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Payday date change implications
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You may be able to change the date on which some of your bills are paid: I can certainly change the date on which some of my credit cards fall due, and I think also some of my utility bills.Signature removed for peace of mind1
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danlightbulb said:Hoenir said:danlightbulb said:
But what is missed is the time value of money.
But if that is then a 'benefit' enshrined in t&c's, surely a compensatory negotiation must take place if the company wants to remove it?0 -
danlightbulb said:EnPointe said:danlightbulb said:Thanks for the replies.
The point Im making is that there is a financial hit to the employee as a result of this.
Take the point about savings. If a person is left short as a result of the pay date change, and has to pull £1000 out of savings, then that is lost interest on that amount of savings, forever. The employee has had to take a personal financial hit as a result of the terms and conditions change. It is equivalent to changing pay directly, or amending holiday entitlement or any number of other benefits.
So the point is not whether someone can or can't cover the shortfall from savings, it is that the change results in a direct financial impact.
To my knowledge the union has been involved, but this impact has not been communicated in any way. I wonder if it has been missed.
the employer has given notice
the employer is proposing to offer an Advance of pay to be repaid over a period of several months
this is entirely normal when pay dates are changed / move to monthly from weekly, move to Monthly from Lunar (4 weekly)
what is the actual loss , in law, to be compensated for ? what is the actual financial impact ?
sounds like you wnat something for nothing
as others have pointed out, if you refuse , refuse and refuse again you will be forred fire and re-hire , hopefully on the same terms of a trip to dept P45 to explore your options there
The delay in pay by two weeks means the employee has to fund that two weeks pay gap from somewhere else. Either savings or debt. That incurs a cost. If you use savings, you are forgoing interest to cover that two week gap in pay. If you use debt, obviously you will be paying interest ultimately.
So the loss is the impact of that delay in pay, creating a short term cashflow issue which costs the employee. Changing the pay date sounds neutral, sounds fairly minor, but it is not.
Even though the salary you have received over the year is the same, the delay in timing of cash means that you would be out of pocket, considerably. A two week delay means that you'll be out of pocket by 2/52nd or 1/26th of your annual salary. And you will never get this back. For it to be neutral you would also have to be able to delay your expenses, which mostly cannot be done, or at least not for free (delaying paying mortgage for example, would come at increased interest cost. And you can't delay paying for food or fuel, so that comes from where?).
Even with the offer of an advance, this does not resolve the issue. The advance gives you a bit more money up front so you can pay the bills due for the delayed pay date, but it then claws back this amount over the next 3 months, leaving you short for the next 3 months. You end up in the same position, in the red by the same amount, but its just delayed later.
So i certainly don't want something for nothing, if the impact was neutral I wouldn't care, but the impact isn't neutral.
You could compare that with all the interest received for being paid two weeks ahead of earning from your work in the second half of the month.
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General_Grant said:So you receive the same pay. What you "never get back" is potential interest. How much would that be for the average employee even if they had to finance a whole month's expenditure?
You could compare that with all the interest received for being paid two weeks ahead of earning from your work in the second half of the month.
I don’t think I’ve ever known the pay date in advance when I’ve moved jobs, I’m wondering if some employers feature it as part of the package?
Even with modern systems, doing the majority of payroll transactions in the same small window at month end seems to add risk that providers/systems won’t cope.0 -
My employer paid mid month, at some point you have to take the hit. If you were to leave at the end of a month then your last wage was on the 15 th and I’d expect your new employment to pay end of month so you’d have at least a 6 week period before more wages. Do you have any holiday money you can use to cover some of the 6 weeks? Your employer seems to be aware of the hardship some employees will face and is going above any legally required action.
When you started with this employer you received the extra two week wages in advance, now they are just wanting it back.0 -
Sarahspangles said:danlightbulb said:
So the point is not whether someone can or can't cover the shortfall from savings, it is that the change results in a direct financial impact.You’d take the same hit if you moved jobs to an employer that pays in arrears. Which I think is the more common arrangement. I can’t see any point fighting the change.
Most people will have their DDs coming out on the 1st, the day after this new pay day. So far easier to budget.0 -
danlightbulb said:
The delay in pay by two weeks means the employee has to fund that two weeks pay gap from somewhere else. Either savings or debt. That incurs a cost. If you use savings, you are forgoing interest to cover that two week gap in pay. If you use debt, obviously you will be paying interest ultimately.
Even with the offer of an advance, this does not resolve the issue. The advance gives you a bit more money up front so you can pay the bills due for the delayed pay date, but it then claws back this amount over the next 3 months, leaving you short for the next 3 months. You end up in the same position, in the red by the same amount, but its just delayed later.
Wise use of a credit card would get you round the 'borrowing costs interest' issue - and anyone who isn't in a position to do that needs to have a word with the employer.
The amounts you describe as being 'clawed back' are commensurately smaller because they are only a third of the original sum advanced, so your pay for the next 3 months is going to be reduced by an amount equal to less than five days' pay.
There may well be some individuals who are going to struggle, but taking up the cudgels on behalf of everyone, without knowing their situation, isn't a sensible way to go.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1
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