08 / 3 / 2011 4.29pm
What is included in the definition of pay?
For the purpose of the regulations pay includes:
Basic pay based on the annual salary an agency worker would have received if recruited directly (usually converted into hourly or daily rate).
Overtime payments, if qualifying hours have been completed.
Annual pay award -Where a hirer gives an annual pay increment, an agency worker should receive the same pay increment as if recruited directly.
Shift/unsocial hours allowances
Payment for annual leave (where the entitlement is above the statutory minimum of 5.6 weeks (at a full time equivalent rate) which can be added to the hourly or daily rate.
Bonuses or commission payments directly attributable to the amount or quality of the work done by the individual, including where sales or production targets achieved and payments related to quality of personal performance.
Additional discretionary, non-contractual bonuses that are paid with such regularity that they have become custom and practice, e.g. where a Christmas bonus has been so paid.
Vouchers or stamps which have monetary value and are not “salary sacrifice schemes” – e.g. luncheon vouchers, child care vouchers.
What is excluded?
Occupational sick pay (the regulations do not affect an agency worker’s entitlement to statutory sick pay. If an agency worker has a contract of employment with the agency, and depending on qualifying service, they may be entitled to such payments from the agency.)
Occupational pensions (agency workers will be covered by automatic pension enrolment).
Occupational maternity, paternity or adoption pay.
Redundancy pay (statutory and contractual).
Notice pay (statutory and contractual).
Payment for time off for trade union duties.
Guarantee payments as they apply to directly recruited staff if laid off.
Advances in pay or loans e.g. for season tickets.
Expenses such as accommodation and travel expenses.
Payments or rewards linked to financial participation schemes such as share ownership schemes, phantom share schemes.
Overtime or similar payments where the agency worker has not fulfilled qualifying conditions that a permanent member of staff would have to fulfil. So, for example, an agency worker would have to be doing work over and above standard hours to qualify for overtime, not just do a shift that permanent staff tend to do on an overtime basis.
The majority of benefits in kind, given as an incentive or reward for long-service, for example, where Building Society staff may be given a reduced rate mortgage , employer funded training allowances.
Any payments that require an eligibility period of employment/service, if not met by the agency worker (same treatment as someone directly employed) or if the agency worker is no longer on assignment when the bonus is paid (if the same applies to directly recruited employees).
Bonuses which are not directly linked to the contribution of the individual – e.g. a flat rate bonus that is given to all directly recruited workers to encourage loyalty or long term service.
Additional discretionary, non-contractual bonuses, as long as these payments are not made with such regularity that they have become custom and practice e.g. a one-off payment to celebrate a particular event.