parasol]

Alternatively you could just give an explanation on here - you know just for clarity like.... sometimes makes it easier to learn if the questions and answers are in the same place!

Sorry Zippy and Malvolio had pretty much given the same answer that I would have given. I was just making the point that scope is always welcome to contact us as well.

The only slight quibble with Zippy's post is that its not necassarily NMW. It's NMW or 50% of the previous value of the assignment, whichever is highest.

[Support Monkey]

Yes I understand, but the whole purpose of AWR is to give temporary staff (ie Contractors) Paid holiday (and Training, breaks, etc) at the same level as permanent staff.. While I COMPLETELY understand your comment - if AWR changes nothing then isnt AWR just another pointless piece of legislation that doesnt change anything?

AS I See it.
AWR was brought in to give TEMP workers the same rights as permis however CONTRACTORS work in a slightly different way TEMPS generally either work for the client or though an agency, if you work for the client they will be responsible for paying (after 12 weeks) holiday pay ect, if they work PAYE through an agency the agency or the client will be responsible for paying.

However a CONTRACTOR working through an umbrella company is generally for the term of the contract seen as an employee of the umbrella company the umbrella company are responsible for paying and obviously some have already covered themselves as they take the holiday/sick pay from you and pay it back straight away thereby complying with the rules.

Of course if your limited company you work for yourself so in theory for the most part are outside AWR