PAYROLL INSIGHT
The CIPP policy team arranged the roundtable, which was held on 12March at the impressive London office of Portfolio Payroll Ltd, to discuss with a select group a range of issues in light of developments NMW roundtable
Attendees ● Russell Clark , promoting compliance, HM Revenue & Customs (HMRC) ● Phil Conley , promoting compliance, HMRC ● Joseph Cooper , policy adviser and communications lead, Low Pay Commission (LPC) ● Samantha Mann MAAT MCIPPdip, senior policy and research officer, CIPP ● Jeni Morris , senior manager, NMW Team, Ernst & Young ● Mike Nicholas MCIPP, editor, Professional in Payroll, Pensions and Reward magazine ● Neil Tonks ChMCIPPdip , legislation manager, MHR ● Joseph Wilkinson, head of policy, LPC Apologies for absence received from several individuals. On behalf of the CIPP, Samantha Mann thanks the attendees for their attendance and input, and also Portfolio Payroll for kindly hosting the event. Background T hough the national minimum wage (NMW) legislation has been in force for almost twenty years, it might seem that only recently compliance and enforcement activity by HMRC has served to signal the extent of employers misunderstanding the law. It is clear that employers of all sizes are prone to compliance failures – whether inadvertent or otherwise – as evidenced by the publicity attached to various notorious cases.
discussions in the following areas: ● The role of education in compliance ● The impact of enforcement as a business concern ● Development of regulations – can they become a force for good? ● Is transparency for all achievable – worker and employer alike? ● Naming and shaming – a punishment or a business opportunity? Comments from attendees Please note that representatives from HMRC and the LPC participated fully and constructively in the discussions but were always mindful of confidentiality requirements particularly in regard to issues related to various publicised cases of NMW failures. Neil Tonks – Education has a vital role to play, and ought to come from government as they ‘own’ the rules which employers are expected to follow. The regulations are complex and HMRC actively look for unintentional breaches caused by lack of understanding of the complexities. Additionally, many employers have a simplistic view that compliance only involves ensuring all their pay rates are at or above minimum levels. The problem is delivering education in a way which reaches all employers. Larger companies will have payroll professionals who can be targeted but many smaller employers will not; and
reaching the many busy owners of small businesses will always be difficult. Most employers who are found non-compliant end-up paying a relatively small amount in penalties compared to their total pay bill. The concern is often more to do with the bad publicity which might follow being found non-compliant and consequently being labelled a bad employer by the government. What became clear in the roundtable is that conscientious employers, with professional advisers, nevertheless approach compliance audits expecting non-compliances to be found. Presumably this is because despite their efforts they’re not confident they and their advisers understand the rules well enough – which I think says a lot about the rules! If some of the regulations could be made less complex or more intuitive, this would be a good thing as it would help prevent employers being caught out. Removing anomalies, such as the rule which says salaried workers can only be paid weekly or monthly, would also be a good thing. Similarly, unfairness could be addressed. An example of this is the ban on salary sacrifice reducing pay below the minimum, which means low-paid workers miss out on National Insurance contributions savings which are available to the better-off, particularly where pension saving is concerned. The publicity which surrounds consultations and changes to regulations can also be a force for good, in that it raises the profile of the minimum wage and this might trigger employers to have a fresh look at their compliance. There’s certainly reputational damage from being named and shamed,
Neil Tonks ChMCIPPdip ,
legislation manager, MHR
Discussion areas Samantha Mann chaired and lead the
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| Professional in Payroll, Pensions and Reward | May 2019 | Issue 50
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