What's the correct procedure for this?

ptben

I have been working for my employer for just under 2 years now. The first year it was through an agency as a temp but in May 2007 the employer paid the recruitment fee for me and then asked me to start submitting an invoice for payment (basically self employed) as that would be the only way they would pay me. Long story short, the HMRC have deemed that I am an employee and have been since May 2007 which has been agreed by the Personnel Dept of my employer. A Job Description has been written which will be followed by a contract of employment (which I should have got last year). But, there is some disagreement over how my salary should be calculated.

My invoiced rate was agreed at £15 per hour but obviously I never got paid holidays, bank holidays, sickness etc but since I have been deemed an employee I am now entitled to backpay for those periods as I should have had the same rights as any other employee in the first place.

My employer believes my salary should be 37 hours for 46 weeks at £15 per hour equating to £25,530 per year. However, if you spread this over 52 weeks (as per any other employee) it works out at £13.27 not £15.

I say my hourly rate is £15 per hour (as agreed in May 2007) and as I should have been paid for 52 weeks like everyone else my salary is 37 hours for 52 weeks at £15 per hour equating to £28,860.

Which should be used?

My employer is expecting a large bill from HMRC for unpaid tax, NI, interest and penalty due to "avoiding" their responsibilities and I think this is having a bearing on trying to make my salary lower.

Conor_3

The lower rate. Typically holiday entitlement works out at 10% of gross wages so if you were on £15 self employed, I'd expect £13.50 so £13.27 isn't a bad deal. At the end of the day, you are being paid £15 an hour for the 46 contracted weeks - it's just that they're paying it over 52 so you get a lower weekly amount but get that 52 weeks of the year instead of having 6 weeks with no money. As long as you're only working 46 weeks but get paid £25530 over the year, I'd not be complaining.

Your employer will be expecting a large bill...employers NI contributions (in addition to those you pay) are 12.5% of gross.

ptben

Thanks for clearing that up. Hopefully there may be some negotiation with my employer rather than just rolling over an accepting it as it was their mistake in the first place.