Umbrella Company AWR Mythbusters

This week's AWR "MythbustersTM" debates the issue surrounding how much pay between assignments a worker is entitled to when they are employed on a Swedish Derogation contract.

Q. "As far as PBA is concerned, we only have to pay that worker for the number of hours they had guaranteed in their contract"

A. MYTH!

This is a common misconception, and one that has been heard around the office a few times over the past couple of weeks. The amount of a PBA claim paid to a worker is unrelated to the number of hours guarantee in their Swedish Derogation contract. To find out how much a worker is entitled to, you must find out what the highest level of pay earned by a worker is in either the preceding 12 weeks (where the assignment has lasted longer than 12 weeks) or at any point during the assignment to date (where the assignment has lasted less than 12 weeks). It is linked to "pay reference periods", so if a worker is paid weekly, it will be the highest weekly pay received by that worker in the period leading up to the claim being made. If the worker is paid monthly, it will be the highest monthly pay, etc.

The amount claimed by the worker for PBA must not be less than 50% of the highest amount of pay received in the relevant period, and this minimum amount must not be less than minimum wage. So, if little Johnny has worked on assignment with Widget Maker Limited for twelve weeks, and during that time he worked 40 hour weeks, this will be the number of hours that will be looked at when deciding how much to pay little Johnny while he's at home watching the latest Jeremy Kyle episode, "I slept with my sister's husband and now he's pregnant!". If his hourly rate on this assignment was 7 per hour, the highest pay received in the relevant reference period would be 280, and 50% of this is 140. As this is below minimum wage, little Johnny would be entitled to 40 hours at 6.08, working out at 243.20 gross (the employer must account for income tax and NI in the usual way).

Want to find out more? Visit paraplus' website for more information from the industry experts in AWR compliance.

http://umbrellaparaplus.co.uk/blog

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