5. Employment issues
If you decide to employ your own support worker, you will have certain legal responsibilities. As an employer, it is your own responsibility to ensure that you are aware of, and comply with, these responsibilities. You may find it helpful to consult a local support organisation or one of the organisations listed at the back of this booklet.
If you arrange your own support workers, they may be either self-employed or employed directly by you. People who are 'self-employed' are responsible for their own tax and National Insurance. They are not covered by employment legislation and so don't have a right to things like Statutory Sick Pay. If they are not self-employed you, or an organisation acting on your behalf, will be the employer and will therefore be legally responsible for your employee's tax and National Insurance contributions, as well as other employment issues (see page 14 for further information).
However, it is not up to you or your support worker to decide if they are self-employed or employed. The decision is ultimately up to HM Revenue and Customs for issues relating to tax and National Insurance and up to an employment tribunal for issues relating to employment law. The decision is based around looking at what the person's job involves.
If you have a support worker who works exclusively for you, it is unlikely that they will be given self-employed status. Even if your support worker signs a declaration that they are self-employed, this may not protect you if HM Revenue and Customs denies them self-employed status. Therefore, it is important that you check about your support worker's employment status with your local tax office, or with a local centre for independent living who have expertise in this area. You can also read HM Revenue and Customs booklet 'IR56 Employed or self-employed?' or contact HM Revenue and Customs Employer's Helpline for further information - see Section 8.
Paying your own support worker
You need to decide how you want to pay your support worker. Here are some of the options:
- SAAS pay the support worker directly
You can ask SAAS to pay the support worker directly in regular instalments, e.g. every month. SAAS will need an invoice signed by your employee and yourself before payment can be made. SAAS can provide you with a standard invoice. If you have arranged your own support worker, you can ask SAAS to pay the support worker directly in regular instalments, for example every month. SAAS will send you notification of payments they make direct to your support worker.
If your support worker is self-employed, they will make their own arrangements for tax and National Insurance contributions, therefore the support worker will be able to receive payment directly from SAAS (on receipt of an invoice signed by your employee and yourself).
If your support worker is not self-employed, you will be the employer and will therefore need to deduct tax and National Insurance contributions ( NICs) from your support worker's wages before SAAS can pay them. You may also need to pay Employer's NICs for your employee if they earn over a certain amount. Once you have made these deductions you should send an invoice to SAAS who will then pay the support worker for this amount. You will then need to pay your employee's tax and NICs, as well as your own NICs, to HM Revenue and Customs. Further information on tax and National Insurance is detailed below. - You pay your own support worker
You may choose to make the payments to your support worker yourself. SAAS will write to you after your assessment letting you know about payment procedures. You must make sure that you pay your employee as soon as possible after you receive the payment from SAAS. It is often useful to open a separate bank account for this purpose - this way you can keep track of payments more easily and you are less likely to lose access to your DSAs if you go overdrawn. Again, you will be legally responsible for how much tax and National Insurance contributions your support worker owes, as well as making your own Employer National Insurance contributions (see above). You will need to send an invoice to SAAS in order to receive payment. - Your institution pays your support worker
If you use a support worker employed by your college or university, the institution will be the employer and will therefore take on all employer responsibilities, including paying the support worker and responsibility for other matters such as tax and cover for absence. You can either receive your DSA money directly to pay the institution for employing a support worker for you, or you can ask SAAS to pay your DSA directly to the institution who will pay your support worker for you. - An agency pays the support worker
If your institution does not employ support workers, or you need a specialist worker, you may decide to use a private agency to arrange your support. If you choose this option, the agency will be the employer and will therefore pay the support worker for you. You can either ask SAAS to pay your DSA directly to the agency or you can send an invoice to SAAS to request that the money is given straight to you to allow you to pay the agency yourself. - A payroll service pays the support worker on your behalf
If you are employing your own support worker, you may be able to use a local payroll service to handle all payments. This might be particularly useful if you also receive Direct Payments from social work to meet care needs. Your local authority or local centre for independent living can advise you about any local payroll services.
It is essential to keep records of the number of hours of help you receive and any payments you make. It is also essential to keep copies of all receipts and invoices in case the originals are lost or mislaid.
Case study
Colin is studying a politics degree at the Open University. Colin is deaf and requires a British Sign Language interpreter to help him in meetings with his tutor. As he recruited his support worker directly, Colin is the employer and therefore has to register himself as an employer with HM Revenue and Customs. Each month, Colin signs off the support worker's timesheet, calculates his wages by working out the hourly rate and deducting tax and National Insurance contributions, and provides his support worker with a payslip. Colin pays his support worker by cheque every month and sends an invoice to SAAS with a breakdown of the costs he has incurred.
Employee rights
Any support worker that you employ automatically has certain rights, regardless of how much they earn. These rights are:
- itemised pay statement
- written terms and conditions
- time off for public duties, and 4 weeks holiday leave per year pro rata
- to be paid the minimum wage (details from National Minimum Wage Helpline)
- not to be discriminated against on grounds of sex, race, disability, sexual orientation, religion, belief or age
- not to be discriminated against for trade union membership
- written notice of employment ending
- health and safety rights
Employees have certain rights around working time - they must have a rest period of at least 11 hours between working days, must have at least one day off each week, and must have an in-work break if their working day is more than 6 hours. They must have at least 4 weeks paid leave each year - a week's leave is the number of hours they usually work in a week, e.g. if they usually work 2 hours a week, they are entitled to 8 hours off each leave year. As the employer, you can set the times when your employee can take annual leave. For further information about working time regulations, contact the Health and Safety Executive.
Tax and National Insurance
When you directly employ support workers, you are legally responsible for how much tax and National Insurance contributions they owe, and you must deduct the amounts from their wages and pay this to HM Revenue and Customs. As an employer you may also be liable to pay Employer's National Insurance contributions if your workers earn more than a set amount each week (this amount is called the 'lower earnings limit' and is set by the Government each year). You can get details of this from HM Revenue and Customs. SAAS will not reimburse you for Employer's National Insurance contribution. If your support workers earn above this set amount they will also have a right to Statutory Sick Pay and Statutory Maternity Pay. If this happens you should seek advice from ACAS and from Skill Scotland.
As well as paying your support worker, at the end of the year you will also need to give them a record showing their details for the whole year. You will also need to complete an Employer Annual Return every year to HM Revenue and Customs summarising all national insurance contributions and tax you have deducted during the year. Finally, you are also legally required to complete an End of Year summary for each employee.
For more information about tax and National Insurance issues, you should seek advice from a local centre for independent living, HM Revenue and Customs or your local Citizens Advice Bureau.
Case study
Elizabeth is a mature student on the first year of a chemistry degree at university. Elizabeth has mobility difficulties and requires a helper to assist her with her practical coursework. Before starting university, she employed a personal assistant to help her at home using Direct Payments. Following her needs assessment at the university, she used her DSA to employ a laboratory assistant. Elizabeth uses the services of a local payroll service (run by her local centre for independent living ( CIL) for both her support workers.
Each month, she sends a completed timesheet for each of her employees to the CIL who will prepare a monthly payroll, including working out tax and National Insurance deductions, provide Elizabeth with payslips for her employees, and advise her on the amount she is required to pay to HM Revenue and Customs each month. The CIL also register Elizabeth as an employer, prepare her end of year tax returns and advise her about setting up bank transfers to her employees' accounts.
Employers' Liability Insurance
Most employers are legally required to take out insurance against liability for injury or disease sustained by their employees in the course of employment. Guidance from the Health and Safety Executive ( HSE) says that, in general, you may need employers' liability insurance for someone who works for you if:
- you deduct National Insurance and income tax from the money you pay them
- you have the right to control where and when they work and how they do it
- you supply most materials and equipment
- you require that person themselves to deliver the service and they cannot employ a substitute if they are unable to do the work
- they work exclusively for you
- they are treated in the same way as other employees, for example if they do the same work under the same conditions as someone else you employ.
If you are going to be receiving DSA payments directly and then paying your support workers, it is likely that you will need Employers' Liability Insurance, particularly if they work exclusively for you. More information about Employers' Liability Insurance is available from the Health and Safety Executive, Citizens Advice Bureau or a centre for independent living.