6 FARM NEWS
DEC/JAN 2020 • farmers-mart.co.uk
Your responsibilities as an employer,
and how you can protect yourself…
HMRC are becoming increas-
ingly vigilant about the
businesses they are investi-
gating and have intensified
their investigations into rural
and equestrian businesses in
particular. Here, McClarrons
insurance brokers look at what
you need to consider.
What makes an employee,
an employee?
An employee is someone who
works under an employment
contract. Incorrect employment
status is a more common mistake
than you might think. Often,
people are advised they are
self-employed when in reality,
they should be regarded as an
employee. This is usually simply
down to a misunderstanding of
when a person needs to be cate-
gorised as an employee working
under an employment contract
or self-employed.
Those who are self-employed
pay their own tax and National
Insurance but also set their own
working hours, holiday, rate
of pay, issue invoices for work
carried out and generally, work
for more than one company or
person. If you advise someone
who should be an employee
that they are self-employed, it is
unlawful and has the potential to
lead to an employment tribunal.
Therefore, it is important that you
review who your employees are,
whether they are workers, volun-
teers or self-employed, and what
their rights and duties are, as well
as considering your own.
Employers Liability
It is not only important to have
your staff on the correct employ-
ment basis but once you do, it
is also vital to have the correct
Employers Liability insurance in
place for your needs. As soon as
you become an employer, you
must, legally, have an Employers
Liability Policy in place, with cover
for at least £5million through an
authorised insurer.
Alternatively, if you use truly
freelance/self-employed/contract
workers, you need to ensure
they have the right Public Liability
cover. Proof of this should be
provided and kept on record.
At McClarrons, we are happy to
advise on the level of cover you
and/or your contractors may
need. It is important this cover is in
place to protect all parties should
an accident occur.
Contracts
As an employer, you will
have ‘contracts of employment’
between you and your employ-
ees as this is a legal requirement.
Employees should be issued
with a written contract within
two months of the start of their
employment. Failure to supply
this within these set timescales
could result in a fine and at
worst, legal proceedings.
Employee contracts should
outline the employment condi-
tions, rights, responsibilities and
duties and are there to protect
both the employee and you,
the employer. There may be
additional things that need to be
considered and documented
for employees, such as train-
ing plans or accommodation
arrangements.
Wages
The National Minimum Wage
(NMW) must be paid to those
employees who are eligible for
it; there are no exceptions. Every
April, the government reviews the
NMW – the current rates of which
are set out in the table below.
The hourly rate you pay
workers must be at least the
minimum wage and will be set
out in the employment contract.
Employers must pay this rate for
every hour worked – failure to
do so is illegal.
£8.21
£7.70
£6.15
£4.35
£3.90
Any extra hours worked must
be paid at this rate too or given
as time off in lieu. A written
record should be kept of any
extra hours worked and when
these were taken back as time
off or when they were conse-
quently paid for.
Payslips should be issued
regularly and should make clear
the gross amount of wages, the
amount of any fixed or variable
deductions and the reasons for
them, e.g. National Insurance,
Tax etc. and the net value of
wages.
Pay Deductions
If you have a worker who you
provide accommodation for,
there is a maximum amount that
can count towards their National
Minimum Wage pay – this offset
is £7.55 a day or £52.85 a week.
Like the minimum wage, this
25 and over rate
21-24 rate
18-20 rate
Under 18 rate
The apprentice rate
(which applies to those
under 19 or those who are
over 19 but in the first year
of their apprenticeship)
rate can change annually when
it is reviewed by government in
April. If a staff member does get
benefits like livery or accom-
modation, they should be billed
back for these, rather than
costs being deducted from their
wages.
Rural Protect – Specialist
Management Liability
At McClarrons, we offer
Rural Protect – a specialist
Management Liability policy
for rural businesses, which can
include Employment Practices
Cover. Through the policy, you
get complimentary access
to law firm, rradar, who can
provide free templates for
employment contracts, helping
you to stay on top of your duties
as an employer. Being proactive
helps you run your farming
business effectively, as well as
reducing the chances of HMRC
finding anything out of place or
you finding yourself facing an
employment tribunal.
Rural Protect also offers
support should you find yourself
needing legal representation and
advice to defend yourself or to
take action against an employee.
The policy provides you not
only with legal representation
but also covers the fees for
this. With premiums starting at
£405.80 (including Employment
Practices Liability), Rural Protect
offers affordable protection
that could be invaluable in the
event of an employment dispute
or claim made against you
by HMRC; it also protects you
against claims made by all other
UK regulators.
If you have any questions relating
to insurance or would like to know
more about our Rural Protect policy
and what else it covers, contact
McClarrons’ Farm Team on 01653
609152 or by emailing farm@
mcclarroninsurance.com.