Living wages are paid

Calculating National Insurance Contributions (NIC) for Irregular Casual Day Workers:


There are special rules for NIC that apply only to casual employees

  • Who are not members of the farmer’s family.
  • Who are taken on for harvest work.

The normal NIC procedures apply to any part time or casual employee who is

  • Taken on for non-harvest work, or
  • Is a member of the farmer’s family, regardless of the type of work they do.

There are different treatments for agricultural casual and harvest workers.

'Irregular Casuals'

A special arrangement was introduced for NICs in the last NFU arrangements (see the PAYE Manual for the text). It was introduced to assist farmers where the nature of certain harvest work made it virtually impossible to keep the records necessary to properly establish liability and collect NICs. The workers are identified as 'irregular casuals'.


'Irregular casuals' are workers taken on who work in large gangs

  • Specifically to harvest a particular crop, and

  • Are able to come and go as they please, and

  • Will be paid according to the amount of produce they pick - piecework.

  • Provided that all of the above criteria are satisfied NIC will not be due.

Harvest workers taken on for more than two weeks.

No special rules apply and normal procedures for NICs must be followed.

Harvest workers taken on for less than two weeks.

NIC is due when earnings reach or exceed the Earnings Threshold (ET).

If the worker is a daily paid casual and works several days in a week the payments should be aggregated for NIC purposes.
NIC should be accounted for on the first day that payments reach or exceed the weekly ET. Where further payments are made in the same week the extra NIC due should be accounted for each time a payment is made.

The ECH guide and EP manual provide guidance on an existing NICs concession in respect of irregular harvest casuals. The concession applies to certain casual workers engaged in harvesting outdoor crops and sets out a number of conditions. Where all of the conditions are satisfied, the farmer is relieved of responsibility for operating the NI scheme in respect of his irregular harvest casuals. The concession does not apply to any other agricultural workers, including those casuals who are employed on a regular basis.

Where the conditions of the concession are not satisfied, a farmer must deduct NICs from the earnings he pays to his irregular harvest casuals in accordance with those statutory rules dealing with liability for Class 1 NICs. To decide the extent of the liability it is necessary to establish the correct earnings period to be applied. The following explains how the earnings period is determined for those accepted as irregular harvest casuals.

NIM08004 explains that where earnings are paid at regular intervals the earnings period prescribed by regulation 3 SS(C)R 2001 reflects the length of the period between which the payments of earnings are made. A person who receives their earnings every Friday, for example, is prescribed a weekly earnings period. NIM08004 also explains that an earnings period prescribed under regulation 3 cannot be less than a week.

This means that where a person is paid at the end of each day for each day’s work a regular payment pattern can be established and the earnings period is prescribed under regulation 3 as one week. To determine whether Class 1 NICs are payable in that week and, if so, the amount; all earnings paid in that week must be aggregated and NICs calculated on the total earnings figure. This applies for however long that pattern of payment is maintained, no matter how long the employment lasts.

NIM08100 explains that where earnings are paid otherwise than at regular intervals, and the earnings cannot be treated as being paid at regular intervals, the earnings period is prescribed under regulation 4 SS(C)R 2001. The general rule within regulation 4 is that the earnings period is the length of the period of that part of the employment for which earnings are paid or a week, whichever is the longer.


Regulation 4 is the regulation applicable for determining the earnings period of irregular harvest casuals. This is because workers engaged in harvesting crops are normally:

  • Employed under a verbal contract of employment for one day’s work only

  • Paid off at the end of the employment (the day’s engagement) either by reference to an hourly rate or rate per unit of picking

  • Not offered work on the following day but, if work is available, may be re-engaged the next day or later in the same week

  • Free to come and go as they please and to work on various farms for different farmers at any time.

  • Subject to the prevailing weather conditions

Since the same farmer, or different farmers, can employ these workers on successive days, alternate days or sporadically over several weeks, it often proves impossible to identify a regular pattern of earnings for these workers.

 

Examples

A worker may work on a Monday and Tuesday at one farm, find no work on Wednesday because of bad weather, work on a different farm on Thursday and Friday and return to the original farm on the Saturday. The pattern of employment for the following week is likely to differ again.

A worker is offered work on Monday and at the end of that day is paid-off. The worker is aware that the farm has further crops that will need to be harvested and turns up on the Tuesday to ask if further work is available. The farmer does have further crops to harvest and re-engages the worker under the same terms and again pays him off at the end of Tuesday. This pattern could continue for several days or weeks, subject to the weather conditions and the available work.
Since no regular pattern of earnings can be established and the payments cover periods of employment lasting less than a week, the earnings period applied to each payment is one week.

 

Where an irregular harvest casual receives more than one payment of earnings in respect of separate, irregular engagements with the same employer in the same week, NICs are calculated separately on each payment of earnings.


It is important to remember that an irregular earnings period is only appropriate to those workers defined as ‘irregular casuals’ within the NICs concession; that is, those workers who:

  • Are engaged on an irregular basis.

  • Are engaged in outdoor work to pick perishable crops.

  • Are not offered and cannot anticipate work for any longer than the engagement offered.

  • An irregular earnings period will not apply to regular casuals who are normally employed to undertake specific tasks at various times during the year, including harvesting. This includes regular casuals who are engaged on a regular basis even though they may be paid on a daily basis.


Whether the basis of employment can be regarded as irregular will be a matter of fact and should be determined on a case by case basis.