Thursday, October 24 14:05:14
While most staff are looking forward to the long weekend, most managers and payroll clerks of SMEs dread the thought of it.
Under the Irish Working Time Directive, employers are legally obligated to calculate the public holiday entitlement of each staff member. This entitlement adds a significant overhead to performing payroll throughout the year.
According to Elephant Smart Business, a new software product aimed at SME's which acts as a 'live' 24/7 staff manager, public holiday entitlement calculations add an average of 4.83 minutes per staff member to time spent compiling payroll.
The result is 15 hours per annum being lost in public holiday administration for a company with staff of 20.
The Co. Longford based firm which recently won the title of 'Most Innovative Product' at the Longford County Enterprise Board Awards, has surveyed more than 200 SMEs in the past 8 weeks. It found that 41pc of 209 companies surveyed, pay public holiday entitlements to all staff members whether they are eligible for the entitlement or not.
"Managers just don't have the time to follow the complex calculations. They'd rather pay over the odds to save time and avoid fines from NERA (The National Employment Rights Authority)," said Linda O' Reilly, Chief Financial Officer of Elephant Smart Business. "Public holiday entitlements are a big cost to all SMEs and need to be calculated correctly. Our research has shown us that almost half of Irish businesses would rather incur unnecessary wage costs to protect their business from a NERA fine or an employee claim with regards to public holidays. NERA conducted 2,755 inspections last year including requests for wage calculations and as it does not fine for over-payment, s businesses often over-pay, seeing this as dodging a big fine and reducing administration time. We estimate SMEs pay out E840,000 per annum to employees where no such payment is due."