Many UK organisations will be caught short by the onset of new flexible working regulations due to be introduced next week, says the Institute of Payroll Professionals (IPP), the UK’s leading membership body for individuals working in payroll.
On 6 April 2009, the government is extending the right to request flexible working hours for parents with children up to the age of 16. This could mean the right to work flexibly being extended to an additional 4.5 million workers.
As a result more and more organisations will come under increasing pressure to offer flexible working practices to their employees.
But the IPP says many organisations have not considered the implications the new legislation could have on their business and in particular on the company payroll.
Karen Thomson, IPP Associate Director of Policy and Research, says:
“The new law is likely to put increasing pressure on employers to consider flexible working if employees with young children request it. However, while the benefits of adopting flexible working practices are clear in terms of increased productivity and employee satisfaction, the challenge for management is to ensure that it is able to manage the payroll of a disparate workforce. Whether staff work flexible hours or not they still expect to be paid on time!”
Some types of flexible working will undoubtedly require more payroll administration, particularly during the early stages of the implementation.
This is most likely where hours change periodically (for example where a working mother changes her hours to match school holidays) or where a full-time job becomes a job-share.
Usually the employment contract or statement of employment sets out the working time that each employee must fulfil as a minimum, over each day and each week.
These will have to be modified to reflect the change to the employee’s working patterns so that salary payments and National Insurance Contributions can be adjusted accordingly.
Likewise allowing staff the smallest of freedoms places increased pressure on managers to track the amount of hours worked by their employees, especially those paid an hourly rate.
Karen Thomson adds: “Failure to prepare for this significant change in legislation could be seriously disruptive if left to the last minute. It is vital that employers are fully informed of what this legislation means and precisely what rights staff do and do not have. The key is preparation!”
Any company unsure of the payroll implications of the flexible working legislation is encouraged to become a member of the IPP.
As part of the membership, the IPP offers support and up to date information for all payroll related matters through a dedicated Advisory Service, which is managed by Officers who are at the heart of government policy.