Wage Subsidy Scheme Issues

PickYourName

head82 wrote: »

I may be misunderstanding the OPs question but I don't think there has been a change to terms of employment.

He/she mentions a 'return' to 40 hour week. Therefore, that was the original contract of employment.

Well unless their original contract said they were getting €350 for a 40 hour week (unlikely, as that would be illegal) there has been a change in terms of employment. Even if it's not written down, thd custom and practice of what they were paid previously for the 40 hours establishes what those terms and conditions are.

PickYourName

Triceratops Ballet wrote: »

That's a major omission, comission and bonuses (we pay ours in January) were the main reason so many in our place were excluded in the first place. They artificially increased the avg net weekly pay so most of the team didn't qualify.

Surely they qualify under the revised terms?

head82

PickYourName wrote: »

Well unless their original contract said they were getting €350 for a 40 hour week (unlikely, as that would be illegal) there has been a change in terms of employment. Even if it's not written down, thd custom and practice of what they were paid previously for the 40 hours establishes what those terms and conditions are.

I thoroughly agree! But unfortunately, the 'powers that be' have deemed that some employees entitlements/statutory rights have been temporarily waived or at least deferred untill August 10.

All in the name of preventing businesses from 'going under' due to claims of redundancy, breach of contract etc.

PickYourName

head82 wrote: »

I thoroughly agree! But unfortunately, the 'powers that be' have deemed that some employees entitlements/statutory rights have been temporarily waived or at least deferred untill August 10.

What's your source for saying that? My advice (as an employer) is that all rights remain.

As an employee, if my employer was expecting me to work at a reduced rate without my agreement, I'd be looking to move on to somewhere else (the problem of finding somewhere else accepted). It's not a reasonable thing to do.

We've taken back about half our employees: all of them are on full pay (i.e. we top-up). If the sceheme wasn't there, we would not have been able to afford to re-open and they would all have been made redundant.

head82

PickYourName wrote: »

What's your source for saying that? My advice (as an employer) is that all rights remain.

Here's an example of the change to employees previous entitlements.. in relation to claiming redundancy due to lengthy period of lay-off:

https://www.gov.ie/en/press-release/1b6a1-minister-doherty-confirms-extension-of-emergency-legislation-relating-to-certain-redundancy-provisions-until-august-10th/

collsoft

But that is the only change that has been made to employment law - an employee cant trigger a redundancy claim after 4 weeks of being laid off.

All other employment law, especially around contracts of employment remain as is.

And if your employer didnt give you an employment contract, well, they will have a very hard time defending any claims from employees if it goes to WRC.

Employers beware!

head82 wrote: »

Here's an example of the change to employees previous entitlements.. in relation to claiming redundancy due to lengthy period of lay-off:

https://www.gov.ie/en/press-release/1b6a1-minister-doherty-confirms-extension-of-emergency-legislation-relating-to-certain-redundancy-provisions-until-august-10th/

head82

collsoft wrote: »

But that is the only change that has been made to employment law - an employee cant trigger a redundancy claim after 4 weeks of being laid off.

All other employment law, especially around contracts of employment remain as is.

So are you saying an employer is obliged to top up your subsidised payment if you have returned to normal working hours?

Tow

collsoft wrote: »

Employers beware!

SIPTU (or at least part of it) appears to have come out of hibernation in the last few days and realised that some employers appear to pulling a fast one...

Tow

head82 wrote: »

So are you saying an employer is obliged to top up your subsidised payment if you have returned to normal working hours?

An employer is not obliged to pay a 'top-up'. (Additional Employer Payment).

An employer is obliged to pay employees their contracted rate, unless prior agreement is made with the employee.

An employer is obliged to pay on or above hourly minimum wage.

head82

Tow wrote: »

An employer is not obliged to pay a 'top-up'. (Additional Employer Payment).

An employer is obliged to pay employees their contracted rate, unless prior agreement is made with the employee.

An employer is obliged to pay on or above hourly minimum wage.

Ok, but in reference to the OPs question in regards to being asked to return to normal 40 hr week and only receiving subsidised 350 (and whatever tax rebate).. is it not then illegal on the part of the employer to not 'top-up' to at least minimum wage if not the agreed hourly rate as would have been stated in employment contract?

If the employer refuses to do so, is this not a breach of contract?
And if employer is not obliged to do so.. ie. government sanctioned.. then the employee is left with no recourse.

PickYourName

Tow wrote: »

An employer is obliged to pay on or above hourly minimum wage.

Note this one in particular - it doesn't require reference to employment contracts, written or otherwise, and absolutely has not been suspended.

A 40-hour week at €350 is below the minimum wage, and is therefore illegal.

PickYourName

head82 wrote: »

Ok, but in reference to the OPs question in regards to being asked to return to normal 40 hr week and only receiving subsidised 350 (and whatever tax rebate).. is it not then illegal on the part of the employer to not 'top-up' to at least minimum wage if not the agreed hourly rate as would have been stated in employment contract?

If the employer refuses to do so, is this not a breach of contract?
And if employer is not obliged to do so.. ie. government sanctioned.. then the employee is left with no recourse.

As per the link I posted above: employers cannot unilaterally change terms and conditions. Nor can they pay less than the minimum wage. Recorurce is through the WRC, though getting a union involved may speed things along.

bigboss1986

bigboss1986 wrote: »

Hi all.Ive been on wage subsidy scheme since day 1 it was available.
Until today I worked 25h a week and my wages were not topped up and im getting 350 covid and 1cent wages plus 45€ tax and usc refund.

Just received call that from next monday we will be back to 40h but our wages still wont be topped up and no extra money for working sundays.
Can they force me to work 40h for 350 and giving me excuse that im also getting 40€ tak refund?
Company also didnt include my commison when calculating my income for scheme

Thanks for all the answers but what should I do.My manager knows feck all about ,head manager claims all is legal Im really stuck.My normal rate of pay is 11.5€ /h plus good commission.Im earning around 36k a year but they taking a piss expecting me to do 40h for less than 9e and I can forget about commission as there is no customers.FFS

collsoft

What I am saying is that whatever is in your employment contract still stands.

So lets say your contract of employment states that you are to be paid €600 for a 40 hour week.

If you are working 40 hours and your employer pays you a €350 subsidy and tops that up with €250 from the employer well I think that is fair enough. You are still receiving €600 for your work, and overall you are no worse off from a tax perspective (for the year as a whole)

However, if your employer expects you to work 40 hours and pays you a €350 subsidy and a €100 top up then that may be a different matter.

That all said, many employees have had to reduce wages, but that has to be agreed beforehand with the employee, and it has to be updated in the employment contract.

Also some employers have agreed deferrals of pay so they have agreed to pay you less now, but to make it up at a later date - again this has to be agreed by both sides.

head82 wrote: »

So are you saying an employer is obliged to top up your subsidised payment if you have returned to normal working hours?

collsoft

If your employment contract states a pay of €11.50 per hour then that is what you must be paid.

I would argue that it is ok for the subsidy to be a portion of this, but that the employer has to make up the rest to make it up to €11.50

If commission is part of your employment contract then it must be paid unless there are some exceptions outlined in your contract.

bigboss1986 wrote: »

Thanks for all the answers but what should I do.My manager knows feck all about ,head manager claims all is legal Im really stuck.My normal rate of pay is 11.5€ /h plus good commission.Im earning around 36k a year but they taking a piss expecting me to do 40h for less than 9e and I can forget about commission as there is no customers.FFS

Tow

head82 wrote: »

If the employer refuses to do so, is this not a breach of contract?
And if employer is not obliged to do so.. ie. government sanctioned.. then the employee is left with no recourse.

It is a breach of contract, the other option an employer has is to lay off the employee. There has to be compromise, but it is clear some employers are taking the mick.

Seve OB

PickYourName wrote: »

What's your source for saying that? My advice (as an employer) is that all rights remain.

As an employee, if my employer was expecting me to work at a reduced rate without my agreement, I'd be looking to move on to somewhere else (the problem of finding somewhere else accepted). It's not a reasonable thing to do.

We've taken back about half our employees: all of them are on full pay (i.e. we top-up). If the sceheme wasn't there, we would not have been able to afford to re-open and they would all have been made redundant.

if you are operating the scheme and topping up, then your employees are not on full pay

collsoft wrote: »

So lets say your contract of employment states that you are to be paid €600 for a 40 hour week.

If you are working 40 hours and your employer pays you a €350 subsidy and tops that up with €250 from the employer well I think that is fair enough. You are still receiving €600 for your work, and overall you are no worse off from a tax perspective (for the year as a whole).

have to disagree with you here.

covid plus top up should be compared against normal gross and not the normal net. if it is not the same, then there has been a pay cut applied.

the scheme rules makes it impossible to top up to the normal gross.

je551e

Seve OB wrote: »

if you are operating the scheme and topping up, then your employees are not on full pay



have to disagree with you here.

covid plus top up should be compared against normal gross and not the normal net. if it is not the same, then there has been a pay cut applied.

the scheme rules makes it impossible to top up to the normal gross.

Agree with you also, you can’t make up the difference in gross salary by in tax refunds

PickYourName

je551e wrote: »

Agree with you also, you can’t make up the difference in gross salary by in tax refunds

That's not what we're doing. Employees have been warned that the subsidy portion is not taxed at source and have been advised to keep any tax refund portion to pay the tax that will almost certainly be due at a later date.

The whole point of the scheme is that the employee gets paid by the employer; the fact that a portion of the pay is refunded by Revenue to the employer is irrelevant to the employee (apart from the tax issue).

je551e

PickYourName wrote: »

That's not what we're doing. Employees have been warned that the subsidy portion is not taxed at source and have been advised to keep any tax refund portion to pay the tax that will almost certainly be due at a later date.

The whole point of the scheme is that the employee gets paid by the employer; the fact that a portion of the pay is refunded by Revenue to the employer is irrelevant to the employee (apart from the tax issue).

Didn’t say you were trying at all but no one is on full pay if your operating the scheme unless their ARWNP is higher then their normal gross pay which in most cases it isn’t. I have however seen odd cases where people’s ARWNP is higher due to commissions or overtime received in Jan/Feb which gives a little loop hole.

collsoft

Hi Seve_OB,

I guess I picked a bad example in my answer, and you are correct about how it is impossible to achieve a normal gross because tapering is based on ARNWP (more on that later)

But in fairness, that was not the point I was trying to make, and I deliberately made no reference to either Gross or Net Pay.

What I am talking about is remuneration.

An Employment Contract is a legal agreement between an employer and an employee.

The employee agrees to provide the employer with a certain amount of work.

The employer agrees to remunerate the employee a certain amount for that work.

The calculations of tax only occurs after the amount of remuneration has been determined

Therefore I would argue that the concepts of Gross and Net have no relevance to the idea of remuneration. Gross and Net are terms that are only relevant to taxation, not to the remuneration for work carried out under a contract.

That remuneration will be taxed under the relevant schedule in the tax code in due course.

In my example an employer pays €600 to an employee for 40 hours worked.

To be clear, that remuneration is subject to tax (PAYE and USC).

Whether the tax is collected at the point of payment by the employer or at the end of the year by Revenue is irrelevant - it all amounts to the same thing.

If however the employer tires to remunerate the employee with €500 for the same 40 hours then that employer is in breach of contract - plain and simple.

As I mentioned, the employer must come to an agreement with the employee to reduce the remuneration (pay cut) or to defer the remuneration.

That is the essence of what I was trying to say.

In relation to the idea of "Normal Pay", I have to say that I have seen some very imaginative methods of achieving this with some employers.

There is a cohort of employers who are paying the max subsidy to employees and then topping this up to make the employee's total payments the same as "Normal Gross" - They are deliberately not tapering at point of payment.

They accept that Revenue will taper the refund that is paid to the employer, but they are looking at the amount of tapering as a cost of doing business.

Operating this way enables the employer to say that they have remunerated the employee according to the contract, and they still receive some level of subsidy.

I have asked Revenue for explicit guidance on this particular operation of the scheme, but they have not given me an answer - I guess that is deliberate on their part.

I cant say if that particular method of operation is correct or not - but I can say that there are large numbers of employers using it.

Time will tell.

Seve OB wrote: »

if you are operating the scheme and topping up, then your employees are not on full pay



have to disagree with you here.

covid plus top up should be compared against normal gross and not the normal net. if it is not the same, then there has been a pay cut applied.

the scheme rules makes it impossible to top up to the normal gross.

PickYourName

je551e wrote: »

Didn’t say you were trying at all but no one is on full pay if your operating the scheme unless their ARWNP is higher then their normal gross pay which in most cases it isn’t. I have however seen odd cases where people’s ARWNP is higher due to commissions or overtime received in Jan/Feb which gives a little loop hole.

You’ll have to explain why you say “no onee is on full pay if you’re operating the scheme”. There’s a worked example in the Revenue guidance document that shows exactly that.

Heres Johnny

PickYourName wrote: »

You’ll have to explain why you say “no onee is on full pay if you’re operating the scheme”. There’s a worked example in the Revenue guidance document that shows exactly that.

If my arnwp in Jan and Feb was 600, the most my employer can pay me now is 600 if he wants to claim full subsidy.

For me to get 600 in my bank pre covid, my gross wages would need to be 600 + and tax would bring it down to 600 take home and that was the end of the matter

Now when I get 600 in the bank I still have a future tax bill potentially to cover.

PickYourName

Heres Johnny wrote: »

If my arnwp in Jan and Feb was 600, the most my employer can pay me now is 600 if he wants to claim full subsidy.

For me to get 600 in my bank pre covid, my gross wages would need to be 600 + and tax would bring it down to 600 take home and that was the end of the matter

Now when I get 600 in the bank I still have a future tax bill potentially to cover.

People’s wages in their contracts are specified as gross, not net. If I pay someone €600/week in January, I can still pay them €600/week now and have part of it refunded by Revenue; their terms and condistions remain unchanged. The fact that some their gross pay back in January would have gone to Revenue is irrelevant. They are on full pay and they are also using the scheme. As I said, we have warned employees that part of their current income has tax due on it that will have to be paid at some future date.

je551e

PickYourName wrote: »

You’ll have to explain why you say “no onee is on full pay if you’re operating the scheme”. There’s a worked example in the Revenue guidance document that shows exactly that.

I will reword what I said , no one is on full pay if claiming the full subsidies, if you are tapering down the subsidy then yes you can bring an employee back to their contractual rate of pay.

PickYourName

je551e wrote: »

I will reword what I said , no one is on full pay if claiming the full subsidies, if you are tapering down the subsidy then yes you can bring an employee back to their contractual rate of pay.

You can reword as much as you like: it's not at all clear what you (and others) were trying to say. I made the point that employers can continue to pay people what they had been paying and still make use of the wage subsidy scheme. If they don't they must pay at least the minimum wage and have agreement to any reduction in pay from the employee (noting that employees can't agree to be paid less than minimum wage). Any employee in that situation should get a union involved and/or go to the WRC if the employer refuses to engage. Is there something you disagree with there?

collsoft

On a completely different note.

Revenue have confirmed that they a running a bulk RPN update this weekend to put employees onto a Week 1 tax basis if they are or have been on the wage subsidy scheme

This will eliminate tax refunds, but some employees may continue to pay zero tax.

They are also updating employees who are returning to work after being on PUP, even if they are not going on the wage subsidy scheme. This is to prevent the large tax refunds that would automatically issue under normal circumstances.

If employees want to stay on a cumulative basis they will have to specifically ask Revenue to be put back onto a cumulative via their MyAccount.

So employers should be expecting a large number of RPN updates on Monday morning

head82

PickYourName wrote: »

You can reword as much as you like: it's not at all clear what you (and others) were trying to say. I made the point that employers can continue to pay people what they had been paying and still make use of the wage subsidy scheme. If they don't they must pay at least the minimum wage and have agreement to any reduction in pay from the employee (noting that employees can't agree to be paid less than minimum wage). Any employee in that situation should get a union involved and/or go to the WRC if the employer refuses to engage. Is there something you disagree with there?

It's not so much a case of disagreeing, it's more a lack of clarification on what an employer is obliged to do in the current scenario and what an employee can reasonably expect.
Yourself.. as an employer.. has opted to top-up those members of staff you have kept on. Nowhere have I read that you were obliged to do so.
According to the government take on this, you could quite legitimately have requested staff to return to full time work and still only pay them the WSS portion of their salary.
Even if that subsidised payment equates to less than minimum wage.

Should the employee refuse to work under those conditions.. and justifiably so.. they face the possibility of redundancy.
Said employee should not have to resort to going thru WRC channels to achieve their basic employment entitlements.

And this is where the confusion lies (at least for me!).

No provision was made for employers to commit to 'topping-up' to minimum wage. As such.. a number of unscrupulous employers are taking advantage of this 'loophole'.

PickYourName

head82 wrote: »

It's not so much a case of disagreeing, it's more a lack of clarification on what an employer is obliged to do in the current scenario and what an employee can reasonably expect.
Yourself.. as an employer.. has opted to top-up those members of staff you have kept on. Nowhere have I read that you were obliged to do so.
According to the government take on this, you could quite legitimately have requested staff to return to full time work and still only pay them the WSS portion of their salary.
Even if that subsidised payment equates to less than minimum wage.

Should the employee refuse to work under those conditions.. and justifiably so.. they face the possibility of redundancy.
Said employee should not have to resort to going thru WRC channels to achieve their basic employment entitlements.

And this is where the confusion lies (at least for me!).

No provision was made for employers to commit to 'topping-up' to minimum wage. As such.. a number of unscrupulous employers are taking advantage of this 'loophole'.

Can you give a reference to where the government says it's OK to return people to full time work and pay them only the WSS?

As far as I'm aware, there is no "loophole".

Yes, there are clearly unscrupulous employers: we have the evidence of that in thus this thread.

alan partridge aha

Hi maybe this has been covered. Employer doing the 70 30 wage scheme.

However for January and 1st week of Feb I was getting illness benefit (work acc) of €203 and the rest was made up by my employer.

Now I've been getting this wage subsidy since end of March. It's my gross wage less €203. This wage subsidy is set to continue till end of August. Also revenue are giving me a small bit of tax back.

Does anyone know is revenue going to sort this out or am I just going to be out of pocket. I know women on maternity leave have issues as well.