Late / Backdated Pay

DoctorStrange

An employer is constantly late in paying it's staff. 

Sometimes two month's wages are paid on the same day.

When this happens the employees receive two payslips. One dated on the 5th of the payment month and the other dated on the actual payment date of that month (usually the last working day).

The payslips state they are for different payment periods.

Only one physical payment is made to the employees if that matters, which is the sum of both payslips.

Are employers allowed to backdate payslips like this? If so, how far can they backdate before it's problematic?

badmemory

The 5th of a month is the last day in a tax period.  For example the current period would be 6th Oct to 5th Nov.  So that will be why that date is used.  Pay a month late arriving to me more than once would equal looking for another job.  Having no access to funds to pay employees does not bode well.  Perhaps looking at the affected persons goverment gateway account may be a good idea.

Fredw56

It may be better for you than if the put it through as a payment for just one payment period. The way NI is calculated is the difference.
I used to work for one  those skanky umbrellas outfits as an employee and they had a habit of failing to pay one period and then putting through the next as pay for just the second period. There was a loss to the employee in excess NI contribution. NI is not like income tax. I think the umbrella was managing its cash flow and really paying us on a paid-when-paid basis.

chrisbur

Fredw56 said:

It may be better for you than if the put it through as a payment for just one payment period. The way NI is calculated is the difference.
I used to work for one  those skanky umbrellas outfits as an employee and they had a habit of failing to pay one period and then putting through the next as pay for just the second period. There was a loss to the employee in excess NI contribution. NI is not like income tax. I think the umbrella was managing its cash flow and really paying us on a paid-when-paid basis.

Although the general rule for NI is that the deduction is based on the payment or payments that fall within the pay period there are exceptions one of which covers late payments  This is covered in section 3.2 here....

https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2024-to-2025-employer-further-guide-to-paye-and-national-insurance-contributions

"3.2 Working out National Insurance contributions for employees not paid on their usual payday

If the actual date of payment and the usual payday are in the same tax year, treat the early or late payment as if it had been made at its usual time.

Example 1

Two separate weeks’ wages for weeks ending 6 June and 13 June are paid on 13 June. Work out National Insurance contributions separately on each week’s payment. "

This is something that many payroll workers are not aware of.

EDIT  Have amended the link to up to date version.

DoctorStrange

Thanks all. 

If seems, then, that late payments are accounted for within the PAYE rules, but what about minimum wage legislation?

If a minimum wage employee hasn't been paid for two or three months is that a breach of any rules?

badmemory

I don't know if they can help but you could try ACAS.  I would have thought though that not being paid for 2 or 3 months is not just a minimum wage problem.

General_Grant

DoctorStrange said:

Thanks all. 

If seems, then, that late payments are accounted for within the PAYE rules, but what about minimum wage legislation?

If a minimum wage employee hasn't been paid for two or three months is that a breach of any rules?

As long as they eventually do pay at least the minimum for the hours worked then there isn't a breach.

However, if you had a contract which said, for example, you would be paid on 21st of the month and they didn't pay until 28th that would be a breach of contract.  Obviously it would be a more serious breach of contract if it were three months rather than 7 days but, as well as needing to be a contractual right to be paid at a certain time you would need to know that it was "worth it" to pursue late payment.

penners324

Get you CV updated immediately and start looking elsewhere.

This company is going under soon

Juliette100

It’s a breach of contract under the ERA. 

The ERA entitles an employee to take their employer to an employment tribunal for an unlawful deduction of wages. Technically speaking, not paying your employees on time is classed as a deduction of wages, although this could be remedied if payment is only a couple of days late. This does not make regular delays acceptable and steps should always be taken to ensure wages are paid on time.

 

Fredw56

chrisbur said:

Fredw56 said:

It may be better for you than if the put it through as a payment for just one payment period. The way NI is calculated is the difference.
I used to work for one  those skanky umbrellas outfits as an employee and they had a habit of failing to pay one period and then putting through the next as pay for just the second period. There was a loss to the employee in excess NI contribution. NI is not like income tax. I think the umbrella was managing its cash flow and really paying us on a paid-when-paid basis.

Although the general rule for NI is that the deduction is based on the payment or payments that fall within the pay period there are exceptions one of which covers late payments  This is covered in section 3.2 here....

https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2024-to-2025-employer-further-guide-to-paye-and-national-insurance-contributions

"3.2 Working out National Insurance contributions for employees not paid on their usual payday

If the actual date of payment and the usual payday are in the same tax year, treat the early or late payment as if it had been made at its usual time.

Example 1

Two separate weeks’ wages for weeks ending 6 June and 13 June are paid on 13 June. Work out National Insurance contributions separately on each week’s payment. "

This is something that many payroll workers are not aware of.

EDIT  Have amended the link to up to date version.

Well it did not work out fairly in my case. Every time they did it I paid excess employee and employers NI.