Dealing with Weather Enforced Staff Absence

Some areas of the UK have already seen very harsh and disruptive weather conditions this year. London and the south east could well be in line for it before the end of winter. If the snow and ice arrive, or storms bring down trees and close roads, some or all of your staff may not be able to get to work. You may even have to close your premises for a while.

To mitigate your losses during harsh weather conditions, it’s a good idea to make some flexitime arrangements or prepare staff for home working.

Flexitime Working

Sometimes in bad weather staff can get to work later and might need to leave earlier in order to get home. This could be accommodated in a flexitime arrangement as long as you had a fail-safe method of recording the hours worked, and set up a policy for normal flexitime working.

For example, staff must normally work at least their contractual hours during each four week period. A maximum amount of hours worked over that specified in the contract can be carried forward to the next four week period. You might want also to allow a maximum number of debit hours to be carried forward as well. In harsh weather conditions, this ruling could be relaxed once these debit hours are reached.

Home Working

An employer’s responsibility for the health and welfare of staff applies equally to those working from home, so you and the staff member need to assess any risks and deal with them as part of your preparation for home working arrangements. Many people can use their own computers to work at home but some employers issue laptops. In addition to supplying any necessary equipment, you may want to loan a mobile phone to home workers. If you don’t normally have home working arrangements in place, you need to judge the value of setting it up just for a few days or weeks of bad weather.

Home produced work is judged by results rather than observed performance. To maintain some control, you may want to set a series of call-in times to get reports on progress.

Some people work better in solitude, without the distractions of their workmates around them. Home working can also be very cost effective for an employer. You could find you want to leave the home working option in place after the winter weather.

Don’t forget you can discuss all these options, and how to fund them, with your outsourced bookkeepers.

Royal Mail Survival Plan: a Threat to Small Businesses

What would happen to your business if your mailing and shipping costs rose by around 50%? That is what might happen this April if Royal Mail and Ofcom have their way. Their proposals are to put up 2nd class post possibly to as much as 55p, and to have no price limits set for various other services, such as:

· 1st class letters, large letters and packets
· 2nd class deliveries of large letter and packets
· Standard parcels
· Business mail in metered, franked or prepaid envelopes.

How to Avoid More Heavy Royal Mail Losses

In the last year, Royal Mail delivered 16 billion letters to around 28 million addresses, yet still lost £120 million. This is attributed to a decline in the use of postal services as people communicate in different ways using new technology. In 2010, the Hooper Report on the postal sector concluded that the volume of post will continue to lower and by 2015 Royal Mail could lose up to 40% of its business.

Ofcom, which took over the regulation of Royal Mail from Postcomm last October, has been conducting a public consultation on how to give more commercial freedom to the UK’s postal service while safeguarding the universal postal service for consumers. The results will shortly be published, after which Royal Mail will publish its stamp prices from April 2012.

Ofcom is charged with policing the Universal Service Obligation placed on Royal Mail to collect and deliver letters six days a week an packets five days a week, at affordable rate to every UK address. The regulator also monitors the performance standards of 93% of 1st class mail arriving the next day and 98.5% of 2nd class mail being delivered by the third day following posting.

Clearly Royal Mail cannot continue to sustain the losses while maintaining the performance required without some drastic changes.

The Effect on Small Businesses

Royal Mail is also currently required to offer its competitors – the likes of UK Mail, TNT, DHL – access to its delivery network, at a price which is subject to rules set and monitored by Ofcom. If Royal Mail prices rise, they will probably have to follow suit.

For businesses that rely on the post to deliver goods, their costs will rise exorbitantly, as will those of sending out invoices and promotional material. The Forum of Private Business is campaigning against the price rises which will add yet another burden to businesses in these difficult times.

You would be wise to consider how this will affect your business. As your outsourced bookkeepers, we would be happy to help you work out alternative cash flow projections for the eventuality, so that you can consider where you can make changes to accommodate the additional costs.

New Pension Regulation Dates Postponed

Small business managers have had one onerous burden reduced by the government, which has now decided to revise the dates by which the auto-enrolment pension process for all staff must be commenced and completed. If you haven’t yet managed to start planning for these pension reforms, you’ll be relieved to hear that you may have up to two extra years to prepare and complete the enrolment of your eligible staff.

Higher Contributions to be Phased in

The original announcement that employers’ initial minimum contributions of 1% would quickly rise to 2% and then 3% caused some consternation, to which the government has also responded. The hike to 2% is to be delayed by one year, from October 2016 to 2017, and the further rise to a minimum of 3% will not be enforced until October 2018. The percentage applies to qualifying earnings of between £5,035 and £33,540.

Changes in Staging Dates

Your staging date is the date by which you should have your pension scheme in place and be able to start the auto-enrolment process. As long as you have fewer than 50 people in your PAYE scheme on 1 April 2012, your staging date will not be before June 2015. Then you will have until April 2017 to complete the process for all eligible staff members. If you set up a new business after April, you will have until April 2018 to get everyone enrolled.

Dates are also changed for employers with between 50 and 249 people on their payroll. Larger payroll companies already have dates between 1 October 2012 and 1 February 2014, which are not affected by the changes. As with the smaller companies, the dates are allocated according to the numbers on the payroll at April 1st.

You should be informed of your staging date by the DWP. If you want to check it ahead of that, you may be able to look it up on tables on the Pensions Regulator website, once they have all been updated, but in case of changes to your staff complement, you might as well wait until April, otherwise you might have to check it again.

The Learning Curve for Businesses

According to Steve Weeks, the Minister for Pensions, the government has now done all it can to ease the burden of pension reform on the business world. There is, however, pressure for a campaign to educate businesses on what they have to do when. If you are or will be an employer, you will have to select an appropriate pension scheme and do some financial planning. Your outsourced bookkeepers should be able to advise and help you.