FCA sets out its views on ESAS SINCE IT began raising public awareness of the need for increased availability of alternatives to high cost credit, the Financial Conduct Authority (FCA) has had increased contact with firms whose propositions are related to their provision. In July, the FCA issued a statement (https://bit.ly/2PYFvV3) explaining its views of the risks and benefits of employer salary advance schemes (ESAS). The statement notes that as ESAS are commonly promoted as an alternative to high cost credit and have a broadly similar economic effect, most of these schemes do not fall under the FCA’s regulation as they do not meet the definition of credit under legislation. However, given the similarities with some credit products the FCA thought it helpful to set out its views to help employers, employees and scheme providers to make informed decisions. The statement covers the followings aspects: ● What ESAS offer ● What employees need to consider ● What employers need to consider ● How ESAS typically work ● The risks for employees and employers ● How employers and scheme operators can mitigate some of these risks. The FCA notes that ESAS schemes are a recent development,
usually administered by specialist scheme operators who promote the scheme to a variety of both public and private sector employers, allowing employees to access, usually for a fee, some of their salary before their regular payday. Though the FCA does not usually regulate ESAS because an early advance of salary provided by an employer does not involve the provision of credit, ESAS can raise similar issues. When used in the right way, such schemes can help employees as they can be a convenient way to deal with unforeseen expenses and occasional short-term cash flow. They are often promoted as a cheaper alternative to high-cost credit such as payday loans. In its advice to employers, the FCA says they should consider all aspects of the scheme, both the advantages and the potential risks, when offering an ESAS. This includes matters such as the build-up of charges where the product is used repeatedly where employees might become dependent on the scheme, and the limitations of ESAS such as the short-term nature of the relief. Although ESAS will usually operate outside of credit regulation, there are a variety of ways the schemes could be structured. Employers should give careful consideration as to whether the ESAS being provided to employees involve the carrying out of regulated activities and, if necessary, seek professional advice.
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NATIONAL AUSTRALIABANKAPPOINTS COLETTE TIERNEY COLETTE TIERNEY MSc FCIPP has been appointed as payroll project manager for National Australia Bank’s (NAB’s) London office on a consultancy basis. She joins NAB at a pivotal stage, where implementing a global outsourced system for payroll is high on the organisation’s strategy agenda. Her remit is to focus on transformational initiatives, performing due diligence and exploring opportunities to produce streamlined and
efficient operations. These are exciting times for NAB, with a huge appetite for change within the current leadership team who have a focus on future- proofing NAB’s payroll. The whole human resources team are harnessing their efforts, with a shared goal of bringing about transformational operational improvements.
MBKBHAS APPOINTEDROSE HOWLEYANDHELENHARGREAVES
MBKB LIMITED, a leading provider of payroll apprenticeships, has appointed Rose Howley and Helen Hargreaves MSc ChFCIPPdip. Rose’s role as payroll business development manager for MBKB Training is to assist with the development of services, support and training, ensuring that all sessions are delivered in an interesting professional manner, which engages the attendee and gives them an enjoyable experience. Commenting on the exciting, challenging and rewarding role, Rose said “I am Iooking forward to working within the team to meet the goals and objectives of MBKB and the payroll sector. “MBKB is a rapidly expanding organisation, developing this and the next generation of payrollers, to put our sector firmly on the map.” Helen has been appointed as the head of payroll policy role at
MBKB Business Consultancy & Training to ensure currency and validity of knowledge and information, and going the extra mile for the payroll sector. MBKB is always there to offer support and guidance to their clients, apprentices and managers. Helen commented that she is “delighted to take on this role and help guide and shape the future of payroll. “My policy team will be there to ensure our apprentices, their employers, and of course their
payroll teams, keep up to date with events in payroll during, and after, their learning has been completed. And naturally, all delivered in the unique MBKB style.”
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| Professional in Payroll, Pensions and Reward |
Issue 63 | September 2020
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