As summer approaches, prepare your payroll for part-year workers
By Chris Wright, Partner and ARA specialist
The agricultural sector is a major employer of seasonal staff, often called ‘part-year workers’ for payroll purposes.
As the warmer months approach and the industry begins to look towards the busy harvest period, you may be considering taking on additional help in the form of part-year employees.
This can be a solid financial decision as opposed to taking on permanent staff – but it can present challenges when managing your payroll.
Recent changes in legislation mean that you may need to take a look at your payroll for seasonal staff and ensure that all employees receive the correct holiday allowance and pay.
Rising rates
Don’t forget that the National Minimum Wage (NMW) and National Living Wage (NLW) increased on 6 April 2024 and are now set at:
- Under 18 – £6.40 per hour
- 18 to 20 years old – £8.60 per hour
- Over 21 years old – £11.44 per hour
This applies to all workers, including seasonal or part-year workers.
As part-year workers, particularly those engaged casually or on zero-hours contracts, may not have set hours, you will need to have a system to record all hours worked so that employees are paid according to their statutory entitlement.
Going on a (summer) holiday
Almost all people who are classed as ‘workers’ are entitled to 5.6 weeks of holiday per year on a pro rata basis, depending on how many hours they have worked in a pay period.
This applies to those with irregular or part-year hours – so you must employ enough staff to cover both the busy period and holiday taken by seasonal workers.
Amends to the Working Time Regulations 1998 in January 2024 were brought in to reduce confusion around the holiday entitlement for workers on irregular hours.
Irregular hours workers will accrue holiday based on 12.07 per cent of the hours worked within a particular pay period.
You are also now allowed to pay holiday pay in one of two ways:
- Paying for holidays in the pay period in which they are taken
- Using the ‘rolled up’ method, which adds a percentage of total holiday pay onto each pay period.
Although not previously allowed, rolling up holiday pay has been permitted from 1 April 2024 – but it must follow certain rules.
If the ‘rolled up’ method is used, you must make it clear on a worker’s payslip what proportion of their pay comes from holiday pay.
You must also pay it in the period in which the holiday accrues and calculate it based on total earnings during a pay period.
How can we help?
We recommend that you speak to us if you are planning to take on part-year workers to cover the seasonal demands of your farm or agricultural business.
We understand that agriculture can be labour-intensive and create cash flow challenges within your business, so we can advise you on correctly arranging your payroll while also planning for maximised efficiency.
For tailored advice, please contact our team today.