help plz. new start up having trouble with employment law surrounding wages

roamingandy_2

Hi, i'm planning to open a new social enterprise running events in the local community and i was hoping someone on here might be able to help me with an dilema i'm having regarding employment law.

My issue is that i would like to have a small team (6) of recent graduates working on these projects and i would like to be able to pay them but all the money i have will be going into the projects so if they do not at least break even i would be unable to do so.

my intention's are honest, i hope that we would all make at least minimum wage but i will be very clear to anyone working with me that there is absolutely no guarantee we will make any money at all, and i will divide all income equally (divided by the amount of hours put in) as it seemed fairest. i will advertise it as a great and rewarding learning experience and good fun; and anyone is welcome to walk away without notice, no hard feelings if they find a more stable income.

as i cant promise minimum wage i was thinking about having these as self employed positions but am not clear on how to make clear the distinction between me employing them and self employment. also i'm a little worried that having to register as self employed will put some people off.. although being able to claim tax credits would be a big advantage, does anyone know how long it usually takes to apply for?

other options i've considered/expored are:

volunteers; this would be easy but i would like to be able to reward them for their effort.

normal employment under 16hrs/week so they could stay on job seekers allowance, but i wouldnt be able to commit to paying minimum wages.

an internship, which i guess is really what this most resembles but which i have struggled to find reliable information on. i believe that it would be possible to have them work unpaid and still give 10% each of any income at the end of the month. i expect this is the most likely format but i'm not sure about it or what forms etc i would need to fill in.


i would be extremely grateful if someone who has experience in this type of thing could offer some advice as at the moment i'm quite lost and buried up to the eyeballs in guides on legislation and laws etc.

thanks very muchly,

Andy

DylanO

roamingandy wrote: »

Hi, i'm planning to open a new social enterprise running events in the local community and i was hoping someone on here might be able to help me with an dilema i'm having regarding employment law.

My issue is that i would like to have a small team (6) of recent graduates working on these projects and i would like to be able to pay them but all the money i have will be going into the projects so if they do not at least break even i would be unable to do so.

my intention's are honest, i hope that we would all make at least minimum wage but i will be very clear to anyone working with me that there is absolutely no guarantee we will make any money at all, and i will divide all income equally (divided by the amount of hours put in) as it seemed fairest. i will advertise it as a great and rewarding learning experience and good fun; and anyone is welcome to walk away without notice, no hard feelings if they find a more stable income.

as i cant promise minimum wage i was thinking about having these as self employed positions but am not clear on how to make clear the distinction between me employing them and self employment. also i'm a little worried that having to register as self employed will put some people off.. although being able to claim tax credits would be a big advantage, does anyone know how long it usually takes to apply for?

other options i've considered/expored are:

volunteers; this would be easy but i would like to be able to reward them for their effort.

normal employment under 16hrs/week so they could stay on job seekers allowance, but i wouldnt be able to commit to paying minimum wages.

an internship, which i guess is really what this most resembles but which i have struggled to find reliable information on. i believe that it would be possible to have them work unpaid and still give 10% each of any income at the end of the month. i expect this is the most likely format but i'm not sure about it or what forms etc i would need to fill in.


i would be extremely grateful if someone who has experience in this type of thing could offer some advice as at the moment i'm quite lost and buried up to the eyeballs in guides on legislation and laws etc.

thanks very muchly,

Andy

As long as you have no problem with them suing you for minimum wage at any point, then go ahead.

Willow_K

Sounds like the internship idea maybe viable. The other option is to find out whether you could use volunteers but give them some kind of bonus - maybe gifts in kind such as vouchers rather than cash.

Probably best to speak to someone at your local business link and get some professional advice.

[Deleted User]

The best option there is volunteers. You need to draw up a volunteering agreement with them and you may reimburse them with reasonable expenses. You could then either employ them at a later date or pay them a lump sum at the end providing the appropriate tax and NI are deducted.

roamingandy_2

@Joanne, i was under the impression that if you pay volunteers anything other than expenses, even at the end of contract, that it would change our relationship to employer/employee and they would be legally entitled to claim minimum wage (which i hope they will receive anyway but could not afford to pay if we are not successful).

@Willow, thanx. i think this is probably the most workable method but have struggled to find info on it.

@DylanO, that is what i'm trying to work out how to avoid.

paulofessex

OP l was just wondering what the community projects were your planning i.e. will they involve children or vulnerable adults, if so would CRB checks come into it and have you taken factored in the costs when considering recruiting volunteers or would you be expecting them to pay for that.

Also are you aware that most LA's/Councils have a person in post who's job it is to assist community projects apply for external funding i.e Lottery monies. May be something to explore if you weren't aware

Savvy_Sue

You might also get useful advice if you googled volunteer plus your area / city / town to find your local volunteer bureau.

paulofessex wrote: »

OP l was just wondering what the community projects were your planning i.e. will they involve children or vulnerable adults, if so would CRB checks come into it and have you taken factored in the costs when considering recruiting volunteers or would you be expecting them to pay for that.

The CRB does not charge for checking volunteers, however you have to go through an Umbrella Body and some of them make an admin charge, and it's worth shopping around as these can vary widely.

Also note that if you get them checked as volunteers and then pay them, and the CRB find out, you'll be in deep doodah. Also that if they are volunteering with a view to gaining 'required' work experience then a charge should be made: the best example I can give is that if someone is volunteering with vulnerable adults with a view to training to be a social worker then you should not treat them as volunteers.

Of course none of this is relevant if you don't need to do CRB checks ... see here if in doubt.

roamingandy_2

thanx so much guys, our focus was going to be more general community but i have worked alot with special needs kids charities before and have good links to a few so i'm sure that CRB's will become relevant at some point. i will definitely contact the council regarding possible grants

the projects would be more like affordable and free community events, like healthy cooking and living faires, urban gardening and the benefits of it, talks open to the public by leaders in different fields, 5-aside football tournaments, positive graffitti event (graffitti places that want to be brightened up), decorating dirty streets, refurbishing old furnature and career advice for the unemployed.. basically i'm setting the net pretty wide and anything that works we'll keep doing.

i think you've all covered volunteers really well thanx, my 1st preference would be not tying my hands into not being able to reward workers financially if we are successful as would be the case with volunteers. could anyone help with advice on self employed workers or internships?

Savvy_Sue

I just don't see how you can make these people self employed - or how THEY would find the money for it if you can't? Look on the HMRC website, there's a tool there for determining if you're employed or self-employed, and if you want to say what people should do, where and when, and expect THOSE people to turn up rather than their best mate if they fancy a day off, then they are not self-employed.

Internships, yes, possibly, maybe, but I'd say the 'best' internships have a recognised programme, ie "in this placement you'll learn / take responsibility for ..." and it might be hard to do that.

BTW, I'd say your first volunteer should be a fundraiser ...

Horace

If your events are free for the community then you won't make any money at all. I think you need to find out what is going on in your local area. For instance, near me in Birmingham there is an Eco Centre where I can attend free courses and paid ones, there are other events such as walks etc which are free or at nominal cost. Some of the local councillors will run clean up operations in their constituency as well as planting schemes.

You need some advice from Business Link or even your local Chamber of Commerce as they give advice to people pre-startup.

You cannot employ people if you have no money to pay them - events are hard work and people should be rewarded a fair day's pay for a fair day's work.

Remember you will also need public liability insurance of your own and you should not soley on the venues that you use having public liability insurance. If someone has an accident at your event the onus is on you.

I think you need to think more carefully, do more investigation with local council - they have leaders who provide community events etc.

One thing though - don't exploit people.

CKhalvashi

If you can’t guarantee minimum wage, an internship is generally the best option. You then have the option of either profit-sharing (generally a %age of profit to the team as a whole) or offering the odd bit of money for initiative.

CK