Transferring employees to a new company

There are a number of issues that should be considered before requesting that data be transferred or merged from one company to another.

You can then advise us how you want the transfer to take place.

Transferring employees to a new company

As a general rule, all employee's in the old company should be paid out their final pay entitlements, and they should start as new employees with the new company.

In fact, Section 27 of the Holidays Act 2003 requires an employer to pay out accrued holiday pay whenever an employment relationship ends.

Under certain circumstances the employee can agree to have leave transferred to the new employer, requiring what we term a "Section 69(B) Restructure" after the clause in the Employment Protection Act.

SmoothPay provides the following options for moving staff or merging companies.

1) Total data merge - this is relatively complex, as it requires combining all unique allowance, deduction etc payroll codes, as well as all the historical data from both companies and can result in a relatively untidy result (multiple codes for the same thing etc). The tax reports will contain the combined data (which isn't usually correct, as the tax data would have been reported by the separate employers under their tax number).

This option is generally used when separate branches for the same company have been processed separately for some reason, and you now wish to merge them together into a single payroll database.

This option should not be selected if the employer ird numbers are different.


2) Merge as new employees - this brings on the employee information with a new start date and default leave settings. Employees will not have any history or standard pay information.

This option is generally used where staff have been terminated and paid out their final pays in the old company and you wish to start them as fresh employees in the new employer's payroll.


3) Section 69(b) Restructure - this option lets you keep employee leave balances and summarises their pay history as "take on" pay values for the purposes of maintaining Holidays Act compliance for calculating Average Weekly Earnings and Relevant Daily Pay (the take-on pay entries do not appear on tax reports, so only the pay runs processed in the new company appear on ir schedules).


Please call when you're ready to prepare your new company and we'll assist with transferring your employee information.

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