Umbrella company ended contract to avoid Maternity payments :(

[ASB]

Well drafted Lisa.

A little O/T how do you deal with SMP ?

As I understand it you can reclaim 92% of the cost from the government; I rather imagine your NI payments don't allow you the 103% rate :-).

So, in effect you are needing to absorb the 8% from your fee. Obviously you will have factored this in across the collective employees and overall at any given point if is probably a fairly minor burden and I am sure there are loads of stats out there to enable you to make a decent guess at what it will be and set your charges accordingly.

So that is how I imagine it would all work in practice for an umbrella.

But, what is SMP based on ? For the first 6 weeks it is 90% of average weekly earnings then it drops.

Would I be correct in assuming that the average weekly earnings are what is paid and subject to tax/ni ?

(I only ask because I am aware that some umbrellas pay based on minimum wage plus a bonus due to the paying between assignments thing).

I'm just curious that's all.

[Scruff]

Thursday night is sockie night!

Just a random non-sequitur... (to be frank, I had intended posting into a different thread, and it was in my Cut'nPaste buffer)

[LisaContractorUmbrella]

Well drafted Lisa.

A little O/T how do you deal with SMP ?

As I understand it you can reclaim 92% of the cost from the government; I rather imagine your NI payments don't allow you the 103% rate :-).

So, in effect you are needing to absorb the 8% from your fee. Obviously you will have factored this in across the collective employees and overall at any given point if is probably a fairly minor burden and I am sure there are loads of stats out there to enable you to make a decent guess at what it will be and set your charges accordingly.

So that is how I imagine it would all work in practice for an umbrella.

But, what is SMP based on ? For the first 6 weeks it is 90% of average weekly earnings then it drops.

Would I be correct in assuming that the average weekly earnings are what is paid and subject to tax/ni ?

(I only ask because I am aware that some umbrellas pay based on minimum wage plus a bonus due to the paying between assignments thing).

I'm just curious that's all.

Your assumptions are right - as with any other employer we can only reclaim 92% so the other 8% comes from our bottom line. It is based on average earnings over a set period - we use Sage payroll so it's calculated for us - it definitely shouldn't be based on minimum wage. I understand that there are some companies that deduct an amount from their workers which is then paid back as SMP/SSP etc but this in no way covers their statutory obligations and would upset HMRC no end

[original PM]

Your assumptions are right - as with any other employer we can only reclaim 92% so the other 8% comes from our bottom line. It is based on average earnings over a set period - we use Sage payroll so it's calculated for us - it definitely shouldn't be based on minimum wage. I understand that there are some companies that deduct an amount from their workers which is then paid back as SMP/SSP etc but this in no way covers their statutory obligations and would upset HMRC no end

Hmm - most brollies pay you the minimum wage and then a 'bonus' based on what is left of your invoice value after they have taken out the minimum salary and statutory deductions.

So when you are not working there is no 'invoice value' and so therefore SMP will be based on salary which is minimum wage.

When I was working with a brolly in the past I am sure SMP was literally the statutory government minimum.

[ASB]

So when you are not working there is no 'invoice value' and so therefore SMP will be based on salary which is minimum wage.

I think there is a potential issue there; but the rules are those set by HMG. I believe SMP is based on the average of the last 8 weeks. (For the first 6 weeks).

It seems that there is the potential to be disadvantaged if out of contract. But that is no different to somebody who happens to be out of work (actually better since I don't think if out of work SMP would apply).

[Michigan13]

Thank you Lisa (again) ..I used your template to amend my version to prevent it from being so lengthy! Lol

Had an email back from the senior employee care advisor stating that he has passed my query onto their compliance team, who will be back in touch in due course.

Fingers crossed the outcome is a positive one! Will keep you updated

[LisaContractorUmbrella]

Thank you Lisa (again) ..I used your template to amend my version to prevent it from being so lengthy! Lol

Had an email back from the senior employee care advisor stating that he has passed my query onto their compliance team, who will be back in touch in due course.

Fingers crossed the outcome is a positive one! Will keep you updated

Glad to help

[Michigan13]

Thank you everyone for all your help and advice
Wanted to give you an update before I'm off on my merry way..

I received a phone all on Monday (literally just after my 20wk scan) from the umbrella company who informed me that the decision had been rescinded! I received an email yesterday to confirm this. I'm back on their books.. Will be entitled to full SMP and should send my Matb1 in as soon as I receive it.. Happy days!

Thanks again... And best wishes x

[TheFaQQer]

It's amazing how quickly companies change their minds once they realise that you're prepared to take decent advice!

[BillHicksRIP]

Bravo to all involved.