Frequently Asked Questions

[divider]

We explain some of the terms and questions you might come across in the world of employment.

Use the links below to jump to the information you’re looking for.

Information on your rights as an employee

Information on National Minimum Wage

Information on Income Tax

[divider]

When can I leave school?

In Scotland:

• pupils who turn 16 on or before 30 September can leave school on 31 May of that school year
•  pupils who turn 16 between 30 September and 1 March can leave school at the Christmas break of that year.

[divider]

When can I start working?

Many people can’t wait to leave school and start earning. For some, college and university aren’t desirable options, and they want to start working straight away. However, there are guidelines about what under 18’s can and can’t do in employment. Employment law can be tricky when it comes to under 18s, but the basic rules are as follows:

• If you’re under the age of 13, it’s illegal for you to work unless you make special arrangements with your local council
• At 13 you can take on work that isn’t likely to affect your health, safety or education.
• At 14, there is a wider range of jobs you can do, but there may still be restrictions on the workplace – you may not be able to work on a  building site or in a factory, for example
• When you turn 16, you’ll be classed as a “young worker” and while you’ll have more choice in what you can work, you won’t have the legal rights adults do – until you turn 18.

If you’re still at school the law is:

• During term time, you can only work for two hours on weekdays
• Throughout term time, you can only work for five hours (if you’re aged under 15) or eight hours (if you’re aged over 15) on Saturdays
• During a school holiday, you can work for up to five hours (if under 15) or eight hours (if over 15) on a weekday or a Saturday
• You cannot work more than two hours on a Sunday
• You cannot work before 7am or after 7pm on any day of the week

If you’ve left school but are still under 18 you cannot be made to work more than eight hours a day or 40 hours per week, with exceptions only in extreme circumstances.

[divider]

What rights do I have as an employee?

All employees have rights, whether they are full or part-time, casual or temporary, including:

• holiday pay
• National Minimum Wage
• protection from discrimination

[divider]

 Do I get time off to study or train?

If you are aged 16 or 17, you are legally entitled to take time off work to study or train for a qualification to help you reach a particular standard of education. You should be allowed a reasonable amount of time off and be paid at your normal rate of pay. If you are 18, you also have the right to paid time off to complete any studies or training begun before you started work.

[divider]

Will I get paid for time off work if I am sick?

If you are off work for four days in a row or more and you earn more than £111 a week, you will be entitled to Statutory Sick Pay (SSP). SSP is minimum amount of money paid by employers to employees off work because they are sick and can last up to 28 weeks.

[divider]

What are zero contracts?

You might have heard about the “zero-hour contract” dispute in the news. The main issue is the difference between a “worker” and an “employee”.

‘Zero contracts’ are employment contracts  used in the UK which do not have a set number of hours that the employee will be asked to work. Instead of having a set number of hours per week you will be asked to be ready to work whenever you are required. Under this contract, employers do not have a duty to provide work for the employee, and employees are paid only for the hours they work.

While these contracts give both employees and employers some flexibility – ideal if you’re a student or working a second job – you are only paid for the time you work, not the time you spend waiting for work to come up (although in some cases, you might receive payment for time spent waiting on work premises) or “on call”. This can be tricky if you have financial responsibilities such as rent and bills.

‘Key time’ contracts are those where you are guaranteed some work, but are not guaranteed regular hours each week.

In either case, you might not be guaranteed sick pay or holiday pay, but you should still receive an amount of pay which meets the National Minimum Wage rate for your age.

Legally, employees must be given a statement of terms and conditions of their employment, including hours of work (It doesn’t have to specify what these are.) and overtime requirements, the rate of pay they’ll be given and how often they’ll be paid.

[divider]

 What is an illegal contract of employment?

If you get all or part of your wages paid cash in hand, and National Insurance and tax contributions are not paid on these wages when they should have been, you’re in an illegal contract of employment, especially when you know you’re being paid in this way to avoid paying tax and national insurance. A contract will also be illegal if it is for an immoral or illegal act.

A contract of employment will not be illegal if only one of the parties is not declaring the payments and/or making appropriate deductions.

If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:

• maternity or paternity leave
• sick pay
• Jobseeker’s Allowance

In addition you could end up having to pay the tax and National Insurance contributions yourself.

[divider]

What happens if I’m dismissed from my job?

If you’re fired from your job, you will usually have the right to a period of notice. This is the length of time between being told you have to leave your job and the day that you actually leave (the date of your dismissal). This rule doesn’t apply if you’ve been dismissed for gross misconduct. Gross misconduct includes things like stealing from your employer or being drunk or violent at work.

If you’ve worked at the company for less than a month, you don’t have a right to a minimum period of notice, although you still have the right to “reasonable notice”. The legal minimum period of notice you should get is:

• one week, if you’ve worked for your employer for one month but less than two years
• two weeks, if you’ve worked for your employer for two whole years
• two weeks plus an extra week for each full year’s employment over two years.

[divider]

What’s National Minimum Wage?

National Minimum Wage (NMW) is the minimum pay per hour almost all workers are entitled to by law. However, the amount of NMW depends on the person’s age and whether they are an apprentice.

There is no set national minimum wage until you are over school leaving age.

These rates are for the National Living Wage and the National Minimum Wage. The rates change every April.

 

Year	25 and over	21 to 24	18 to 20	Under 18	Apprentice
October 2016 (current rate)	£7.20	£6.95	£5.55	£4.00	£3.40
April 2017	£7.50	£7.05	£5.60	£4.05	£3.50

If you are over school leaving age but under 18, you cannot usually legally work more than eight hours per day or more than 40 hours per week. You must have 12 hours rest time between each working day and two rest days every week. You are also entitled to a 30 minute rest break if you work for longer than four and a half hours. There are also limits on the hours you can work at night. You cannot usually work between:

• 10pm and 6am, or if your contract says you must work after 10pm, between 11pm and 7am. There are some exceptions for people who work in hospitals, agriculture, retail work, hotels and catering, bakeries, post/newspaper deliveries, or who work in cultural, artistic, sporting or advertising industries

• midnight and 4am, except in exceptional circumstances

These rules change when you turn 18.

[divider]

 What is a National Insurance Number?

A National Insurance (NI) number is your own personal account number. It’s a number unique to you, and you keep the same number through your life – it never changes. Your number allows HRMC to keep track of the National Insurance contributions and tax you pay and ensures they’re properly recorded. It’s also your reference number when you’re dealing with the Department for Work and Pensions and HM Revenue & Customs (HMRC).

Each NI Number is different and made of a mixture of letters and numbers.

If you’re entitled to a National Insurance number but don’t have one, you can apply for one by contacting  the National Insurance Registrations Helpline on 0300 200 3502. You’ll need one in certain circumstances, such as claiming benefits, applying for a student loan or when you’re employed. You can start work without one but you’ll need to apply straightaway. If you live in the UK you’ll normally receive one automatically at age 16.

[divider]

Who uses my National Insurance number?

You will have to give your National Insurance number to:

• HM Revenue & Customs
• your employer
• Department for Work and Pensions (which includes Jobcentre Plus and Pension, Disability and Carers Service), if you claim state benefits
• your local council, if you claim Housing Benefit
• the Student Loans Company, if you apply for a student loan

[divider]

 How much National Insurance do I pay?

You pay National Insurance contributions if you’re

• an employee or self-employed and
• you’re aged 16 and over, as long as your earnings are more than a certain amount

The amount and type of National Insurance contributions you pay depend on whether you’re employed or self-employed and how much you earn. The rates shown below are for the 2014-15 tax year.

•  if you earn more than £153 a week and up to £805 a week, you pay 12% of the amount you earn between £153 and £805
• if you earn more than £805 a week, you also pay 2% of all your earnings over £805

[divider]

What is Income Tax?

If you have to pay National Insurance you normally have to pay Income Tax too. Income Tax is a tax on your ‘taxable income’ over a certain amount. It’s payable at different rates depending on your income. There are some allowances and reliefs available that can lower your Income Tax bill.

A tax year begins on 6 April one year and finishes on the 5 April the following year. In each tax year you can receive a certain amount of income free from tax. This amount is called the Personal Allowance. In the tax year 2014-15 the Personal Allowance is £10,000.

The allowance will show on your payslip as a code – known as your tax code. Your employer will use your tax code to deduct the right amount of tax from your pay.

Your tax code is made up of the total of your allowances without the last figure, and followed by a letter.

For example if your only tax allowance in the tax year 2014-2015 is only your Personal Allowance, your tax code will be calculated as follows:

• Personal Allowance for 2014-2015 is £10,000
• without the last figure (0) this becomes 1000
• the letter HMRC use for people with just the basic Personal Allowance is L
• your tax code will therefore be 1000L

The money you pay through Income Tax typically goes towards the running of the country – on roads, railways and education, as well as the NHS, Police and Defence.

For 2014-2015, the tax rate is 20% on earnings above the threshold, up to £31, 865.

[divider]

This is my first job…what do I do about tax?

Usually, in your first job after leaving school, your employer will ask you to complete a Starter Checklist or ask you relevant information before your first pay day to tell HM Revenue & Customs about you. This allows the employer to work out your tax code and the amount of tax they should deduct. If you pay tax, it will be taken directly from your wages. This is called Pay As You Earn (PAYE)

The Starter Checklist and tax code are important, so make sure you provide correct information – if you’ve got the wrong code, you could pay the wrong amount of tax.

Normally under the PAYE system the Personal Allowance is divided by the total number of pay days you will have in the tax year. So:

• if you are paid monthly, the allowance is divided by 12 (£10,000 divided by 12 months = £833 a month)
• if you are paid weekly, the allowance is divided by 52 (£10,000 divided by 52 weeks = £192 a week)

So, if you are paid monthly your employer will not deduct tax from the first £833 you earn each month. If you are paid weekly your employer will not deduct tax from the first £192 you earn each week.

What if you work for more than one employer?

If you work for more than one employer, you’ll get a special tax code, and your allowances will be given to the pay from your main job. Your other job will be taxed at a different rate, often higher than your normal rate.