PART 1: DATES, DEFINITIONS AND OBLIGATIONS
Arrears From 6th April 2009 arrears (in respect of reference periods thereafter) are calculated at current NMW rates where these are higher than during the period the arrears arose (reference Employment Act 2008). Enforcement With effect from 26th May 2015 new penalties accrue where an employer fails to pay the NMW, alongside the new inspection powers available to HMRC since 6th April 2009. HMRC can remove records from an employer’s premises for photocopying and will commence a criminal investigation which may result in serious penalties for employers who deliberately fail to pay the NMW. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS From 1st April 2016, where an underpayment is found, a ‘notice of underpayment’ will automatically be issued plus a penalty fee of 200% (was 100%) of the underpayment per worker, subject to a minimum of £100 and maximum of £20,000 per worker. Under amendments to NMW regulations during 2003 a retrospective notice can be served on an employer to make good underpayments of NMW for ex-employees. Output (Piece) Workers From 1st October 2004 provisions under the regulations relating to output workers, those paid for the piece produced or task performed and not for the time that they work (previously piece workers), and former ‘fair estimate’ agreements were replaced by a system entitled ‘rated output work’. An employer must give workers notice specifying the ‘mean hourly output rate’; being the number of hours output work spent in performing subject tasks during a pay reference period. In order to determine the mean rate, the employer must either: • conduct a satisfactory test to determine the speed at which every worker produces either a ‘subject piece’ or ‘task of output’, or fraction thereof, to determine the average, or mean, speed achieved by all workers producing the piece of work, or • make a satisfactory estimate of the average speed of performing the piece or task. From 6th April 2005 all workers must be tested in similar working circumstances to those in which actual work will be performed. The number of hours taken by a worker in producing pieces, or performing tasks, during a pay reference period is to be treated as being 120% of the number of hours that a worker working at the mean hourly rate output would have taken to produce or perform the same number of the same type of pieces or tasks. No printing, copying or reproduction permitted. The Living Wage Foundation, the body responsible for determining and advising on national wage limits has increased the Real Living Wage for London to £10.85 an hour. NEW DEAL SCHEME/THE WORK PROGRAMME A scheme piloted in April 1997, extended nationwide in April 1998 and funded by the Department for Work and Pensions. In October 2009 a new scheme: ’Flexible new Deal’ was launched to replace New Deal which in turn was replaced by The Work Programme in 2011. The scheme provides an in-work subsidy payable to an eligible employee for up to the first 26 weeks of employment, or until such time as employment ceases if earlier. Under the Work programme
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