order to reach two-thirds of median earnings by 2024. The LPC will need to monitor the labour market closely and the impacts of the NLW, in order to advise on any associated risks, so that the government can review its target or its timeframe, or both. This will ensure that the lowest paid workers continue to receive the pay rises they deserve without it having a detrimental effect on their employment prospects. The government notes that the LPC will continue to commission minimum wage policy evaluations from expert researchers, and the government asks that it sets out its evidence strategy for ongoing monitoring and evaluation of the impact of the NLW increase towards the two-thirds median target. The government has also asked that the LPC monitors and evaluates all the other NMW brackets, e.g. the rates for under 18s, for those aged 18-20, for individuals aged between 21 and 22, and finally, the apprentice rate, and to advise on the rates that should be paid to these groups from April 2021. The government asks that the rates are set as high as possible, without having negative effects on the employment prospects of each group. The LPC has also been tasked with recommending the accommodation offset rate applicable from April 2021, and in doing so, the government has stated that it should consider the state of the economy, employment levels and relevant policy change. Within the document, there is confirmation that the LPC intends to review whether or not the apprentice rate remains fit for purpose, as the government wants to ensure that the rate protects people from exploitation, but without damaging the apprenticeship opportunities available.
In response to the announcement by Chancellor, Rishi Sunak, that the LPC would be asked to make recommendations on the future of the NLW, the Chair of the LPC, Bryan Sanderson, said:
“We welcome the confirmation of our 2020 remit in today’s Budget. The target for the National Living Wage to reach two-thirds of median earnings by 2024 is an ambitious one. We will need to listen closely to what employers and workers are telling us, and to very carefully assess the economic evidence in making our recommendations. The current concerns around the coronavirus only reinforce the importance of taking economic conditions into account.
We will be launching our written consultation in the coming days, to start the process of making recommendations on the 2021 minimum wage rates.”
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BEIS issues a bulletin relating to COVID-19 and National Minimum / National Living Wage 24 March 2020
The Department for Business, Energy and Industrial Strategy (BEIS) has issued a bulletin addressing the issue of coronavirus in relation to the National Minimum Wage (NMW) and the National Living Wage (NLW).
The bulletin confirms that, despite current circumstances, employers still have a responsibility to pay at least the NMW / NLW to workers, and that workers cannot forfeit their entitlement to the NMW / NLW. During this period, HMRC will continue to respond to the complaints of workers, and to protect workers’ rights. HMRC aims to provide further education for employers and will still be asking employers to self-correct in appropriate circumstances. The government has received questions relating to situations where workers are temporarily not working or having to work reduced hours, but where the employer wishes to continue paying them. The advice is that, if this is related to coronavirus, businesses investigate whether the Coronavirus Job Retention Scheme is applicable.
For employers considering pay advances or employer loans for their workers, the guidance given is as follows:
• Pay advances – Workers can be paid an advance of pay at any time. These arrangements should be recorded correctly, e.g. on payslips or written agreements between parties, to ensure that workers are paid at least minimum wage rates for any time that they do work. Future deductions from employee pay to recover the previous advance of pay, if clearly recorded, will not reduce a worker’s pay for NMW / NLW purposes. Similarly, the advance or the loan does not count for NMW / NLW purposes in the period in which the money is paid to the worker. The worker still needs to be paid at NMW / NLW or above for the hours they have actually worked, even in pay periods in which they receive a loan or advance.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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