Reward insight
such third-party facility. Take, for example, the Wagestream system, which it is understood features two charges: £1 per worker for the employer and £1.75 per transaction, paid presumably by the employee, every time they draw funds. Employers need to be careful about this because section 15 of the Employment Rights Act 1996 contains specific protections against the employer receiving any payment from an employee for the benefit of the employer. Under sections 13 and 14 of this Act, employees must not suffer any cost in the process of obtaining their wages, nor can they suffer any deduction which has not been subject to their written authority. As these advances are effectively loans, the charge must very clearly and unambiguously be in relation to the obtaining of the credit and not for obtaining their wages, otherwise it could be seen to be a charge on their wages. It is also critically important to ensure the appropriate authority to make the deduction. Payroll professionals know that they need to obtain both a receipt for the advance and a clear and unambiguous
authority to deduct the advance from the next wages payment due. Problems can arise where third parties put the authority for deduction from wages in their own documentation. Getting the wording right is important. It is payroll that makes the deduction or adjustment, and therefore in the ‘firing line’ if any complaint of unlawful deduction is made. Accordingly, payroll must surely have the final say in the wording used by a third party. Summary This article is not designed to provide any definitive answers to this interesting and challenging development. It is for employers to determine whether they wish to change payroll frequency. whether they wish to change payroll frequency ...for employers to determine
If there is a financial wellbeing issue within the organisation is it best served by more frequent wages payment? It may not be the right answer in every case. A financial wellbeing issue is best served by an employer, in discussion with experts, examining the cause of an employee’s financial issues and to assist in implementing a solution that will actually work. Whether it would be right to completely change payment frequencies simply because people are demanding it, for no other reason than because they want it, is not necessarily a way forward. n
Employment status and modern employment practices
One day
This course explains how to assess employment status, the financial risk of getting it wrong, the right to work in the UK and a variety of modern employment practices. It covers recent developments such as the IR35 process changes (‘off-payroll working’) and possible future developments following various Government consultations.
This course covers: ● Optional remuneration arrangements ● Legislation and salary sacrifice case law ● Contractual implications ● Effective arrangements ● Payroll implications ● Salary sacrifice and noncash options
Book online at cipp.org.uk/training , email info@cipp.org.uk or call 0121 712 1000 for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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| Professional in Payroll, Pensions and Reward |
Issue 53 | September 2019
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