Salary Sacrifice against National Living Wage compliance 25 January 2016
According to some research from Jelf Employee Benefits, less than one in 10 of employer respondents have reviewed their use of salary sacrifice against the new national living wage requirements.
The survey of 180 employers also found that 39% of respondents are unaware that salary sacrifice arrangements could result in employers inadvertently breaching the new minimum wage requirements.
The research also found: 19% of respondents are aware of the possible implications of using salary sacrifice, but have yet to review this to ensure compliance. 16% of respondents support the idea of the voluntary living wage of £8.25 an hour and £9.40 an hour in London, and have already signed up to it. Steve Herbert, head of benefits strategy at Jelf Employee Benefits, said: “…some employees have a number of sacrifices in place for different benefits, and the cumulative impact of this may unexpectedly place employees close to the new legal minimum income of £7.20 an hour for the over 25s. With time now of the essence, we would urge employers to act now or risk breaching the new rules.”
Read the full article from Employee Benefits .
Businesses are being advised to prepare early for the changes on 1 April 2016, when the new wage will become law, and make sure they follow these 4 simple steps:
know the correct rate of pay - £7.20 per hour for staff aged 25 and over find out which staff are eligible for the new rate update the company payroll in time for 1 April 2016 communicate the changes to staff as soon as possible.
Employers can find out more by visiting www.livingwage.gov.uk .
National Minimum Wage information for employers 26 January 2016
A factsheet has been published on GOV.UK which explains about the checks HMRC carry out to make sure that employers are paying workers at least the national minimum wage.
National Minimum Wage information for employers
Further information on the National Minimum Wage is available at www.gov.uk/national-minimum-wage
The National Minimum Wage (Amendment) Regulations 2016 28 January 2016
The National Minimum Wage (Amendment) Regulations 2016 have been approved and bring into force the National Living Wage of £7.20 for those aged 25 and over, and the increase in the calculation of penalties on those who do not comply with the regulations. Employers who fail to pay staff at least the minimum wage they are legally entitled to will have to pay double what they do now. The calculation of penalties on those who do not comply will rise from 100% of arrears to 200%. This will be halved if employers pay within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged.
The National Minimum Wage (Amendment) Regulations 2016 come into force on 1 April 2016.
CIPP Policy News Journal
25/04/2016, Page 249 of 453
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