EU legislation - is this right?

[The Lone Gunman]

When working abroad a brollie can be very useful.
Different legislation in various countries makes it difficult (if not impossible) to work from your own UK Ltd.
It is a lot easier to work under a management company. They are all covered by EU legislation. The UK ones have to work under some dracoian GB rules too.

[hyperD]

Although never been with a brolly, and now working as a bona fide business, I still cannot see the advantage of working through one, even though you suspect you fall under IR35, when the likelyhood of an investigation is rare.

Has anyone worked out the added value of cash in bank/business account and Ltd Co. effectiveness vs takeout from brollies?

[dmini]

My umbrella has just sent me a lovely email basically telling me they are going to deduct a certain sum each month to cover holiday pay because the European Union has made a directive or something anyone have any more info?

Holiday Pay

Following a ruling by the European Court of Justice, we are obliged to deduct holiday pay, whilst you are working, and then pay it to you when you take leave.

To keep the amount that we retain to a minimum, the annual paid leave entitlement will be adjusted so that with effect from 20th July 2006 it will accrue at 1.67 days per month (20 days per year). Your entitlement to paid leave is based on National Minimum Wage (NMW).

Thus an amount based on 1.67 days per month x 8 hours per day x NMW (currently £5.05 per hour) for each month will be retained from your ‘before tax’ calculation.

This is not what the law says though!
It says If a worker's pay does not vary with the amount of work done then a week's pay is the amount due for a week's work under the worker's contract. Pay for non contractual overtime is excluded.

- If a worker's pay varies with the amount of work done then the amount of a week's pay is the pay for the normal weekly working hours multiplied by the workers average hourly rate over the preceding 12 weeks. This may occur under a piece work, bonus or commission system. To calculate the average hourly rate only hours where the worker was working, and the pay related to them, should be taken into account. Overtime hours can be included although pay for these hours should be adjusted to the normal rate. Any week in which no pay was due, for hours worked, should be replaced by the last previous week in which pay was received for hours worked.

Quote above is taken from the ACAS site. http://www.acas.org.uk/index.aspx?articleid=806

So, provided you are not being paid minimum wage & dividends etc, which dodgy payment method is discussed on other threads, if you work 12 weeks on a specific contract, then take 1 week off, that should be paid AT THE SAME RATE AS THE PREVIOUS 12 WEEKS.

[Denny]

Brilliant for brollies - they get to deduct an extra £67.47 from everyone every single month, and pocket the interest. Multiply that by the 15000 or so on Parasols books, and you're looking at over 12 million quid. They get to keep the interest, but the EU says it's only fair...

I don't get this brolly notion at all. They are supposed to be substitute Directors for you yet they act more like bona fide employers.

I would never touch one of these with a bargepole. It's either limited or freelance for me through a disguised brollie vehicle that I know about.

[Mordac]

My umbrella has just sent me a lovely email basically telling me they are going to deduct a certain sum each month to cover holiday pay because the European Union has made a directive or something anyone have any more info?

Holiday Pay

Following a ruling by the European Court of Justice, we are obliged to deduct holiday pay, whilst you are working, and then pay it to you when you take leave.

To keep the amount that we retain to a minimum, the annual paid leave entitlement will be adjusted so that with effect from 20th July 2006 it will accrue at 1.67 days per month (20 days per year). Your entitlement to paid leave is based on National Minimum Wage (NMW).

Thus an amount based on 1.67 days per month x 8 hours per day x NMW (currently £5.05 per hour) for each month will be retained from your ‘before tax’ calculation.

Brilliant for brollies - they get to deduct an extra £67.47 from everyone every single month, and pocket the interest. Multiply that by the 15000 or so on Parasols books, and you're looking at over 12 million quid. They get to keep the interest, but the EU says it's only fair...

[mcquiggd]

More cash in the bank for the umbrellas, earning interest for them, not you...

Of course they will 'enforce' this regulation. Get out clause applies to approving your dodgy expense claims though

[dmini]

My umbrella doesn't, but then they wrote into their contract they are not employing me, just processing payroll.
Interestingly though, if they are deducting holiday, are they liable for all the other employment things, that are legal requirements - some sick pay, maternity leave,....

[dang65]

My umbrella has had me doing this as "a legal requirement" since last November when I changed contracts. They insinuated at the time that I should have been doing it long before that. Must be a legal requirement that's trickling very slowly into fashion I guess.

They don't use that minimum wage formula though and I might have to pass that one on to them. Although you get all the cash back anyway in the end, I've never been able to establish where the deducted money is actually held until you claim it, or what happens to the interest it presumably accrues in someone's bank account somewhere.

[ASB]

Yes I beleive so. Not sure abouyt the 20 days though, and it can include bank holidays which would reduce the retention. you get paid it on departure. Imn certain circumstances it is possible to state the rate includes holiday pay.

[chunkymonkey]

My umbrella has just sent me a lovely email basically telling me they are going to deduct a certain sum each month to cover holiday pay because the European Union has made a directive or something anyone have any more info?

Holiday Pay

Following a ruling by the European Court of Justice, we are obliged to deduct holiday pay, whilst you are working, and then pay it to you when you take leave.

To keep the amount that we retain to a minimum, the annual paid leave entitlement will be adjusted so that with effect from 20th July 2006 it will accrue at 1.67 days per month (20 days per year). Your entitlement to paid leave is based on National Minimum Wage (NMW).

Thus an amount based on 1.67 days per month x 8 hours per day x NMW (currently £5.05 per hour) for each month will be retained from your ‘before tax’ calculation.