The Government recently announced that 191 companies failed to pay £2.1 million to over 34,000 workers, owed for minimum wages. Those companies were all named and shamed under the Naming Scheme. This scheme was previously paused in 2018 to evaluate its effectiveness, resuming in February 2020.
Continue readingCategory Archives: Wages
Can You Use the KickStart Scheme?
The Kickstart Scheme was announced in July 2020 and is aimed at creating new high-quality jobs to help 16-24-year-old unemployed people on Universal Credit. The aim is to provide opportunities for young people to enter the workplace, especially as many of those in this age bracket may have lost their jobs as a result of the 2020 coronavirus pandemic.
Continue readingWhat’s Changing in Employment Law?
Every year in April, a number of changes are made to Employment Law. As a manager or an employer, it is really important that you know about these changes and how they might affect your staff and your business. If you missed our recent workshop, where we talked through many of the changes, here is a summary of those that affect how much you pay your staff and when.
National Minimum Wage – from 1 April 2017 these have increased as follows:
- Workers aged 25 and over – £7.50
- Workers 21 to 24 – £7.05
- Workers 18 to 20 – £5.60
- School age to 18 – £4.05
- Apprentices under 19 or in their first year – £3.50
If you need to review your pay rates, you should identify eligible workers and check the new rates which are now applicable. Work out the gross pay received during the pay reference period, including bonuses and commission but not overtime or tips. Calculate the number of hours worked, excluding rest breaks and travel to work. You will then need to pay any arrears immediately and increase the worker’s pay to the minimum wage level or higher. Make sure that you keep records of changes in pay, as it your responsibility, as the employer, to prove payment. HMRC have the right to check at any time, to ask to see records and to order payment of arrears.
Statutory Redundancy Rates – the maximum week’s pay for the purposes of calculating a statutory redundancy payment increased to £489 on 6 April 2017. The maximum number of years of employment that can be taken into account is 20. From 6 April 2017, the maximum statutory redundancy payment that an employee will be able receive is £14,670.
Statutory Maternity Pay – from 2 April 2017, statutory maternity pay after the first six weeks of maternity leave increased to £140.98 (or 90% of average weekly earnings if this figure is less than the statutory rate.) The lower earnings limit also increases to £113 in April 2017.
Statutory Paternity Pay – Statutory paternity pay increased to £140.98 (or 90% of average weekly earnings if this figure is less than the statutory rate) on 2 April 2017. The lower earnings limit also increased to £113 in April 2017. Paternity pay is available to a person of either sex in an adoption situation, and to the spouse, civil partner or partner of either sex of the biological mother of a child.
Shared Parental Leave – Statutory shared parental pay increased to £140.98 (or 90% of average weekly earnings if this figure is less than the statutory rate), on 2 April 2017. The lower earnings limit also increased to £113 in April 2017. The shared parental leave and pay depends on the amount of maternity leave and pay that the mother takes, and the amount of shared parental leave and pay that the other parent takes. Shared parental leave and pay is also available in an adoption situation. Each parent claims shared parental leave and pay from his or her own employer. Parents must satisfy individual eligibility requirements and joint eligibility requirements.
Statutory Sick Pay – the rate of statutory sick pay increased to £89.35 a week on 6 April 2017. The lower earnings limit also increased to £113 in April 2017. If the employee’s average earnings before deductions, such as tax and national insurance, are equal to or more than the lower earnings limit (currently £112), they will be entitled to £88.45 a week. Although the rate of statutory sick pay normally increases on 6 April, the rate did not rise on 6 April 2016. This rate has therefore applied since 6 April 2015.
Gender Pay Gap Reporting – from 6 April 2017, companies and employers in the private and voluntary sectors with 250 or more employees are required to publish gender pay gaps. These must be published annually on the organisation’s website and uploaded to a Government-sponsored website.
Apprentice Levy – on 6 April 2017, this levy was introduced, to be paid via PAYE. The levy will be 0.5% of an employer’s pay bill, although employers will receive an allowance of £15,000 to offset against payments. It applies to employers with a pay bill over £3 million. The Digital Apprenticeship Service will distribute funds raised by the levy. The levy is being used to fund the cost of apprenticeship training and assessment through co-investment, up to 90% of agreed price. Employers with 50 or fewer employees can receive 100% of the cost if they take on apprentices aged 16-18 (or 19-24 who have previously been in care, in local authority education or on a health and care plan.)
A number of other changes are being made to Employment Law this spring, which we’ll cover in some of our blog posts, which you can read here. If there are any issues that you would like to know more about, please contact us for a confidential chat. Call us on 0118 940 3032 or email sueferguson@optionshr.co.uk.
How Can You Improve Employee Performance for Free?
Employee performance is something that I am asked about on a regular basis. How do you manage it? What’s the best way to improve it? To help answer these questions and any specific ones that you have, I am running a free webinar at 11am on Wednesday 31 May 2017. It will last for around one hour, to give you plenty of time to ask any questions that you have. Book your place online now so that you don’t miss out. Click here to reserve your place.
Staff Accuse B&Q of Using the National Living Wage as an ‘Excuse’ to Cut Pay and Benefits
Employers are being warned to avoid kneejerk moves when introducing measures to offset increased wage costs.
A petition drafted by a B&Q manager, accusing the DIY retailer of slashing employee benefits in an effort to offset the costs of the national living wage (NLW), has so far attracted more than 120,000 signatures. As an employer you could face a similar negative reaction if you attempt to alter terms and conditions as a result of the law to increase salaries for your lowest paid staff. The £7.20 an hour wage came into force on Friday 1 April.
As part of the change, the B&Q employees say that the retailer has suggested time-and-a-half pay for working Sundays and double time for working bank holidays; a restructuring of allowances for employees working in parts of the UK where the cost of living is higher; and the removal of a summer and winter bonus, which equates to 6% of annual salary.
The petition says that B&Q staff are required to accept the new terms and conditions of employment, or face losing their job.
“Big businesses like B&Q are using the NLW as an excuse to cut overall pay and rewards for the people who need it the most,” the petition reads.
B&Q denies that the changes to terms and conditions are as a result of the NLW, stating that a review of its pay and reward framework was launched “long before” the new wage was announced.
A B&Q spokesman said: “Our aim is to reward all of our people fairly so that employees who are doing the same job receive the same pay. That isn’t the case at the moment, as some have been benefitting from allowances for a long time when others have not, and that can’t continue.”
A survey from the Federation of Small Business found that 54% of SMEs believe they have been negatively impacted by the 50p an hour increase in pay, and will put off hiring new staff as a result. 41% will cut staff hours, while 26% plan to erode pay differentials by freezing or cutting the wages of higher paid staff.
According to analysis by the FT, employers are actively are actively considering increasing the number of self-employed individuals or apprentices – all of whom are exempt from the NLW – in their staffing mix.
But Esther Smith, employment partner at UK law firm TLT, warned that this could leave employers open to discrimination claims.
“Employers may, consciously or unconsciously, look to employ younger people to avoid the higher wage costs. Also, if they operate zero hours’ contracts, they may elect to offer less work to those people over 25,” she said. “Both of these actions would expose the employer to age discrimination claims.”
Before you make any major decisions which could affect your business and your employees, get in touch by contacting us on 0118 940 3032 or emailing sueferguson@optionshr.co.uk.