Holiday Entitlements?

Squall Leonhart

I'm hoping somebody can weigh in on this for me.

I started working with a firm via a recruitment agency in June 2015. Initially I was going to be a contractor, i.e., invoice the recruitment agency and sort out my own tax, PRSI affairs etc.

Prior to receiving my first payment from the recruiter (but after signing my contract), it was agreed that I would be a PAYE employee of the recruitment company instead, in essence I would get paid monthly, all taxes, usc, prsi etc taken care of for me. This suited me fine.

As a contractor, there is no paid leave, no bank holiday pay, no sick pay, no annual leave pay etc. Indeed my contract does state "This is a flat rate contract of XX per hour (before tax). This rate includes all Holiday Pay and other entitlements. There is no overtime rate. As discussed, the contract allows only for payment of hours worked".

However, being a PAYE employee, doesn't this give me a statutory entitlement to annual leave of 8%?

I know the waters have been muddied now due to original contract signed and what transpired. I do have all pay slips etc though over the last 46 weeks of paid work (there has been a few weeks of unpaid leave taken) which would prove that I am PAYE.

Can anybody advise?

davo10

As a paye paying employee rather than a self employed contractor, you are entitled to annual leave accrued on hours worked at a rate of 8% up to a maximum 20 days per year (unless otherwise stated in your contract that you are entitled to more leave). However, if you have a fixed term contract with your employer, your employer can pay you for the annual leave accrued but not taken at the end of your contract.

You need to get your contract sorted, a self employed contractor has different obligations (taxation) and rights than an employee. Your employment contract will set out your leave entitlements, including whether you can carry over unused leave from one calendar year to the next.

It is really the recruitment agency you need to talk to as they are your employers, not the company where you work, they may be responsible for paying your annual leave as I suspect they are subcontracting your services to the company where you work.

Squall Leonhart

davo10 wrote: »

As a paye paying employee rather than a self employed contractor, you are entitled to annual leave accrued on hours worked at a rate of 8% up to a maximum 20 days per year (unless otherwise stated in your contract that you are entitled to more leave). However, if you have a fixed term contract with your employer, your employer can pay you for the annual leave accrued but not taken at the end of your contract.

You need to get your contract sorted, a self employed contractor has different obligations (taxation) and rights than an employee. Your employment contract will set out your leave entitlements, including whether you can carry over unused leave from one calendar year to the next.

I definitely need to get my contract sorted, but at the moment I am where I am, and need to try sort out the last 10 months of hours worked and associated annual leave due.

Based on what I have described, you would feel I am entitled to annual leave (or payment in lieu)? I've got approx 1750 hours worked since June, 8% of that would be 140 hours. Am I due to be paid these 140 hours? I am not a self employed contractor, I am just getting a bottom line every month as a PAYE worker.

Squall Leonhart

davo10 wrote: »

It is really the recruitment agency you need to talk to as they are your employers, not the company where you work, they may be responsible for paying your annual leave as I suspect they are subcontracting your services to the company where you work.

Sorry I didn't see your edit until after I had posted.

I agree, I am not approaching the company I work with at all, if I am owed holiday pay, which I think I am, then it will the recruitment agency I will be following up with.

Mrs OBumble

When it was decided to make you an employee rather than a contractor, was the hourly rate you get reduced by about half? It should have been, and this new amount should have been listed in your new employment contract.

I'm sure I've heard something about there is a legal option to be used which can include having hour holdiay pay rate built into your hourly rate. I have no idea what conditions this option can be used in, though.

Squall Leonhart

Mrs OBumble wrote: »

When it was decided to make you an employee rather than a contractor, was the hourly rate you get reduced by about half? It should have been, and this new amount should have been listed in your new employment contract.

I'm sure I've heard something about there is a legal option to be used which can include having hour holdiay pay rate built into your hourly rate. I have no idea what conditions this option can be used in, though.

It was reduced, yes. But not by half. It was reduced to allow the recruiter not to lose out when paying employers PRSI for me. It covered the 10.75% they're liable to pay on weekly earnings of over 376eur, and then some.

Mrs OBumble

Squall Leonhart wrote: »

It was reduced, yes. But not by half. It was reduced to allow the recruiter not to lose out when paying employers PRSI for me. It covered the 10.75% they're liable to pay on weekly earnings of over 376eur, and then some.

Was the and-then-some equal to the 8% needed to pay you holiday pay? If not, then the holiday pay is included scenario probably stands.

FYI, recruiters commission is often around 30%. Which sounds huge until you factor in the employer PRSI and holiday pay and admin costs (which can be a high if you're doing weekly timesheets).

Squall Leonhart

Mrs OBumble wrote: »

Was the and-then-some equal to the 8% needed to pay you holiday pay? If not, then the holiday pay is included scenario probably stands.

FYI, recruiters commission is often around 30%. Which sounds huge until you factor in the employer PRSI and holiday pay and admin costs (which can be a high if you're doing weekly timesheets).

11% cut would have sorted out the employers PRSI, rounded to nearest whole number I was cut by 20% for going PAYE over self employed contractor. I'm not going to argue with that cut.

I am paid monthly, not weekly. I accept there are of course admin costs, but preparing payment is a once a month job, not four times a month job, so less admin.

Do you by any chance have any link where I can read more about the "holiday pay is included in your hourly rate" thing? Just seems like the type of thing any employer could claim. Thanks for your help.

PlainP

I am a contractor under an umbrella company. I am employed by the recruitment agency for another company. I pay PAYE as I am under an umbrella company. I am not entitled to holiday/sick pay even though I pay PAYE.

You need to go back to your contract. If you are working under an umbrella company you are not entitled to holiday/sick pay as you would be getting a higher rate per day and would need to deduct the money yourself for your holiday/sick pay. There are recruitment agencies who do provide holiday/sick pay but you would need to ask your own recruiter where you stand on this.

Just because you pay PAYE does not entitle you to holiday/sick pay.

Misguided1

I think this might be where your problem lies....

"This is a flat rate contract of XX per hour (before tax). This rate includes all Holiday Pay and other entitlements. There is no overtime rate. As discussed, the contract allows only for payment of hours worked".

You have signed a contract in which it states that your holiday pay is included in your hourly rate. They will argue that your statutory entitlement to holiday pay has been recognized and you are being compensated for it. I believe (I'm not a solicitor) that irrespective of you being a PAYE employee of the company, they are not in breach of anything as they have already considered annual leave in your hourly rate.

Squall Leonhart

Misguided1 wrote:

I think this might be where your problem lies....


You have signed a contract in which it states that your holiday pay is included in your hourly rate. They will argue that your statutory entitlement to holiday pay has been recognized and you are being compensated for it. I believe (I'm not a solicitor) that irrespective of you being a PAYE employee of the company, they are not in breach of anything as they have already considered annual leave in your hourly rate.

I understand where you're coming from totally, but the contract was signed at a time it was understood I'd be a self employed contractor. The PAYE thing happened after, which was when a rate change occurred too , but contract wasn't updated. Perhaps this is one for chalking up to a learning experience.

Misguided1

Squall Leonhart wrote: »

I understand where you're coming from totally, but the contract was signed at a time it was understood I'd be a self employed contractor. The PAYE thing happened after, which was when a rate change occurred too , but contract wasn't updated. Perhaps this is one for chalking up to a learning experience.

Might be worth having a chat with them on that basis - they might be understanding....

Squall Leonhart

Misguided1 wrote: »

Might be worth having a chat with them on that basis - they might be understanding....

I'll try it, but not too confident I'll be met with anything other than a "g'way you!" :pac:

Jim2007

Squall Leonhart wrote: »

As a contractor, there is no paid leave, no bank holiday pay, no sick pay, no annual leave pay etc. Indeed my contract does state "This is a flat rate contract of XX per hour (before tax). This rate includes all Holiday Pay and other entitlements. There is no overtime rate. As discussed, the contract allows only for payment of hours worked".

However, being a PAYE employee, doesn't this give me a statutory entitlement to annual leave of 8%?

Can anybody advise?

You need to have a conversation with your agency and understand the nature of your contract. Such contracts are normally done up to mask the fact that you really are a contractor and are designed to put as much cash into your hands as possible, hence holidays are converted to cash and other payroll costs are stripped down to the minimum. The main reason people accept such contracts is to ensure they can claim full unemployment benefits when the contract ends, while at the same time putting as much cash in to their hands as possible during the life of the contract.

Most agencies have another model which does include holidays and benefits etc... but all that really happens is the amount you receive is paid out over a longer period, in other words the hourly rate goes down.

Mrs OBumble

OP, what you've got is called a rolled-up contract.

They used to be common in the UK, but the European court found they were illegal. I haven't been able to find any links about them being legal or not in the republic.

runawaybishop

Misguided1 wrote: »

I think this might be where your problem lies....

"This is a flat rate contract of XX per hour (before tax). This rate includes all Holiday Pay and other entitlements. There is no overtime rate. As discussed, the contract allows only for payment of hours worked".

You have signed a contract in which it states that your holiday pay is included in your hourly rate. They will argue that your statutory entitlement to holiday pay has been recognized and you are being compensated for it. I believe (I'm not a solicitor) that irrespective of you being a PAYE employee of the company, they are not in breach of anything as they have already considered annual leave in your hourly rate.

Annual leave cannot be swapped for money, unless you are leaving the company and have days left.

Squall Leonhart

After discussions with the agency, they've agreed to increase my hourly rate by 8% to include for holiday pay and keep days off at my own expense.