Procurement Advice Specific to Service
- Payroll and Employee Administration

In summary, when making purchasing decisions on payroll and personnel administration services to be provided to your school, you will need to ensure that your chosen provider is able to meet the requirements listed below as a minimum. The service offered will need to demonstrate this in the contract terms and via procedure documentation. It is the schools responsibility to satisfy themselves that this is the case.

Payment of Salaries

• Pay all staff employed by the school according to their relevant terms and conditions (either local or national). Failure to do so could leave the school open to a claim via employment tribunal;
   

• The provider must be able to reflect changes to these terms and conditions, and should liaise with the council in the case of local arrangements as necessary;
   

• Payment should follow council set payroll dates. Deadlines for receipt of information from the schools should facilitate this, as should staffing levels;
   

• Arrange for deductions as necessary for both statutory and Council deductions, and payment to relevant bodies within the set timescales.

Contracts of Employment

This is included in the service provided through Education Leeds EAS. The service includes the issue of new contracts; variation to existing contracts; maternity, paternity , adoption and parental leave. There is scope for this activity to be carried out as a Personnel function PROVIDING there is a clear link between the personnel and payroll functions.

Statutory Payment Requirements

• The provider must be able to comply with all statutory payroll requirements and relevant payroll legislation;
   

• All payments of income tax and national insurance must be made to the Inland Revenue by the required date. Provision of year-end returns to both the Revenue and the employee must also be made;
   

• The provider must be able to comply with all payroll requirements and relevant payroll legislation as they effect pensions requirements (see below). For the Teacher scheme this will require liaison with the Client Management section on how to remit contributions, AVCs and the annual service return. Liaison with the West Yorkshire Pension Fund will be necessary for the Local Government Scheme;
   

• Compliance with requests for information from other statutory bodies, such as the Contributions Agency must also be met. This may also include requests for payroll deductions from those authorised bodies e.g. Court Orders.

It is vitally important that statutory obligations are met. Penalties for failure to adhere can be extremely high. Where mistakes and other service errors entailing financial consequences are made, your School will be financially responsible for any mistakes and omissions that may occur even if caused through your alternative payroll provider. It is for your School to ensure that arrangements are in place, as per the Specification for the Payroll Service, to recover the appropriate funds from your Contractor, along with any funds due in respect of penalties payable.

Pensions Administration Requirements

The provider should be able to meet Pensions requirements for both the Teacher’s and Local Government Schemes. There are two distinct responsibilities for pensions administration, the employer responsibility and the administering body responsibility. The administering body function (primarily record keeping, the calculation of pension payments and transfers of money between funds) is dealt with by the relevant scheme administrators and is not an issue for schools. The employer responsibility, which does apply to schools, is primarily about giving correct personal and employment information to the pension administrators and ensuring pension contributions are appropriately deducted and paid into the pension fund.

The following summarises the main requirements but is not exhaustive. Further details are available from the West Yorkshire Pension Fund (for the Local Government Scheme) and Teachers Pensions (for Teachers Pensions). Detailed procedures and forms are available for providers undertaking this work.

Due to the impact on pension contribution taken from salary, employers tend to link most of these functions with payroll provision though there are two exceptions to this (noted below). However, should the school wish, there is scope for much of the activity to be carried out as an HR function PROVIDING there is a clear link between HR and payroll regarding pay and contribution deductions.

The main pensions tasks are:

• Include pensions information in letters of appointment and contracts of employment and ensure scheme literature is distributed to new starters. This is normally an HR process;
   

• Inform pensions administrators of new starters and relevant changes to employee and employment details, forward forms completed by employees and ensure that appropriate pensions contributions are deducted from salary;
   

• Where employees opt out of a pension scheme, inform pensions administrators and make appropriate refunds and adjustments to contributions, national insurance and income tax;
   

• Issue Certificates of Protection of Pension Benefits and inform pensions administrators;
   

• Provide the opportunity for employees who are absent from duty for various reasons to continue to pay pensions contributions and make payroll arrangements to allow this to happen, and inform pensions administrators of decisions;
   

• Inform pensions administrators of a leaver or a death in service with appropriate payroll information, including pensionable pay calculations, and ensure that suitable payroll arrangements are made to finalise contribution collection and that leavers are issued with appropriate forms;
   

• Provide appropriate information to employees and pension administrators regarding ill health retirements (including for past employees), redundancy, PRIEAFF and other non-age related retirements. This is normally an HR function;
   

• Collect employer and employee pension contributions and AVC contributions, pay over to the appropriate pension fund and provide required information to pensions administrators on what has been collected from whom;
   

• Make payroll arrangements for the collection of added years, arrears and other payments as required; · Arrange the despatch to employees of ad-hoc Pensions communications, e.g. annual benefit statements, newsletters. This is normally done with payslips;
   

• Implement changes as required as a result of amendments to the Local Government Pension Scheme Regulations;
  
  Liaise with the Teachers Pensions Agency, Council’s Pensions Section (for Local Government Pensions Scheme) and Client Management Payroll section (on how to remit teachers contributions, AVCs and the annual service return) as necessary.

Security

• Prevent fraud via sufficient checks on input material to ensure authorised by relevant school officers;
   

• Access to confidential data only by authorised employees of the provider;
   

• Retention of archive data in secure conditions. Information should be transferred to a new provider at the end of the agreement if the school so decides;
   

• Allow access to information to Council auditors in the course of their work; · Provide adequate professional indemnity insurance cover;
   

• The provider must be able to demonstrate that school funds will be handled by only certain named individuals, and that suitable separation of duties exist in the handling of these monies.

Escalation Procedures

• The provider should indicate necessary escalation procedures within the organisation in the event of disputes or complaints;
   

• The contract should detail termination rights for both parties in the event of a breakdown in service;
   

• The school should include a requirement for financial compensation in the event of errors by the payroll contractor.

Advice, Support and information

Provision of advice and support on payroll matters as required, including, but not limited to:

• Advice to employees on net pay calculation and other tax matters;
   

• Advice to the school on payroll matters, including queries on payroll implications of terms and conditions, and possible changes to them;
   

• Provision of sufficient information to the school to enable them to check all payments to staff, and manage their staffing budgets;
   

• Provision of information to the Client Management Section to allow completion of statutory statistical returns.