GLA wins "Pay Day by Pay Day Scheme" case

3 December 2012

GLA (the Gangmasters Licensing Authority), who's aim is to protect workers from exploitation, has won an appeal raised by FS Commercial Limited ("FSC") after the GLA had previously refused FSC a license.

GLA refused a license because the "Pay day by Pay Day Scheme" would have resulted in underpayments of TAX (PAYE) and National Insurance and after the deduction of FSC's fee would have resulted in some workers earning less than the National Minimum Wage.

A Pay day by Payday scheme is different to how mainstream umbrella companies work and under these schemes, employers apply income tax and National Insurance contributions relief to the amount of expenses that an employee has incurred, so that tax and NICs are applied to an employee's gross salary after these deductions. This relief is applied each pay day, hence the term.  
 

A full narrative on the case is available at: http://gla.defra.gov.uk/PageFiles/1373/FS%20Commercial.pdf