changing employees wages from weekly to monthly.

[robbyt]

The company i work for and around 80 other employees are having to change to monthly pay. We don,t want to go 3 weeks without pay, so our employer has suggested a loan to tie us over untill the first monthly wage comes in. We don't want to accept this offer. This option will cause us to be in debt with the company, meaning we will have reduced wages untill this debt is repaid. As all the staff agree we simply just can not afford a reduced wage for any length of time. We urgently need suggestions on how we can overcome this without affecting our income?. Any ideas peeple would be very gratefull... Rob...

[kira000]

Believe it or not, the employer offering a loan is a pretty standard way of tackling things. But it should ALWAYS be interest free. Often it is done as an interim payment half way through the first month of approx 2 weeks pay, then potentially a second payment of a weeks pay, 2 weeks into the second month.

This should be payable back at a rate agreeable to the employees. I have heard of cases where the loans are paid back over 3 or 4 years at rates as low as �5 a month. So that should not cause hardship.

I would sit down and work out how much you think you need to bridge you over during the first month or two, and then how much you think it is reasonable to pay back each month without causing hardship. Then make the company a proposition. The lower the payment, the less difficult it will be, but the longer it takes to get all settled. Its getting a happy medium.

[jb190281]

your company should be able to provide an 'advance of pay' - this is your basic pay minus a rough calculation of tax, ni and any other deductions you may have (approx 70% of your basic). This is advance is then deducted from your salary, and the salary doubled up. this shows on your p60 and you can ensure tax and ni is correct.

[robbyt]

Thanks for the advice kira.. when yu put it like that it don't seem to bad.

Hi jp sorry to be a pain. i don;t fully understand your answer. would'nt a pay in advance mean less money when the actual pay date came round, and also salary doubled up how dose that work ? thanks.

[kira000]

i think JB is saing something similar to me, but is trying to make the point that your company should sort out the NI and tax liabilities for any amount advanced to you.

[jb190281]

i have worked in payroll for the last 8 years. not every company does it but it is an option for the initial cross over period.

Lets say your basic salary will be �1000 a month.

For this interim period, your company would give you an advance of 70% of your basic pay = �700 - the 70% calculation allows for deductions such as tax, national insurance and any other deductions you may have. This will be adjusted later.

When you receive your first monthly pay, what the payroll office would do, is pay you 2x basic pay (or a month and a half, whatever the period is from weekly to monthly crossover) MINUS the advance of pay deduction.

So you would have �2000 basic - �700 advance, and then minus deductions. This is possibly one of the best ways to do it.

Let me know if you have any further questions i can help you with.