MEMBERSHIP INSIGHT
On your behalf
Policy team update
Diana BruceMCIPPdip, CIPP senior policy liaison officer, discusses responses to recent consultations
NMW consultation In the April issue we said we’d provide a summary of the responses we received to our survey about the consultation on national minimum wage (NMW) – salaried workers and salary sacrifice, because at the time it was still running. People who perform salaried hours work are paid an annual salary in equal weekly or monthly instalments, for an annual number of hours. The legislation provides a set of rules about compliance when regular salaries are paid. Certain conditions must be met in order for work to qualify as salaried hours work under the NMW regulations. The consultation sought views on how effective these rules are in preventing worker exploitation. The consultation also asked for views on proposed changes to the regulations which relate specifically to salaried hours work, and whether they might be amended to include additional payment cycles and fixing the definition of the calculation year for employers, without any detriment to workers. We received 177 responses to the survey. We thank all those who took the time and effort to contribute. Payroll professionals together with their software developers play an instrumental role in ensuring good levels of employer compliance with the regulations and are the first to recognise the importance of well-written legislation that represents
modern working practices. It is the sharing of your valuable knowledge and experience that gives credence to our consultation response. What did you tell us? ● ● All regular payment cycles should be allowed within the definition of salaried hours work to bring the operation of NMW in line with other pay calculations (e.g. pay as you earn income tax, class 1 National Insurance contributions, automatic enrolment). This would benefit: ❍ ❍ workers who could then benefit from equalised payments made throughout the year and not be subject to hardship caused by seasonal ‘peaks and troughs’ of demand in some sectors which affect availability of working hours ❍ ❍ employers whose compliance would increase. Many employers are unaware of the divergence between the operational rules for NMW and other pay/employment tax ❍ ❍ government in its work to modernise the work place and enable employers with salaried workers to fully engage with flexible working in all its variations. ● ● Overtime, pay premia and allowances should be more widely included as acceptable payments for NMW and thus should be allowed within annual salary calculations. ● ● The calculation year should be set at the employer’s discretion. ● ● Salary sacrifice should be allowed for all
employees where they have free choice to enter in to such agreements. We recognise that this poses further questions as to whether to broaden the range of benefits in kind (BIKs) that can be included within minimum wage calculations. ● ● Comprehensive and consistent guidance aids employer compliance. A failure by the employer to comply is also a failure of state to provide. Greater use should be made of case studies to demonstrate compliant and non-compliant employer behaviour. There are other restrictions within the NMW regulations that are not fit for purpose and further consultation needs to explore these fully. The following list is illustrative but not exhaustive: TOIL (time off in lieu); living accommodation rules – particularly the exclusion list for socially aware landlords; voluntary deductions. Our consultation response suggests improvements to the regulations to help the majority of those striving to be good employers by providing fair and decent work and working conditions that comply with legislation and which fit within modern pay operations and practices of the 21st century. We hope that this consultation marks the beginning of an ongoing conversation as to how the regulations can be updated to achieve this essential aspiration. The CIPP’s formal response to the consultation is available to view in full on www.cipp.org.uk under My CIPP/Policy hub. Redundancy protection In the April issue OYB we mentioned a survey running on the proposal to extend redundancy protection for women and
...beginning of an ongoing conversation as to how the regulations can be updated...
4
| Professional in Payroll, Pensions and Reward | May 2019 | Issue 50
Made with FlippingBook - Online magazine maker